In the United Kingdom, a significant yet often overlooked segment of the economy is emerging as a potential driver of future productivity and growth. This sector, known as mid-market firms, comprises approximately 13,000 businesses that employ between 100 and 2,500 individuals. Over the past decade, these companies have demonstrated robust growth, consistently outpacing the overall economy, according to reports from the Daily Mail.
Despite their remarkable contribution, mid-market firms account for only 0.5 per cent of total companies in the UK. However, they are responsible for generating more than a quarter of the nation's turnover and providing over seven million jobs. This disparity between their economic impact and public recognition is striking, as they navigate a position that lies between the dynamic start-up environment and larger, more established corporations.
Research indicates that these mid-market businesses possess the potential to contribute an additional £35 billion to the economy within the next five years, along with the creation of high-quality jobs. Interestingly, 70 per cent of this anticipated growth is expected to unfold outside of London and the South East, showcasing the broad geographic opportunities present.
Businesses like Open Bionics, based in Bristol, exemplify the potential held by mid-market firms. The company is known for its innovative production of 3D printed bespoke bionic arms for amputees, including designs inspired by popular Disney characters for children. The firm is also looking to expand its footprint in the US, set to open six new clinics. Their efforts not only enhance lives but also bolster the UK’s reputation in global innovation.
However, despite these promising prospects, mid-market firms face several challenges. A primary concern is their struggle to secure the necessary skills, investment, and infrastructure for further growth. Many experience issues related to regional support networks and inefficiencies, such as delays in logistics and complicated planning processes. The potential paradox of rapid growth presents another problem, as companies may find that the complexity of operations outpaces their capacity to manage them effectively.
Leaders within these companies often report a feeling of being stretched too thin, juggling multiple roles while confronting increasing regulatory demands. The lack of substantial data on these mid-market firms further complicates their situation, leaving them without a strong advocacy voice in government, which in turn leads to policies that do not adequately address their unique requirements.
In response to these challenges, NatWest, alongside the Department of Business and Trade, is launching a new UK Mid-Market Council. This initiative will bring together leaders from both public and private sectors to strengthen the voice of mid-market businesses, dismantling barriers and promoting their growth. Complementing this effort will be the Mid-Market Growth Tracker, developed with S&P Global. Beginning in January, this monthly report will gauge sentiment and growth prospects, revealing trends and challenges faced by these crucial companies.
The establishment of this council is anticipated to enhance understanding of mid-market challenges and provide the empirical data necessary for informed policymaking. Collaborative efforts between public and private sectors are deemed essential in unlocking the full potential of mid-market businesses, ultimately contributing to stronger communities and a more resilient UK economy.
Source: Noah Wire Services