FAST GROWTH 50 2013

Tonight, we celebrate the fifteenth Wales Fast Growth 50 awards, a project that recognises the fastest growing Welsh firms every year.

Since its beginnings in 1999, it has become firmly established as the award that entrepreneurial businesses in Wales aspire to. The annual gala dinner – which is open only to the fifty fastest growing firms in Wales – has also developed into one of the largest Welsh business events of the year and, unlike any other award ceremony, is judged solely by the performance of businesses. However, the most important aspect of this project is the continuing impact that the firms featured have on Wales.

Since 1999, the 470 firms that have appeared on the fifteen lists have created over 25,000 jobs and generate an estimated £14 billion of additional turnover annually, much of which is spent in their local area. Yet despite this success, much remains to be done to turn fast growing firms into supergrowth companies that can have a major and continuing impact on the Welsh economy.

That is why the Wales Fast Growth 50 project is pleased to be working closely with both the Welsh and UK Government on the further development of such businesses.

For example, the Permanent Secretary of the Welsh Government has met on a number of occasions with representatives of firms from the Fast Growth 50 list to discuss their concerns regarding the Welsh economy and more, importantly, how they could be supported in their efforts to grow their businesses. I look forward to similar meetings this year to ensure that the views of Welsh entrepreneurs are placed at the heart of policymaking in Wales.

And following this year’s awards, a new Growth and Innovation Network pilot will be launched to support high-growth indigenous businesses to increase profits, turnover and employment. This will provide tailored packages of guidance, advice and support to selected SMEs that create a high number of jobs, including the Fast Growth 50 firms and the Welsh Government’s High Potential Start-up clients and innovation-led businesses.

I would also like to thank the Secretary of State for Wales for his continuing support for the Wales Fast Growth 50 during the last twelve months and the Welsh Office for discussions on how to link up the Fast Growth 50 firms into opportunities at a UK Government level.

However, since I came up with the idea of listing the fastest growing indigenous Welsh firms back in 1998, the most important relationship for the Wales Fast Growth 50 project has been with the Western Mail. Without the ever-present backing of Alan Edmunds, Sion Barry and the business team at the Western Mail, the Fast Growth 50 project would be unable to continue and I thank them for their continued support.

Finally, I am grateful to Santander Corporate and Commercial Banking for being the main sponsor for the gala dinner and Capital Law, Business in Focus, Cake Communications, Community Housing Cymru, Dialogue Marketing, Logicalis, Media Wales, Nominet, Sinclair Finance and Leasing and the University of South Wales for sponsoring the individual awards.

I am sure that, as usual, the atmosphere will be electric and it will be fantastic to see the Fast Growth 50 firms celebrating their achievements with their staff, customers, family and friends and helping to make the event a very special night for everyone at the event.
If we can continue to celebrate, support and develop such businesses over the next few years, then the future success and growth of the Welsh economy is assured.

GROWING PAINS - FOUNDER'S DISEASE AND FAST GROWTH FIRMS

At the end of April, the Minister for Business will launch the fifteenth Wales Fast Growth 50 competition at a special event in Cardiff.

Established in 1999 with Media Wales to identify the fastest growing companies in Wales, the project has become a benchmark for celebrating the entrepreneurs that create wealth and employment in the Welsh economy.

And as the Western Mail’s “Business in Wales” supplement demonstrated last week, the stories of entrepreneurial individuals leading Fast Growth 50 firms, such as Neville Wilshire of Save Britain Money and Jacquie Williams of SCS Aftercare, are inspirations to other to follow in their footsteps.

Despite the phenomenal success of such individuals in growing their business, the research that the Fast Growth 50 team has been undertaking over the last decade and a half into these companies unfortunately shows that they are the exceptions rather than the norm and many firms still face considerable challenges in achieving growth over the long term.

In particular, one of the major barriers to growth identified within many small firms is related directly to the founders of such businesses, especially the lack of strategic skills among the entrepreneurs and their resistance to change.

This is especially problematic when coupled with a reluctance to create a balanced management team and an organisational structure to support delegation of decisions.

This attitude amongst entrepreneurs, described by academics as ‘Founder's Disease’, results in new venture founders being unable or unwilling to adapt to the requirements of their business as it grows.

