{"id":1391,"date":"2011-04-01T08:26:52","date_gmt":"2011-04-01T08:26:52","guid":{"rendered":"http:\/\/localenterprise.wordpress.com\/?p=1331"},"modified":"2011-04-01T08:26:52","modified_gmt":"2011-04-01T08:26:52","slug":"high-growth-and-high-start-up-rates-why-we-shouldnt-chase-them","status":"publish","type":"post","link":"http:\/\/realisedevelopment.net\/index.php\/2011\/04\/01\/high-growth-and-high-start-up-rates-why-we-shouldnt-chase-them\/","title":{"rendered":"High Growth and High Start Up Rates: Why We Shouldn’t Chase Them"},"content":{"rendered":"

Colin Bell over at Winning Moves picks over this old chestnut<\/a> in his latest post.<\/p>\n

Should we throw our limited resources at\u00a0businesses\u00a0that we\u00a0believe\u00a0have high growth potential or should we just go for lots of start-ups knowing that a\u00a0minority\u00a0of them will experience high growth anyway?<\/p>\n

The plain truth is that both are equally foolish policy goals.<\/div>\n
<\/div>\n
We simply can’t pick winners\/high growth businesses. \u00a0So how do we know which to resource?<\/div>\n
<\/div>\n
And as Drucker said ‘you can’t have the mountain top without the mountain’ . \u00a0High growth businesses emerge from a strong and vibrant enterprise ecology. \u00a0An ecology that is diverse, tightly knit and well connected (bridging and bonding, social and cultural capital).<\/div>\n
<\/div>\n
Focus on building the mountain and the top will look after itself.<\/div>\n
<\/div>\n
But please don’t build the mountain by rushing to increase the start up rate.<\/div>\n
<\/div>\n
When we do this we just increase the failure rate too and that undermines aspiration and confidence. \u00a0So start fewer businesses, but make sure they are good ones, team starts, well thought through and researched. \u00a0Get survival rates into the 90%s after three years. \u00a0Not just survival, but successful. \u00a0Allow these small but significant success show the way to others.<\/div>\n
<\/div>\n
So set up a broad enterprise ecology – lots of people with ideas and the confidence to act on them (this is not just about business but about social impact, culture, festivals, campaigning and so on) and build social networks, communities, that know how to support their members.<\/div>\n
<\/div>\n
Invest your economic development budget in supporting\u00a0people, who really are committed to making things better, and building communities. \u00a0Smart, confident people in competent communities will not only give you the economic outputs that you require – but they might just give you something much more interesting as well.<\/div>\n
<\/div>\n
I expect these ideas to be dismissed by those who have High Growth and Mass Start Up Programmes to sell, and by those running economic development teams who have for decades been buying these programmes and commissioning evaluations that say ‘much has been achieved but much remains to be done’. <\/em><\/div>\n

\n<\/em><\/div>\n
But\u00a0perhaps\u00a0some will see that now is as good a time as any to try something new….<\/em><\/div>\n