During the last economic downturn nearly a third of net new jobs were created by just 2% of companies—enterprises with $10 million to $1 billion in revenue, growing an annual rate of 20% or more, according to a new report by Wakefield Research. The study forecasts that this same cohort of companies will likely have an outsized impact on job creation during the current economic slump. These firms “reacted quickly to the COVID-19 outbreak with policies aimed at securing revenue, with most maintaining positive growth outlooks into 2021,” the study says.
The report identifies these fast-growth businesses as “ScaleUps,” which are distinct from small businesses, startups, and corporations. “When you’re not sure if your thing can be a thing, you’re in startup phase. When the question [you ask] is, ‘how big can this thing get?’ you’re squarely in the ‘scale up’ phase,” says Ryan Hinkle, managing director at Insight Partners, a private equity and venture capital firm that commissioned the study. He adds: “When everybody knows what the thing is, you’re probably grown up.”