One in six scale-ups (17%) in the UK come from the health and social care sector, followed by professional services (13%), wholesale and retail (12%), and administrative and support services (11%), according to research published by OakNorth Bank and the Social Market Foundation cross-party think tank.

The report ‘The scale of the opportunity’ found that while scale-ups represent just 1% of all SMEs in the UK, they account for 22% of all SME turnover (£497 billion), as well as 8% of all SME employment.

On average, each scale-up employs over seven times as many workers as their non-scale-up SME equivalents. However, scale-ups are not spread evenly across the country. While 38% of scale-up employees work in the capital and the Southeast, and one in five (20%) are located across the North of England (Northeast, Northwest, and Yorkshire & the Humber), less than 10% are situated in Scotland and less than 5% are in Northern Ireland and Wales each.

These figures reveal that more needs to be done to create clusters of scale-up firms scattered more evenly throughout the country, and that government needs to identify key sectors to prioritise in each geographic hub.

Rishi Khosla, co-founder and chief executive of OakNorth, said: “We know the outsized contribution scale-ups have on the UK economy which is why we made it our mission to support and empower these businesses. Since our launch in September 2015, we have lent over £10b to scale-ups, directly supporting the creation of more than 40,000 new jobs and 29,000 new homes across the UK, the majority of which are affordable and social housing. Yet despite their significant contribution to the economy, SMEs still face significant barriers to scaling. Addressing these barriers is vital for ensuring the UK maintains its pole position across sectors such as green/climate science, fintech, life sciences, data science/AI, therapeutic care services, hospitality/tourism, creative/performing arts, as well as boosting productivity and economic growth.”

John Asthana Gibson, researcher at Social Market Foundation, commented: “Our inability to scale the many high-potential businesses that have started here, and ensure that they are spread throughout the country is holding the entire economy back. But there is no silver bullet to the situation. Both the UK’s business infrastructure and culture need to change to improve scale-up growth and spread clusters of high-growth companies more evenly around the country.”