While the UK’s future trading relationship with the EU remains uncertain, we are beginning to see evidence of the economy’s enduring resilience.
Despite concerns about weak investment, this week’s GDP figures provided further positive signals for the economy.
Recent research from Deloitte has shown that corporate optimism is edging upwards and consumer confidence is rallying – and this positive sentiment is mirrored by the UK’s scaleups.
More than 80 per cent of scaleups – early stage, high potential businesses – say they have already expanded, or intend to do so in the next three years, with the US, the EU and China identified as the most attractive markets.
This is good news, since these innovative businesses can provide the impetus that the UK needs to shake off low productivity and drive growth.
Yet our report finds one potential stumbling block to these businesses fulfilling this promise. Scaleups remain fiercely self-sufficient.
Despite acknowledging that collaboration with government, trade associations or corporates could bring benefits, such as access to broader networks and unfamiliar markets, more than half sought no public or private support to scale up overseas.
Collaboration between big businesses and scaleups can be mutually beneficial: big businesses have strong brands, market access and maturity, while scaleups have agility, energy and speed to market. The magic is bringing them together.
But there are cultural barriers to overcome. Many scaleups are wary of collaboration, with nearly half of firms worried that they would be sacrificing control of their identity.
Some express frustration that large businesses often expect them to adhere to onerous, time-consuming and expensive processes, like security and contract negotiations.
Corporates must simplify their processes to make it easier and cheaper for young businesses to work with them. More also must be done to raise awareness of the various models of collaboration between corporates, entrepreneurs, and aspiring scaleups, as well as the mutual benefits and success stories.
Big business can help scaleups to develop their products and establish themselves in new markets more quickly than they could alone. A number of big banks have already done this with innovative fintech firms.
Yet UK corporates have often been sluggish to keep up with adopting innovative technologies.
According to a Deloitte survey, just 16 per cent of business leaders considered their organisation ready to exploit innovative technologies like robotics, cognitive computing, and artificial intelligence. This was lower than both the global and Western Europe average.
Collaboration with scaleups can help big businesses experiment with innovation in a low cost, low risk way.
This could include three to six month accelerators, where corporates provide “seed” funding and intensive mentoring for startups to grow quickly, developing products or services they are interested in.
The benefits to both sides are clear. The strength in big corporate collaboration with early stage businesses lies in our differences.
To prepare for the future and ensure that the UK’s resurgence of optimism continues, businesses need to build partnerships beyond the boundaries of our organisations.