Backing the nation’s mid-sized growth champions

IN: Business news

Mid-sized firms have the potential to significantly accelerate the UK’s economic growth, but is there enough support available for this dynamic group of British businesses?

undefinedAccording to the Confederation of British Industry (CBI), while Medium Sized Businesses (MSBs), classed as those with a turnover of between £10 and £100 million, account for less than two per cent of UK firms, they contribute 23 per cent of revenue and 16 per cent of jobs.

What’s more, Deloitte also reports the contribution of the 50 fastest-growing MSBs is increasing rapidly, boosting headcounts by 54 per cent in the past four years and expanding 73 times faster than the average UK company. Despite this impressive performance, experts suggest MSBs could have an even more prominent role to play within the UK economy if given the correct conditions for success in overseas markets. “Mid-sized businesses have the potential to be economic powerhouses for the UK economy, creating jobs and growth for all regions of the UK,” confirms UK trade and investment minister Lord Livingston.

However, business secretary Vince Cable has pointed to a historic lack of options for medium-sized firms looking to raise finance. Commenting at the government’s Business is Great launch back in November, Cable reflected: "We know there is a genuine problem with finance for small companies, but the real difficulty is with the British 'Mittelstand'. In Germany they have ready access to all types of sources of funding but in the UK they don't. It's very difficult because they're not big enough for the stock market and they've run out of family and friends; people who will fund a start-up." Livingston also concedes that export strategies must place a greater emphasis on supporting this thriving group of firms, which the CBI has labelled the, ‘forgotten army’. “

What we've not done so well is medium-sized companies with revenues of between £20m and £200m,” states Livingston, continuing, “Their success is dependent on expanding beyond domestic markets so we will be making personal contact with all mid-sized businesses to find out what we can do to help them go up a gear and compete with the best the rest of the world has to offer.”

Andrew Graham, behind successful Blackburn-based wallpaper manufacturer Graham and Brown, agrees with this strategy, telling the Lancashire Telegraph, “If we want to avoid becoming a bit-part player we need to back the winners who have the best chance of creating more jobs and growth. We have to look at which businesses have the most potential to grow.”

In fact, the CBI estimates that MSBs could deliver an additional £20 to £50 billion to the UK economy through capitalising on international trade, though currently only 17 per cent of these firms export, compared to 25 per cent in Germany. Attempting to change this situation, Livingston has promised to personally write to 8,900 UK MSBs offering tailored trade advice from UKTI, and a government scheme has been set up to pair postgraduate language students with businesses to help them overcome language and cultural trade barriers. With this renewed support drive in place, Aldermore hopes to see Britain’s MSBs achieving their growth goals and the UK enhancing its competitive standing on the international stage.

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