According to findings by retail technology accelerator Eccomplished, just 7% of the 8,963 businesses that enrolled in the GrowthAccelerator scheme between July 2013 and July 2014 were technology companies.
The scheme was launched in 2012 to help up to 26,000 companies in England grow their businesses. The partnership between the government and private sector encourages business experts to mentor companies and identify barriers to growth such as securing finance, commercialising innovation, developing leadership and management capability.
But the UK’s technology sector is missing a trick, according to Stephen Millard, CEO at Eccomplished.
“The FOI responses were really enlightening – it appears that in comparison to other sectors, few technology companies are taking advantage of the additional financial and growth support available to them.”
Not engaging with startups
Eccomplished also discovered that, of the 647 technology companies that enrolled in the scheme last year, 158 were at least 10 years old, and just 52 were less than 12 months old, revealing a lack of interest from startups.
“The findings clearly beg the question of why more technology companies (and early stage ones especially) aren’t taking advantage of this - and potentially other schemes,” said Millard. “The UK is one of the world’s most sophisticated and advanced markets, but we need to continue to innovate to remain competitive. These types of schemes support innovation and drive growth, yet few businesses are taking full advantage.”
Imogen Wethered, CEO of mobile queue management startup Qudini, told Computer Weekly her company had not used the GrowthAccelerator scheme because there were too many questions in the questionnaire.
“We just didn’t have the time to complete it,” she said.
“Secondly, I have so many things to do and roles to fulfil that I didn't feel I would have time to attend their workshops and I receive similar support from Wayra Telefonica's accelerator and London Mets accelerator where our office is.”
Meanwhile, Markus Ehrnrooth, co-founder of mobile retail startup knomi, said he had not heard of the scheme but, after a quick look at their website, he said the scheme needed to be more attention grabbing.
“We don’t have the time to figure out what they really do right now too," he said. "I'm sure it is amazing, if for example they give government money away for free, but it needs to be much clearer to a startup – in size 50 font for example!”
Huddle, the fast-growing British software company, which is making strides in the enterprise market with its collaboration platform, was one of the early beneficiaries of the scheme in 2012, and CEO Alastair Mitchell said it gave him and his co-founder a grounding in how venture capital and this type of investment work.
“This helped us get on the first rung of the ladder, raise our first round and provide some insight into how we took the business to the next level,” he said.
“GrowthAccelerator continued to help us as we went through global expansion. Rather than re-inventing the wheel, you can learn from people that have been there before and miss out three or four years’ worth of early mistakes.
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“I’d certainly say that, if you’re a small and growing business in London, looking to raise some funding, you can’t afford not to go on the programme.”
Meanwhile, a spokesperson for BIS told Computer Weekly the department would welcome more applications from technology companies.
“While conventional wisdom suggests that fast growth is the preserve of technology startups, our GrowthAccelerator annual report showed that small businesses with the potential for rapid growth are found in all sectors of the economy, in all parts of the country, and can be at any stage of their lifecycle. The programme is focused on finding the firms that will benefit the most from the help available.”
Meanwhile, Alastair Paterson, CEO of Digital Shadows, said that, while all support for entrepreneurs and technology startups is welcome, some initiatives are better targeted at early stage technology startups than others.
“Measures such as SEIS, entrepreneurs’ relief and research grants from Innovate UK are very positive for example,” he said. “But in my opinion early stage, time-poor technology companies should be spending as much time as possible in the field, testing and learning from interactions with their clients. This is also the best form of training – learning and adapting on the job."
Paterson goes on to say that mentoring can be of limited use to startups at an early stage unless it is targetted to a particular sector and business problem, or comes from someone who has been a startups before themselves.
“In this case, the company is usually best placed to approach its own carefully selected mentors rather than have government providing them on their behalf,” he concluded.