As a result, if they continue to lead the firm beyond the start-up phase without changing the way they manage, there will be a serious impact on the future performance of the business.

This is not surprising, as the skills required for start-up are not those required later as the company either consolidates or grows. Indeed, our studies have shown that a high degree of both management and strategic skills are required by the entrepreneur to undertake the successful growth of a small company, and if an entrepreneur who does not possess such skills continues to lead the venture beyond the start-up phase, then the performance of the company may begin to suffer.

One option is for the entrepreneur to learn a new set of skills to take the business forward although some entrepreneurs cannot or will not break old habits to learn new skills and, as result, the company’s growth will stall.

Alternatively, the entrepreneur needs to introduce new business techniques and to delegate to others within the business, although this is easier said than done as entrepreneurs hate to step aside even though they may be temperamentally unsuited to be managers.

Indeed, all too frequently, entrepreneurs are naturally reluctant to lose control of the business, wanting to do it all themselves rather than managing others, so the growth potential of the business is strictly limited by their personal energy and capacity.

One alternative for companies faced with this problem is to bring in one or more senior level executives with big company experience to supplement, support or even or replace the owner-founder with a professional team of managers.

This could be fraught with difficulties and such an action could result in the loss of the company's entrepreneurial orientation, the very thing that has got it to develop its ideas in the first place and become successful. The result is that such companies will become essentially ‘large small firms’ and stop growing.

Indeed, as one Fast Growth 50 owner manager told me, if such external executives simply try to impose a large firm mentality without considering the culture of the smaller business, then the situation can usually turn out to be worse than if the original entrepreneur has stayed at the helm.

Therefore, the challenge for the entrepreneur is to be able to move away from the operational and managerial roles within the company towards undertaking a more strategic approach that will take the business forward to the next stage of growth.

This involves delegating tasks to other employees as the business develops and, more critically, understanding that their role in strategically planning the future development of the business, rather than undertaking day to day tasks, is critical for its future growth.

Of course, there can be significant problems as the management needs of the business begin to outstrip the entrepreneurial skills of the founder. This may create a tension within the firm between the need for professional management and the need to maintain the entrepreneurial spirit of the successful organisation.

However, delegation by the entrepreneur as the firm develops and the development of a more team-oriented approach to managing the company can solve many of these issues and, more importantly enable the business to grow quickly, as demonstrated by many of our Fast Growth 50 firms during the last fifteen years.

FAST GROWTH 50 2012

Today, the 14th annual list of the fastest growing firms in Wales is launched.

At a time when the Welsh economy badly needs a boost, the firms featured in this year’s Fast Growth 50 supplement demonstrate, yet again, the entrepreneurial and innovative potential that exists within our business community.

And despite trading within an economy that has been struggling to grow since the recession, this year’s list shows a record increase in turnover, demonstrating that even within difficult economic times, Welsh business can be competitive in an increasingly turbulent global environment.

Thanks to their wealth and employment creating potential, such high impact firms are now becoming the focus of policymakers around the World. And whilst entrepreneurship remains a key goal for developing local economies, there is an appreciation that as many firms will never grow beyond providing a local service and therefore there needs to be an increasing focus on those businesses that have the potential to grow further and create jobs.

National and regional governments around the World are now realising that focusing on high growth businesses, or so-called ‘gazelles’, can give them more “bang for their bucks” in ensuring that public sector business support is targeted towards those that can create jobs in the economy.

In fact, we can see that the impact of a small group of high growth firms can be tremendous within a small economy such as Wales. Since 1999, 440 firms have appeared on the fourteen lists published in the Western Mail. These have created over 22,000 jobs and generate over £12 billion of additional turnover annually into the Welsh economy, much of which is spent on local goods and services.

The 2012 Fast Growth 50 list is the most successful to date, generating a turnover of over £3billion and creating over 3000 jobs.

This is, in part, due to one of Wales’ most successful businesses, Admiral Group PLC, which appears on the list for the second year in succession, doubling its turnover between 2009 and 2011. In fact, larger firms with a turnover of greater than £20 million make up 20 per cent of this year’s list, demonstrating that growth is not only limited to smaller businesses.

