Businesses that used words like “management”, “team”, and “project” in their job advertisements and news articles were more likely to have high growth than those that used words like “tax”, “law” and “pension”, according to free text analysis of websites by the Office for National Statistics’s (ONS’s) Data Science Campus.
Through analysis of the Management and Expectations Survey (MES) with datasets from the Department for Business, Energy and Industrial Strategy (BEIS), the team also explored what management practices and education tell us about high-growth businesses and found that:
- high-growth businesses were more likely to have at least one employee with a degree, compared with regular businesses; 83% of high-growth businesses had at least one other staff member with a degree, compared with 75% of regular businesses
- there was a drop in the rate of high-growth businesses in organisations where every manager had a degree
- high-growth businesses were more likely to distribute performance bonuses to managers and other members of staff; 66% of high-growth businesses gave out performance bonuses based on meeting a production target, compared with 57% of regular businesses, and this pattern was repeated for other members of staff
- among high-growth businesses, 90% set at least one production target, compared with 86% of regular businesses
Tom Smith, Managing Director of the Data Science Campus, said: “Understanding what makes a business successful is varied and complex. Through exploring how non-traditional data sources can help us understand business success, we hope to show how new evidence can be found that can inform decisions regarding what policies and structures could support those businesses who need it. These survey responses were voluntary but still give an insight into what could be driving success in our economy.
“At the Data Science Campus, we want to use novel and innovative techniques to unlock the power of data, to help the UK make better decisions that can help power the economy and improve lives. This exploratory research can give us new insights and help to improve the statistics the ONS produces.”
Notes to editors:
The Management and Expectation Survey (MES) is a non-mandatory questionnaire run jointly by the ONS and the Economic Statistics Centre of Excellence (ESCoE). The survey’s aim is to gather information on businesses’ management practices concerning and future expectations of turnover, employment, expenditure and capital investment growth.
The BEIS has created a longitudinal high dataset using Inter-Departmental Business Register (IDBR) data and HM Revenue and Customs’s (HMRC’s) Value Added Tax (VAT) data. This was used to create the flag that is used in this work to identify high-growth businesses.
The assessment of high growth is based on the Organisation for Economic Co-operation and Development’s (OECD’s) definition of high growth in employees (that is, compound 20% growth per year over a three-year period).
In this project, we have explored the potential for non-traditional data sources to add to our understanding of high-growth businesses and business sectors. The understanding of what makes a business one of high growth is varied and complex. The work presented is used to illustrate the potential explanatory power of the datasets, but it should not be taken as a full analysis of this area.
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