Why good public transport is key for scaling your growth business

Having staff increase their use of public transport by just one percentage point would boost number of scale-ups across Britain by nearly 4pc.

Ensuring your growth business has good public transport links could be the single best thing you do for your scale-up.

Having staff increase their use of public transport by just one percentage point — i.e. from 30 per cent this year to 31 per cent next, for example — would boost the number of scale-ups across Britain by nearly 4pc, according to new research from Barclaycard and the Centre for Economics and Business Research (Cebr). A good public transport system means scale-ups can access talent based further away from their company’s offices.

Relationship between critical success factors, and number of scale ups

Change in factor over a 12-month periodAssociated impact of change in factor on number of scale ups over a 12-month period
1 percentage point increase in public transport use3.8%
1% increase in imports2.4%
1% increase in gross household disposable income per person1.8%
1% increase in exports0.5%
1% increase in competition, based on new businesses created-0.2%
1 percentage point increase in commercial property prices-0.6%
1 percentage point increase in labour costs-0.9%
1 percentage point increase in inflation-1%
Source: Barclaycard/Centre for Economics and Business Research (Cebr)


Nina Skero, director of Cebr, said: “Public transport emerges from the study as a really important factor that makes a substantial difference to the number of companies achieving high-growth rates.”

Rebecca Burn-Callander, small business commentator, added: “If there’s good Wi-Fi on the train, staff can use that time to be more productive; it’s small factors like this which can help your business grow.”

The surprising correlation between public transport and boosting the volume of scale-ups nationally is just one surprising finding in a new Barclaycard survey identifying critical factors for boosting UK business growth.

Just 37,00 scale-ups contribute more than £1.3tr to the economy, which is why it’s so important to support them; by comparison, the UK’s 5.7 million SMEs contribute £1.3tr. A scale-up is defined as a company employing at least 10 employees that has enjoyed 20pc annual growth over a three-year period. Clearly, scale-ups have an outsized contribution to UK plc.

Increased imports

Increasing imports by 1pc would have the second-largest impact of growing the number of scale-ups in Britain. Easier access to imports, whether they are food ingredients or sourcing a widget from an overseas supplier as opposed to solely relying on domestic ones, is identified as the second-largest trigger for scale-up growth. A 1pc increase in imports would boost the number of scale-ups by 2.4pc in just one year.

Burn-Callandar said: “It’s something Government needs to keep in mind at this crucial juncture in Brexit. Just a 1pc increase in the volume of imports has a big effect on the number of scale-ups.”

Inflation, increased labour costs and rising commercial property rent were identified as the biggest disincentives to growing businesses.

That said, six out of 10 (61pc) of business leaders believe the UK is still a good place to scale up business.

Sixty-two per cent believe scale-up companies need to trade with markets outside the UK to be successful.

And a similar proportion say that companies in this stage of fast growth neeed to establish overseas outposts in order to grow.

Rob Cameron, CEO of Barclaycard Payment Solutions, said: “Scale up businesses are critically important to the UK economy, but in today’s uncertain climate, more than ever they face a range of challenges such as access to talent, financing and infrastructure. As our analysis shows, even incremental improvements in the business landscape could have a significant, positive impact on business growth.”

Given the huge economic effect that scale-ups have on the economy over start-ups, which suck up most of the oxygen in the debate, Burn-Callander says that scale-ups have a visibility problem. Because scale-ups are defined as companies which have seen averaged annualised growth a year over three years — with growth being measured by turnover or employment — the only way to monitor that growth is through Companies House. And because accounts are always filed after the event, that growth period may have already come and gone.

Burn-Callander said: “It’s like hunting a needle in the haystack; scale-ups are the true unicorns in the forest.”

Further reading

One in three SMEs too busy to formulate growth strategy