Yet, even if Admiral is excluded, the performance of the other forty-nine is an incredible achievement, generating over £815 million in sales in 2011 at an average growth rate of 86%, and generating an additional £377 million for the economy during the period 2009-2011. These firms also created approximately 2000 jobs,  far higher than the number generated by inward investment into Wales during the same period

In terms of location, Cardiff remains the main centre for fast growth firms, with thirteen businesses being based in the capital city, the same as 2011. Other urban centres are also magnets for growing firms including Bridgend (six firms), Swansea (five firms), Newport (four firms) and Wrexham (three firms). The other stand-out town in Wales is the area around Welshpool in Powys, which has three significant manufacturing firms that are showing considerable growth.

This year, North Wales has only six companies, although their collective growth is considerably higher than the Welsh average. Two  counties - Anglesey, Conwy - have no fast growth businesses within their boundaries for the fourth year in a row. They are joined as Fast Growth 50 free zones in 2012 by Blaenau Gwent, Carmarthenshire, Ceredigion, Denbighshire, and Merthyr Tydfil.

As in 2011, the average age of the growth company in Wales is twelve years old, suggesting yet again that it takes time for such businesses to establish themselves in their marketplaces. The oldest business this year is Wynnstay PLC, which was established in 1918, whilst there are thirteen fast growth start-ups (five years old or less).

There are twenty seven businesses that appear for the first time on the Fast Growth 50 list whilst four companies – Kids@Play, Professional Driver Services, Smart Solutions and Trojan Electronics - return for a third time in succession. In fact, this is the second time that Trojan has made it a “hat trick”, having appeared ion the fast growth 50 lists in 2005, 2006 and 2007.

Two businesses have demonstrated four years of continuous growth, both of which made their debuts on the list in 2009. Machynlleth based Dulas had a turnover of £21.5 million in 2011, whilst Biotec Services International has grown to sales of £9.2 million over the same period.

Finally, congratulations to Glyndwr Innovations for becoming the fastest growing firm in wales in 2012.

Universities are often criticised for not engaging properly with business so the success of this university company from Wrexham is great news for the Welsh economy.

One can only hope that their success will spur on other higher education institutions to follow in their footsteps over the next few years.

LESSONS FROM THE FASTEST GROWING FIRMS IN THE USA

On Wednesday, the Wales Fast Growth 50 initiative, which was started fourteen years ago to recognise the best of Welsh indigenous business, will again showcase companies that are making a real difference within their sectors and, more importantly at this time of economic difficulties, are creating jobs within their local communities.

In fact, the fifty Welsh firms featuring on this year’s list, despite being only an average of twelve years old, will have collectively created nearly 10,000 jobs since they were started, which is an incredible achievement.

When the Fast Growth 50 project was launched back in 1999, its inspiration was a similar, but far larger, initiative since 1982 run by Inc magazine.

Indeed, the Inc 500, which identifies the 500 fastest growing firms in America, is a truly inspirational list that not only demonstrates incredible entrepreneurial feats within the World’s largest economy, but also gives clear pointers as to how future business practice is developing in key sectors.

The 2012 Inc 500 list was released earlier this month and the data for the companies featured is fascinating for those of us studying the characteristics of fast growing firms.

Whilst, the overall turnover of all Inc 500 firms in 2011 was $15.8 billion and they employed a total of 46,609 people, the median annual revenue of $8.9 million is relatively modest, as is the median employment of 36 employees (which is similar for this year’s Wales fast growth 50 firms).

More relevant is information on how the companies have achieved fast growth, especially in terms of accessing funding that, at least in the UK, is of major concern to many small businesses.

The surprising finding from Inc is that external funding is not as important to growth as expected - 77 per cent of the founders of the five hundred fastest growing businesses in the USA set up using only their own personal savings, with two thirds needing less than $100,000 to get started.

And whilst 34 per cent stated that access to external capital has been essential for growth, 42 per cent have not utilised external funding in developing their business. In fact, three quarters of companies have financed their growth over the past three years largely through cash flow from operations.

This seems to fly in the face of the popular belief that successful companies require external capital to fuel their growth. This is an important lesson for many entrepreneurs in that, contrary to popular belief, self-funding does not equal slower growth.

Whilst external capital does play a part in a number of growing firms, it can also have its problems such as ownership dilution, loss of control, and management team distraction. In fact, the entrepreneurs questioned for Inc magazine consider the biggest obstacle to growth is not finding money but actually finding good people to help the business grow, which is a vital lesson for governments in supporting businesses to expand.

