a REPORT highlighting the plight of medium-sized businesses has been launched in Leeds.
The CBI study says the “forgotten army of MSBs” could play a vital role in boosting the economy.
But it highlights that neglect from government and a lack of will in some MSBs has stifled their potential.
The report - Future Champions: Unlocking Growth in the UK’s Medium-Sized Businesses - says: “The UK faces a clear choice. Settling for the status quo would mean that a large number of MSBs in the UK would remain virtually static, with either declining, or very marginal growth. The alternative means championing MSBs and developing a plan for growth so that they can thrive, and make a dramatic impact on the growth of the UK economy.”
The report says that medium-sized business – usually regarded as those with a turnover of £10-500m – need more backing from government and the self belief to push forward by recruiting top talent and being innovative.
MSBs constitute about one per cent of the country’s businesses, says the report, but employ 16 per cent of workers and provide 22 per cent of revenue.
The report says: “Mid-sized businesses are not widely understood by government nor indeed by other bodies that play a part in establishing the business environment.
Policy is often focused on very large firms, which collectively account for the highest proportion of revenue, or small firms, which are collectively the UK’s biggest employers.
This leaves the companies in-between isolated.”
Tom Thackray, co-author of the report, told the CBI breakfast seminar where it was launched that in Germany mittelstand firms - which equate to MSBs - are well supported and are seen as the country’s economic backbone. Many are family-owned.
Mr Thackray said that MSBs could generate £20-50bn for the UK by 2020 if they were encouraged and developed.
He suggested that more MSBs could be placed on the Prime Minister’s Business Advisory Council and take part in trade delegations, and that government could offer initiatives to boost MSBs. He also said there could be better ways of financing the companies.
Mr Thackray said: “We need to look for long-term and short-term measures that will improve the growth rate of the economy. MSBs could be the sector that drives this.”