While most firms do not grow, a small number of firms maintain and even accelerate their growth over time. Accelerated growth is beneficial for job creation and economic development as it allows increased investor returns and expedited diffusion of innovation. However, for a long time, our knowledge about changes in growth patterns has been limited to linear models, with limited consideration of the dynamic nature of this phenomenon. Moreover, a focus on studying already-successful firms has resulted in the under-representation of young, small firms in many longitudinal datasets. This shortcoming was addressed by using a full sample of firms registered and active in the UK during 2000-2017.

Our paper, published in the Journal of Management Studies, offers a distinction between three concepts of growth: absolute growth, benchmarked growth, and accelerated growth. The accelerated growth phenomenon is likely to coincide with or precede the emergence of firms identified as

(a) ‘scale-ups,’ e.g., firms with annualized growth of at least 20% in sales and employment over a three-year period,

(b) ‘blitzscalers,’ e.g., firms which prioritize growth rate over efficiency, or

(c) ‘unicorns,’ e.g., startup firms valued at more than US $1 billion.

In this paper, we use growth acceleration to describe the emergence of today’s exceptionally successful firms across varied industries, some outliers in the overall population of business firms, as well as to predict the factors which increase the propensity of acceleration.

Our results pertain to the three groups of factors affecting firm’s likelihood to accelerate in sales, market share, employment, productivity.

Firm factors:

• Younger and smaller firms are more likely to accelerate in sales than mature and larger firms, which are more likely to accelerate in market share. This result indicates, that two firm growth trajectories – absolute (sales) and relative (market share) – are quite variable.
• Four firm acceleration types vary in their relationship to each other. Two of the acceleration types—sales and market share acceleration—are directly and positively intertwined (i.e., firms selling more are likely to hold larger market shares), while two other types—productivity and employment acceleration—are negatively interrelated (e.g., increasing productivity in labor and assets often entails generating more value from fewer employees).

Industry factors:

• Market competition fuels acceleration propensity of firms across all acceleration types. For smaller firms, market competition particularly accelerates sales. However, large firms do not seem to benefit from intensive competition as much.
• Industry switching hinders firm’s propensity to accelerate.

Regional factors:

Firms from regions with vast external knowledge are more likely to accelerate. Regional knowledge stemming from multinationals (MNEs), in general, and their MNEs employees, specifically, increases a firm’s acceleration propensity in market share, employment, and productivity.

Our study has several implications.

For researchers:

• Building on and advancing prior research on firm growth dynamics, we draw attention to growth acceleration as firm’s ability to grow faster each year. In doing so, we conceptually delineate ‘flywheel’ firms which increase their growth rate over time from the firms which increase their total size (i.e., scale-ups) or grow larger compared to competitors (i.e., blitzscalers).
• Combining two theoretical  foundations, we explain that firm acceleration occurs at the intersection of firm- and market-level conditions and empirically examine the strength of organizational, industry and regional drivers.
• Additionally, we offer a funnel-shaped model of firm growth acceleration (Figures 1 and 2) and describe how four different types of acceleration may interact and manifest as a multidimensional phenomenon.

For policymakers:

• Policies targeting increased firm productivity are unlikely to foster a meaningful surge in job creation.
• Policymakers may utilize firm age to inform which forms of growth acceleration are most probable, enabling more fruitful programs.
  • Policies targeted at young firms and directed at accelerating their sales growth, i.e., market-demand pull policies – are likely to be especially fruitful.
  • Policies targeted at more mature firms appear better aimed at employment and market share growth acceleration.
  • Policies targeted at productivity acceleration appear to be best suited for firms which have survived their early youth (8-15 years old).
• Although we study growth and acceleration, aspects beyond the desire to be large are worthy of consideration. With environmental and social concerns in mind, policymakers may wish to avoid ‘blindly’ fostering growth acceleration and consider how firms may accelerate along specific avenues as dictated by the needs of society at a given point in time and in ways which are both sustainable (producing less waste and/or long-term effects) and socially responsible (fair wages and meaningful jobs).

For top-managers and entrepreneurs:

• Decision-makers in startups and mature ventures need to understand the conditions and consequences of each acceleration type.
• They may benefit from an integrated view on the drivers of acceleration and use this framework to facilitate organizational sensemaking and sense giving in internal communications.
• Paying attention to the tensions between acceleration types, as well as carefully considering their acceleration sequence may reduce uncertainty and volatility when growing.
• The fact that market concentration is a significant hindrance to firms’ growth acceleration, may encourage organizations to experiment with new competitive areas or ‘blue oceans.’
• Co-location with foreign firms and access to knowledge spillovers within an industry or region appear to generally foster firm growth acceleration and should therefore be taken into consideration when making strategic decisions in prospective scaleups.

Future research may address this interplay in further detail by predicting how various organizational meso and macro factors combine to affect firm growth acceleration across different market conditions. For example, digitalization and platform creation may enable acceleration in sales, though also a deacceleration in employment for smaller firms particularly when operating within non-tech industries.