Whilst entrepreneurship is increasingly seen as a young person’s game, those businesses in the USA that achieve substantial growth are managed by entrepreneurs who are overwhelmingly middle-aged white males, although they had, on average, started their first business at the age of 27.

But despite the fact that the majority of these founders are above the age of 45, they saw themselves as innovators who love launching companies and developing products. Also, unlike many entrepreneurs in the UK, they are very hands on with social media with a third directly involved in writing their companies’ tweets and Facebook updates.

The sectoral make up of the fastest growing firms in the USA also has important lessons for governments that are still tending to follow a “picking winners” policy. Rather than the high technology sectors beloved of policymakers, the fifty fastest growing firms in the USA are overwhelmingly located in traditional sectors such as advertising and marketing, consumer products and services, government services and financial services.

As various research studies continue to show that a small number of businesses create a disproportionate percentage of jobs in the economy, there are lessons to be learnt from such firms.

Given this, I urge anyone with a real passion for entrepreneurship and growth to read the stories behind such performances, regardless of whether the companies are found in the Inc500 or the Wales Fast Growth 50.

FOCUSING ON GROWTH COMPANIES FOR ECONOMIC PROSPERITY

Last week, I finished putting together the 2012 list of the fastest growing firms in Wales.

To be published in a special supplement in the Western Mail on September 19th, the list will show, yet again, that Wales has a number of excellent entrepreneurial and innovative businesses that have considerable potential to achieve further growth.

Indeed, the data on the fifty firms featured will show a record increase in turnover during the period 2009 and 2011, demonstrating that even within difficult economic times, Welsh business can be competitive in an increasingly turbulent global environment.

Thanks to their wealth and employment creating potential, such high impact firms are now becoming the focus of policymakers around the World. Indeed, whilst entrepreneurship remains a key goal for developing local economies, there is an appreciation that as many firms will never grow beyond providing a local service, there needs to be increasing focus on those businesses that have the potential to grow further and create jobs.

Not every business wants to grow - recent research by Gallup in the USA found that 75 per cent of small business owners in the USA did not want their companies to grow, preferring to remain small. Whilst these companies are important to their local economies, they should not be confused with the other 25 per cent that want to expand to create companies that are of real added value to the regional and national economy. In fact, national and regional governments around the World are now realising that focusing on high growth businesses, or the so-called gazelles, can give them more “bang for their bucks” in ensuring that public sector business support is targeted towards those that can create jobs in the economy.

The “Growing State Economies” report from the National Governors Association representing the fifty individual states in the USA, and which I have been discussing for the last three weeks, is unequivocal in its support for such businesses. Its author, Governor Heinemann of Nebraska, emphasised that high growth businesses are the primary source of job creation, prosperity, and economic competitiveness, and that public policy should be focused on growing them into large employers. But it is not only in the USA where there is an increasing policy focus on growth firms.

Across the border, their Canadian neighbours have finally appreciated that its economy is failing to develop enough gazelle firms, despite leading world-class research and development at universities, a highly educated population, and a favourable business climate. The proposed solution is to create a comprehensive “National Strategy for High-Growth Entrepreneurship” to address the key impediments to the success of high growth Canadian firms, ensuring that key actors such as national and provincial governments, the private sector and universities all take some responsibility for implementing such a plan.

Across the Atlantic, European nations have also been focusing on how to develop the conditions for further growth.

In Sweden, one of the few EU countries to avoid a major recession, they have created an Agency for Growth Policy Analysis. This is charged by the Swedish Government to shed light on the areas most significant to growth, strengthen Swedish competitiveness and create the conditions for more jobs and growing companies throughout the country.

Its Nordic cousin Finland has also recently announced that it will be focusing its government services on targeting growing firms, with the aim of becoming a European centre for growth companies in technology sectors. These include the “Funding of Young Innovative Growth Companies” initiative, which can provide financial support of up to one million euros per enterprise. It has also developed the ‘Vigo Accelerators” initiative, which uses selected independent companies, run by internationally proven entrepreneurs and executives, to help the best and the brightest start-ups to grow faster, smarter, and safer into the global market. The mentor entrepreneurs also co-invest in the companies they support.

