Medium-sized businesses are the UK’s “forgotten army”, too long overlooked by government but with the potential to inject between £20bn and £50bn into the economy by 2020, according to the CBI.
Firms with a turnover of between £10m and £100m represent less than 1% of businesses but generate 22% of economic revenue and 16% of all jobs. The CBI has published a new report, ‘Future Champions: unlocking growth in the UK’s medium-sized businesses’, which uses new analysis conducted with the help of McKinsey & Company.
The CBI is calling for a broader range of finance to be made available to medium-sized businesses (MSBs). With banks’ lending constrained, these firms can no longer rely solely on bank lending for long-term growth capital to invest in their companies. Business owners and managers will be crucial to unlocking MSBs’ true potential, and the CBI makes a series of recommendations for building their capabilities and inspiring them to strive for even greater growth.
John Cridland, CBI director-general, said: “Medium-sized businesses are truly a forgotten army, and now is the time to unlock their potential.
“We should be championing, nurturing and encouraging our medium-sized firms so that more of them grow and create jobs. For too long these companies, which could inject tens of billions of pounds into our economy, have fallen under the radar of policymakers.
“I want the UK to have its own version of the German “Mittelstand” – a backbone of medium-sized firms which export, innovate and generate growth. These future champions would help the UK weather unexpected economic shocks, and act as a new engine for growth.” Cridland continued:
“To achieve extra growth, medium-sized firms must have access to new kinds of finance. This means opening UK bond markets to medium-sized businesses, encouraging use of venture capital, and making it easier for large companies to invest in medium ones, possibly in their supply chains.”