Bad Public Policy is Stunting UK High Growth Potential

Support for high-growth firms by the UK and Scottish Governments is substantially misconceived and could be holding back economic growth, according to new research to be published this week. Researchers from the Universities of St Andrews, Glasgow and Stirling have found a mismatch between the true nature of Britain's high growth firms and the policies developed to support them. Their study concludes that the Westminster and Scottish governments have been over-subsidising technology firms many of which are incapable of growing, while missing the target on businesses with genuine high growth potential. The research - "Increasing The Vital 6% - Designing Public Policy to Support High Growth Firms" - is published this week by NESTA (National Endowment for Science, Technology and the Arts). It calls for a "major" overhaul of state support for firms with high-growth potential. High growth firms constitute around 6% - often referred to as the 'vital 6%' - of the business population but account for around half of all job creation and are crucial for growth and economic prosperity. If public policy to foster the creation and growth of these firms is badly designed, economic growth will be stunted.