In South Korea, there has been a policy focus on transforming traditional companies to high-growth firms, mainly through a Global Stars programme in which 100 SMEs are selected for a comprehensive support package in terms of technology, financing, and exporting. A similar programme has been set up in Singapore which assists promising local businesses with funding, management development, technology and innovation enhancement, and internationalisation.

Therefore, with governments across the world developing new co-ordinated approaches to ensuring that those companies with potential are given every opportunity to grow, there are certainly lessons to be learnt in terms of policy development by both the UK and Welsh Governments.

Certainly, if Wales is to emerge from the current economic downturn, then it will only do so by maximising the potential of its business community, particularly those who want to grow and create wealth and employment.

INNOVATION IN WALES - 3D EDUCATIONAL TECHNOLOGY

Last week, I was delighted to be among the 200 invitees to No 10 Downing Street for a celebration of Wales, hosted by the Prime Minister.

Attended by representatives from all political parties as well as celebrities from Gavin and Steacy and our rugby captain Sam Warburton, it was a wonderfully eclectic evening for all present.

However, what was most pleasing to me about the event was the presence of a large number of Wales Fast Growth 50 firms, the companies creating wealth and employment across the economy, including a number from North Wales.

One of those present was Anas Mawla, founder of Gaia Technologies of Bangor. A highly innovative business, it assists schools to make the most effective use of information technology in order to improve learning experiences and provide a more stimulating environment for young people in the classroom.

The story of Gaia is one that many young entrepreneurial graduates today should aspire to. Anas Mawla and his brother Ayad graduated from Bangor University’s Electronics Department where they studied Computer System engineering. Together with Katerina Patochea, herself a graduate of the Bangor University Marine Biology Dept, they borrowed £800 from Katarina’s credit cards and started the business while still enrolled as students.

Today, Gaia employs over 80 highly skilled and talented individuals and is forecasting that its annual turnover growth will reach £24m in the next two years. I recently visited Anas at his offices in Parc Menai and was struck by the commitment of the company to the local region. In fact, the key motivation for establishing a computing business in North Wales was their desire to contribute to where they live by employing and develop skilled IT graduates, as well as using the company to leverage in additional resources and interest to the region.

Such dedication demonstrates that great businesses can be grown anywhere regardless of location and the company is committed to further developments in the Gwynedd area through building on a service that realistically budgeted, innovative and friendly. What was most exciting about the company was the way that they have developed 3D technology for the educational market, with the funding of this innovation coming from Gaia’s own surpluses.

All cinemagoers will know about the 3-D revolution started by James Cameron in his groundbreaking film Avatar. However, the real application of 3-D technology is not in the movies but in education, especially as some subjects are far easier to teach if you can visualise them. As someone who thought he had seen it all, putting on a pair of 3D glasses at Gaia’s headquarters in Bangor was an incredible experience.

In history, you could walk down a street in plague-infested London in 1665, find yourself in the World War 1 trenches or see ancient Rome in all its glory. In science and engineering, there were 3-D depictions of various creatures, the inner workings of a sports car and even the doomed nuclear reactor in Fukushima, Japan. It is an amazing learning experience that allows students to enhance their understanding of difficult subjects by learning through observation and investigation rather than by instruction. It also helps teachers simplify complex issues making them easier to understand and speeding up the learning process.

Simply put, it is a fantastic technology within a highly innovative business that is currently the World leader in the generation of 3D interactive images for the education sector and, most importantly, is based in Bangor not Silicon Valley!

 We should be exceptionally proud of a company such as Gaia that is not only a world-beater, but is committed to the local economy and I am sure we will all be following their developments with interest as they take the best of North Wales out to the World over the next few years.

SUPPORTING GROWTH BUSINESSES - THREE FAST GROWTH 50 FIRMS MAKING THEIR MARK INTERNATIONALLY

HSBC has established a new programme to find and reward the UK's best and most ambitious business thinkers.

Business Thinking  is the bank's new initiative to find and reward the UK's best business thinkers. Through a series of networking events, it will enable businesses to exchange ideas, create new contacts and challenge their thinking.

This includes visits by the companies to international "Thought Exchanges" to Hong Kong, New York, Sao Paulo, Dubai and Paris where they will get the chance to network, meet local businesses, learn from thought leaders and explore international business potential.

