Despite the economic boom, the climate for high-growth companies, or scale-ups, has deteriorated over the past year. This is evident from the ScaleUp Dashboard 2019 of Erasmus Centre for Entrepreneurship and Rotterdam School of Management, Erasmus University (RSM). UP! Rotterdam is one of the programs that supports scale-ups.
Less growth in number of scale-ups and decrease in growing startups
The growth in the number of fast-growing companies (scale-ups) has more than halved compared to 2018 in 2019 (from 18 percent to 7 percent). Moreover, the number of startups that grow to scale-up has decreased by 1.8 percent. "We will have to move up a gear and conduct bold experiments to develop innovative policy measures for high-growth companies. This requires more specific support and individual guidance in the different stages of a fast-growing company's life," says Justin Jansen, Professor of Corporate Entrepreneurship at the Rotterdam School of Management, Erasmus University (RSM) and Academic Director of the Erasmus Centre for Entrepreneurship.
Scale-ups do not maintain growth spurt
The ScaleUp Dashboard 2019 also shows that two-thirds of high-growth companies are losing the rapid growth spurt after the first few years. They usually achieve this growth spurt between the ages of 5 and 8. Martin Luxembourg, director of the Erasmus Centre for Entrepreneurship explains: 'Despite a good starting position and a scalable earnings model, many fast-growing companies struggle to attract new talent, obtain follow-up financing and organise the explosive complexity of their organisation.
Rotterdam has the second highest number of scale-ups
Rotterdam is the second city in the Netherlands with the most young scale-ups (fast growing startups). Amsterdam has the highest number of fast growing companies. Eindhoven, the number 3, has the largest percentage increase in the number of high-growth companies compared to 2018 (2019: +30%). In Rotterdam, 6.2% (2018: 135 companies) of all companies have a scale-up.
UP! Rotterdam helps startups grow
Start-ups experience significant challenges in scaling up their revenue model while existing high-growth companies experience difficulties in maintaining their rapid growth. This is one of the reasons why the City of Rotterdam started the UP! Rotterdam action programme. With the program it is committed to allow more companies to grow. The action programme is aimed at innovative start-ups with growth potential and scale-ups. Under the direction of the City of Rotterdam, UP!Rotterdam stimulates, advises and facilitates startups and scale-ups in their growth. UP! Rotterdam is a public-private partnership between the municipality, innovation hubs, corporates and companies in the field.
ScaleUp Dashboard is an annual survey of high-growth companies conducted by Erasmus Centre for Entrepreneurship and Rotterdam School of Management, Erasmus University led by Professor of Entrepreneurship, Prof. Justin Jansen. A fast-growing company, or a scale-up, is a company with at least 10 full-time (FTE) employees that, over a three-year period, has an average annual growth rate of at least 20 percent in the number of FTEs.