I am delighted to announce the The 2019 Mid Size Business Leaders Report, was released today. It answers the long-standing question, ‘What is an mid size business?’ and reveals an unprecedented range of intelligence about the priorities, strengths and challenges facing this vital part our economy.
We’ve know mid size businesses (MSBs) make a disproportionate financial contribution to the broader UK economy.
People are often surprised to learn MSBs make up only 1.5% of UK businesses yet contribute 1/3 of national turnover and a staggering 22% of tax receipts.
The study shows despite their contribution, MSBs continue to be unrecognised and underserved: Too big to benefit from incentives aimed at small business and too small to grab talent and attention like FTSE companies, MSBs fall into a regulatory, policy and profile abyss.
Our ground breaking research reveals MSBs’ lack of clear identity, combined with Brexit uncertainty, a skills and talent shortage and technology challenges have significantly impacted their growth ambition - leading to cautious innovation, strategies to consolidate and unrealised productivity gains.
These findings put at risk MSBs contribution to the UK economy and their potential contribution to our national economic ambitions and the country’s global competitiveness.
Most research talks to the opportunities and rewards if we were to better fuel MSBs. None talk of the impact of MSBs contracting or being inert. If this was to happen – the repercussions would be seismic, felt economically and socially.
And this impact will be felt most by regional communities, with 75% of MSBs located outside of London. The North for example rely heavily on their MSBs who make up 19.3% of all MSBs nationally.
For too long now the ecosystem has failed to act and a range of implications are looming. There will be a tipping point and these tremendous value creators will stop performing as they are.
The context of Brexit, changing market needs and technology may just be the perfect storm.
To avoid this, MSBs must evolve, with the help of Government and Industry, to ensure they play a role in maintaining current contributions AND realising the economic ambitions enshrined within the national and local industrial strategies and other important manifestos like the Greater Manchester Independent Prosperity Review.
MSB evolution starts with clear recognition of their size, strengths and unique challenges.
The MSBLeaders Study, for the first time, provides an evidence-based classification for MSBs giving them a clear identity, as well as a framework for government and industry to tailor policy, regulation, services and resources.
The importance of providing MSBs with a classification and an identification of their challenges and opportunities – should not be underestimated in terms of the value it provides them in searching for relevant and effective solutions and support.
Results also identified MSB unique strengths and challenges that must be addressed in order to return MSB confidence, restore their capability. These included:
If MSBs are to maintain their current economic contribution as well as realise national and regional industrial strategy ambitions, particularly in the context of dynamic market forces and a talent shortage, they must evolve by leveraging their defining characteristics and resolving weaknesses.
This starts with Government and industry recognising MSBs as a distinct category and the provision of tailored policy, regulation, services and support – it is a binary requirement for success and long overdue.
MSBs themselves must lead this evolution with a focus on leadership diversity, emerging technology fluency, technology for productivity gains, innovation and contemporary workforce acquisition and retention.
While our research yields an industry first in offering a classification and has provided explicit recommendations, we also simply confirm what many advocates have been saying for some time – MSBs are critical to the economy and we must provide relevant and targeted support to maintain their contribution and elevate it.
We must ask ourselves why existing voices and efforts, with far greater funds and teams than ours, haven’t worked?
We believe it is because we are not acting as a collective.
So on 9 and 10 July 2019 we will be hosting the 2019 MSBLeaders Evidence to Action Summit. Representatives from Government, industry, academia and MSB leaders will be invited to come together to prioritise and advance recommendations.
Finally, I would like to say a special thank you to all the directors and leaders of MSBs who supported the study, giving up their precious time. Credit also must go to the project team and academics who tackled this immense undertaking with limited support, often on top of their day jobs.
On their behalf, we hope you appreciate the quality of the insights and the specificity of the recommendations.
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