I am pleased to say that three of the six Welsh finalists companies are Fast Growth 50 firms, namely  Excelerate Technology (fastest growing firm in knowledge and creative industries 2011), TBDUK (Sustainable Growth winner 2009 and 2010) and Epitiro (Sustainable Growth winner 2010).

The overall winner will be announced at the end of the year and let's hope it's a Welsh company in 2011.

FAST GROWTH 50 AND THE FAST TRACK 100

Last month, we published the thirteenth edition of the Wales Fast Growth 50 (FG50) supplement, which is the only list of the fastest growing firms in Wales.

There is also a UK-based list - the Virgin Fast Track 100 - that is one year older and is published in the Sunday Times. However, it  rarely features Welsh-based companies, with the vast majority being found in the South East of England.

Funnily enough, having seen the Inc 500 list in the USA, I had thought of developing a national list for Ireland back in 1996 when I was working at the Michael Smurfit Graduate School of Business in Dublin but left before I got round to it.

After I had come back to Wales to take up a chair in entrepreneurship at the University of Glamorgan, Dr Hamish Stevenson had already established the Virgin Fast Track 100 as the UK equivalent in 1997. So, I decided to concentrate on developing a list to focus attention on the growing impact of entrepreneurial firms in Wales.

So is there a difference in the methodology used to identify growth companies in the Fast Growth 50 as compared to the Virgin Fast Track 100?

In both competitions, companies are:

• identified either by research (through business information databases) or nomination (the latter is used because an increasing number of companies do not divulge their turnover in their annual accounts published in Companies House)
• ranked by their compound annual growth rate (CAGR) and confirmed by their latest audited accounts
• have year on year sales growth sales of at least £250,000 in the base year 

However, the Virgin 100:

• ranks companies over three years – FG50 decided to do it over two years in 1999 to identify those that were growing quickly over a shorter period of time 
• enables companies to have two base years – we stick to one base year
• only lists companies with sales of at least £5m and ten or more employees in the latest year – in Wales, that would exclude a high number of growth firms with real potential 
• excludes companies with sales of over £500m – FG50 did restrict the list to SMEs only for a decade but has opened it up to larger firms because of the potential impact they could have on the economy
• only lists companies that are profit-making in the latest year – we do collect this data but do not make it a condition 

Of course, as with any lists with arbitrary definitions, there will be differences in the companies identified. Over the last few years, the tendency has been for the Wales Fast Growth 50 to identify more Welsh companies than the Fast Track 100, probably because of the localised research that we undertake with key stakeholders such as accountants, banks and law firms.

As mentioned earlier, the main similarity is that both lists are modelled on the Inc. 500 in the USA. More importantly, the focus is on giving attention to home-based entrepreneurs, something that the Fast Growth 50 and the Fast Track 100 have done successfully since the late 1990s.

The next Virgin Fast Track 100 is published on December 4th 2011 in the Sunday Times.

FAST GROWTH 50 FIRM CREATES 30 JOBS

One of this year's Fast Growth 50 firms, the Transport Broker Group, is set to create 30 new jobs at their brand new offices over the coming months, with positions available for customer service personnel, sales team members, and team leaders.

This comes a few weeks after the Transport Broker Group was named the 30th fastest growing Welsh business at the Fast Growth 50 business awards at a gala dinner in Cardiff’s Holland House Hotel.

Building on its impressive growth over the last few years, the company has purchased brand offices which is double the size of their previous premises and will allow the Transport Broker Group to further expand its workforce.

As a result, the Transport Broker Group is planning to double its number of employees over the course of the next 12 months, with staggered intakes of new workers over the course of the year. Fifteen new sales staff were signed up earlier this month, and another thirty vacancies have just been opened as the Transport Broker Group looks to add again to its growing workforce.

The Transport Broker Group is a conglomerate comprising of the UK’s leading limousine rental provider, Limo Broker, coach hire operator, Coach Broker, and the luxury transport brokerage, Cars for Stars. From the company’s Cardiff based call centre, the Transport Broker Group is able to coordinate transport hire services in all parts of the UK through their network of approved agents.

The Wales Fast Growth 50 is the definitive barometer of Welsh entrepreneurial firms and is published annually by the Western Mail.

