It has long been evident that mid size businesses (MSBs) are the unsung heroes of the UK economy. In recent years, the Government has begun to redress the balance between small and large enterprises, but materially MSBs continue to fall under its radar. This creates a sizeable opportunity cost if you consider the number, success and potential growth of these organisations.
It’s estimated there are currently 35,000 MSBs in the UK, set to make an economic contribution of £400bn by 2020. If we can remove some of the barriers for growth then standby for an extra £50bn contribution that could be realised.
One thing is clear from the statistics: MSBs are overachievers. Despite comprising less than 1% of businesses within the UK economy, they contribute a staggering 22% to its revenue.
In fact, MSBs are seen to consistently outperform large businesses, in productivity, job growth and R&D investment, while also being major tax contributors; therefore fuelling economic growth at both the national and local level.
While their overall contribution to the economy is undoubtedly impressive, job creation stands out. With an estimated employee base of 4.3M people in the UK, with 737,000 more jobs predicted by 2020, MSBs also continue to increase salaries at a rate outpacing the overall market.
Furthermore, research shows that MSBs are particularly effective at tackling unemployment. This is particularly notable in regions like the North East, where unemployment has persisted since the economic crisis of 2008, and Yorkshire, where MSB driven job creation has helped to manage employment levels as public sector jobs decline.
By their very nature, MSBs have a way to go before reaching the heights of large businesses. But yet, progress for many is slowing, even where opportunity exists.
This is particularly visible within export, where only 29% of UK MSBs have current international operations, and only one in five plan to expand in this direction, lagging behind the majority of their eurozone counterparts.
Research shows that perceived barriers to growth range from regulatory burden, access to funding, hiring and retaining skilled employees, to navigation of export complexities.
Also challenging is the introduction of governance and process, without compromising the agility and innovation giving MSBs the edge over their larger competitors.
From collectively building the identity and voice of the MSB sector, to sharing best practice, from strengthening of supplier and customer relationships, to investment into board development – MSB leaders must continue to ensure they are optimally positioned to take advantage of these changes; therefore realising the exceptional growth of which they are capable.