Last week, we began the search for the twelfth Wales Fast Growth 50 list, the annual project which celebrates the best of Welsh entrepreneurship by identifying the fastest growing firms in Wales.However, by its very nature, the Fast Growth 50 project throws up an interesting conundrum for policymakers in Wales?
Currently the generalist approach adopted by the Welsh Assembly Government towards business support is one which focuses on quantity, not quality; one which tries to address the needs of the many and not the few.
Of course, some will argue that we shouldn’t put our efforts into those few companies that grow and it would be better to focus on all of the 200,000 businesses in Wales in terms of developing the economy.
That may seem logical but the simple fact of the matter is that the vast majority of businesses simply do not grow or, more importantly, want to grow. As a result, focusing only on the wider small business population may not result in greater employment growth at a time when the country needs more jobs to be created within the private sector.
In contrast, high-growth entrepreneurs are the real force behind job creation.
As detailed academic research studies have shown, they have been responsible for some 70 per cent of US employment growth in the early 1990s and a UK study found that 4 per cent of the new firms formed in a given year accounted for 50 per cent of all the jobs created a decade later.
More recently, the Global Entrepreneurship Monitor showed that 5 per cent of start-ups create 75 per cent of the jobs in any cohort of small firms.
The Welsh Fast Growth 50 project certainly seems to support this evidence. For example, last year’s 50 fastest growing firms in Wales created around 1900 new jobs, doubling their workforce over two years.
If we take this in context of the entire Welsh economy, government statistics show that number of people employed in the private sector in Wales increased by around 12,000 people in the period 2006-2008. Therefore, last year's Fast Growth 50 were responsible for around 15 per cent of all new private sector jobs in Wales during this two year period, a remarkable achievement that shows the importance of supporting these businesses during a recession.
This demonstrates the massive potential that exists within the Welsh economy, a trend that the Fast Growth 50 project has been observing every year since 1999. Given this, it beggars belief that Welsh policymakers have generally shown a lack of interest in utilising the Fast Growth 50 as a vehicle for encouraging growth within the economy over the last twelve years. That is a shame as these are all great companies that, with the right support, could grow to become world class players.
Whilst the overall turnover will probably decrease this year due to the worst recession since the 1920s, I still expect that this year's FG50 list in Wales will have grown by at least 50 per cent during the period 2007-2009. That would be an incredible achievement given the economic downturn suffered during the last two years and a real testament to the entrepreneurial talent and drive that exists within this nation’s businesses.
In contrast, high-growth entrepreneurs are the real force behind job creation.
As detailed academic research studies have shown, they have been responsible for some 70 per cent of US employment growth in the early 1990s and a UK study found that 4 per cent of the new firms formed in a given year accounted for 50 per cent of all the jobs created a decade later.
More recently, the Global Entrepreneurship Monitor showed that 5 per cent of start-ups create 75 per cent of the jobs in any cohort of small firms.
The Welsh Fast Growth 50 project certainly seems to support this evidence. For example, last year’s 50 fastest growing firms in Wales created around 1900 new jobs, doubling their workforce over two years.
If we take this in context of the entire Welsh economy, government statistics show that number of people employed in the private sector in Wales increased by around 12,000 people in the period 2006-2008. Therefore, last year's Fast Growth 50 were responsible for around 15 per cent of all new private sector jobs in Wales during this two year period, a remarkable achievement that shows the importance of supporting these businesses during a recession.
This demonstrates the massive potential that exists within the Welsh economy, a trend that the Fast Growth 50 project has been observing every year since 1999. Given this, it beggars belief that Welsh policymakers have generally shown a lack of interest in utilising the Fast Growth 50 as a vehicle for encouraging growth within the economy over the last twelve years. That is a shame as these are all great companies that, with the right support, could grow to become world class players.
Whilst the overall turnover will probably decrease this year due to the worst recession since the 1920s, I still expect that this year's FG50 list in Wales will have grown by at least 50 per cent during the period 2007-2009. That would be an incredible achievement given the economic downturn suffered during the last two years and a real testament to the entrepreneurial talent and drive that exists within this nation’s businesses.
