Developed by GC and Red Flag Alert, Growth Flag launched in 2023 and is an innovative, online tool that provides a forward-looking view on growth in individual businesses and local economies, enabling local areas to target business support and economic development resources.
The second Growth Flag Annual Report sets out the latest insights and provides an outlook on high growth potential in local economies and businesses across the UK for 2025.
The Annual Report was launched at 'The Growth Flag Look Ahead 2025' event at SITU in central Manchester on Thursday 16th January, and brought together over 70 leaders from the economic development sector for a morning of talks, networking and the launch.
Key Annual Report highlights show that:
- Overall, over 10% of businesses in the UK are likely, or very likely, to grow by 20% in the next year.
- The foundational economy shows high levels of growth potential, with a slightly higher share of high growth potential businesses than other parts of the economy.
- Report also highlights that some sectors such as manufacturing have much higher shares of high growth potential businesses than average.
- Overall, the report spotlights that every part of the country has a role to play in achieving economic growth, not just city-regions and tech clusters.
A twin-track approach to supporting the foundational economy and emerging sectors is key to unlocking the UK’s growth potential, according to the report.
Areas including Perth & Kinross, Bath and North East Somerset, and Torfaen all show particularly strong growth potential. The report also highlights that some regions, including the South West and South East of England, have significantly higher shares of high growth potential businesses than average – around 12% of businesses.
Significantly, the analysis highlights that there are high levels of growth potential in businesses in the foundational economy, which includes businesses providing critical inputs to infrastructure and everyday essentials. This highlights the need for business support and strategies to take a twin-track approach to supporting both the foundational economy and emerging technologies.
Using first-of-its-kind analysis, the report also highlights that growth potential can be found in businesses regardless of their sector. However, some sectors such as manufacturing have much higher shares of high-growth potential businesses than average – 15% of manufacturing businesses compared to 10% on average.
Richard Jeffery, Co-Founder of Growth Flag and National Director, GC Business at The Growth Company, says:
“With growth now firmly at the top of the agenda, nationally and in local places across the UK, finding and unlocking that potential is more important than ever.
“As we look ahead to 2025, we can see significant growth potential exists, while also recognising that significant challenges remain. Growth at the national level remained largely stagnant over 2024, but there is significant potential to unlock growth in businesses across the country, as the Growth Flag annual report highlights.
“A significant finding in the report spotlights the importance of the foundational economy, which should not be underestimated or ignored. Local areas should give attention to this sector through targeted support to maximise local growth efforts - on top of support being focused on emerging sectors.”
Richard West, Co-Founder of Growth Flag and Managing Director at Red Flag Alert told us:
“Growth Flag is continuing to power informed decisions by local government, universities, government agencies and more on how to effectively support businesses in local places across the UK. The innovative data highlighted in the report identifies growth potential in businesses across a wide range of sectors and places, while also providing key insights on risk and those businesses that need urgent support to realise their potential.”
The full report is available to read here.
To find out more about how Growth Flag can support your team, please get in touch.