NatWest boss PAUL THWAITE on the £35 billion secret weapon to save the UK economy
There is an overlooked powerhouse of 13,000 businesses in Britain that could hold the key to driving our future productivity and growth.
Mid-market companies, which employ between 100 and 2,500 people, have consistently grown faster than the economy as a whole over the past decade.
They make up just 0.5 percent of total UK businesses, but far punch above their weight; they account for over a quarter of national turnover and over seven million jobs across the country.
Yet these companies do not get the recognition they deserve. They operate in a twilight zone between exciting start-ups and large corporates, with an equally large platform.
They are packed with potential to increase national prosperity, but are too often overlooked by policymakers and financial institutions. But make no mistake: these companies have transformational power.
Our research shows that this group could add £35 billion to the economy over the next five years and create more high-quality jobs. The ripple effect would be felt across Britain, with 70 percent of this growth taking place outside London and the South East.
Overlooked: Mid-market companies ‘are too often overlooked by policymakers and financial institutions’, says Paul Thwaite, CEO of NatWest Group
A third of these companies already export their goods and services abroad, compared to just 13 percent of the smallest companies.
Take, for example, Bristol-based Open Bionics, which I visited a few weeks ago. The company is developing 3D-printed custom bionic arms for amputees, including Disney designs for children aged five and up in the style of their favorite superheroes.
With plans to open six more clinics across the US, Open Bionics is not only improving lives with life-changing medical equipment, but also enhancing Britain’s reputation as a world leader in innovation.
This is exactly the kind of company that deserves support to further scale up its activities.
But these mid-sized companies need the right support. Despite their potential, they face specific challenges: they often struggle to access the skills, infrastructure and investments they need to grow.
Regional support networks can be fragmented. For example, it may take too long to move products and people over relatively short distances, and delays in planning decisions can dampen expansion ambitions.
The growth rate itself can be a problem for mid-sized companies. That sounds paradoxical, but if the complexity of their business grows faster than their capacity, it can be a headache.
Stretched leaders tell us they wear many hats. As their business grows, they face increasing administrative burdens and new reporting requirements.
As they expand international trade, they may have to deal with legislation in multiple jurisdictions.
There is a lack of robust data on mid-sized companies, which prevents them from having a strong voice in government. Therefore, when policy or legislation is produced, it does not reflect their unique needs.
As a first step in tackling these challenges, NatWest, with the support of the Department for Business and Trade, will establish a new UK Mid-Market Council, with members representing primary sectors from across the business community.
This coalition of public and private sector leaders will amplify the collective voice of midsize businesses, break down barriers and champion their growth.
We support this initiative with the introduction of a growth tracker for the mid-market, in collaboration with data company S&P Global.
From January, this monthly report will provide vital data on the sentiment and growth prospects of this critical group, highlighting where they are flourishing, how new challenges are impacting them and monitoring progress to identify where additional targeted support is needed.
This foundational work will provide the insight and analysis that will improve policymaking. If we want to unlock the potential of medium-sized businesses, bold and sustained action is needed.
Collaboration between the public and private sectors is vital to helping these businesses achieve new levels of success – benefiting our communities, our industries and the future of the UK economy.
What’s good for medium-sized businesses is good for Britain. By investing in their success, we invest in a stronger, more inclusive economic future for us all.
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