CELEBRATING THE 2011 WALES FAST GROWTH 50

WESTERN MAIL COLUMN SEPTEMBER 24TH 2011

During a week when enterprise zones where finally announced in Wales and the Welsh Government found three more sectors to add to their list of favourite industries, the Western Mail published the annual list of the fastest growing firms in Wales.

Since the Wales Fast Growth 50 was established in 1999, 418 firms have appeared on the thirteen lists and it is estimated that all of these companies have created around 20,000 jobs and generate over £10 billion of turnover into the Welsh economy every year, much of which is spent on local goods and services.

This year’s list was unusual in that it included one of Wales’ most successful businesses, the Admiral Group PLC. That is great news for the economy i.e. that one of our largest firms can generate growth normally found in younger and smaller businesses. Of course, with a turnover of £1.6 billion in 2010 and over 3500 employees, Admiral dominates the data for the fifty firms.

Yet, even if it is excluded, the performance of the other forty nine is an incredible achievement, generating a £600 million in sales in 2010 at an average growth rate of 108% and putting an additional £314 million for the economy during the period 2008-2010 – a record for the Fast Growth 50 even without Admiral. These firms also created a thousand additional jobs for Wales at a time of uncertain economic conditions

Whilst Admiral PLC is the largest company on the list, this year seems to be one where mid-sized companies are also beginning to grow within the economy, with a further twenty one firms generating a turnover of more than £5 million in 2010. This is a substantial group of companies that could become major players within their sectors over the next few years and hopefully follow in Admiral’s footsteps. What is now critical is that support, from both the private and public sector, is focused on developing the further impact of these firms, whose challenges are very different from the majority of the business population.

The Fast Growth 50 also has a number of new businesses, featuring fourteen fast growth start-ups that are five years old or less. However, none of these are in a technology-based sector, which should worry those who advocate focusing the majority of support on backing such companies. Indeed, one of the major policy decisions of the Welsh Government has to been to focus its support on six key sectors (now extended to nine) and yet, as the last thirteen years of the Fast Growth 50 has shown, growth companies can be found in any sector. The 2011 list is no exception.

Of course, as this column has pointed out on various occasions, the results of the Fast Growth 50 should not be a shock to anyone. The real surprise will be when policymakers stop ignoring the overwhelming evidence and finally realise that by focusing on developing these companies there could be enormous rewards for the economy.

This was emphasised by yet another recent study, this time from Endeavor and the Global Entrepreneurship Monitor (GEM), which verified that the answer to job creation lies in high-impact entrepreneurship. In fact, high-growth entrepreneurs are rare yet actually employ significantly more people than low-growth entrepreneurs.

For example, their research found that whilst high-growth entrepreneurs represent only four per cent of the total number of entrepreneurs, the businesses they founded created close to 40 per cent of the total jobs. In addition, high-growth entrepreneurs are planning to add up to fifteen times more jobs than low-growth entrepreneurs over the next five years.

Finally, and most importantly, it found that once high-growth entrepreneurs become successful, they are the most likely to start funding other ventures as angel investors, thus creating a strong entrepreneurial ecosystem within their local business community.

But perhaps the main lesson for policymakers who seek to pick winning sectors comes from Afonwen Laundry, the fastest growing firm in Wales.

Initially established in 1935, it is now one of the UK’s largest privately owned laundry and linen hire companies in the UK, supplying over 40,000 hotel bedrooms throughout the UK. The company’s growth has exploded in the last couple of years and it now supplies over 1.6 million items of linen across a wide range of hotels across the country.

It opened a new business in Cardiff some three years ago and has delivered over 150 jobs in that period, growing from nothing to a £10m a year business in its initial three years. It now employs close to 400 staff across four sites in Cardiff, Leeds, London and North Wales.

When I was younger, the blue vans with white lettering were a regular feature on the roads of North Wales and I never thought that they would one day feature in a list of the fastest growing firms in Wales. Indeed, to have a family business in a traditional industry from a small market town on the Llyn Peninsula is an incredible achievement, especially as it looks set to become the largest player in its sector across the UK.  They are worthy winners of this year’s list and demonstrate, like the rest of the Fast Growth 50 firms, that success is not limited to certain types of businesses based in a few key sectors.