Boost in export and skills could add Â£50bn to mid-sized sector
Medium-sized businesses could contribute £50bn more per year to the UK economy if more investment is ploughed into exports and skills between 2015 and 2020, a new study by Grant Thornton has found.
Figures from the firm's Agents of Growth report found that, if growth trends continue, medium-sized businesses could contribute up to £413bn to the UK economy each year by 2020, compared to £294bn this year.
In 2015, medium-sized businesses are expecting a 6.7 per cent growth in turnover, higher than the sectors larger and smaller counterparts. The study also found that 4.5 per cent are looking to boost exports and 2.8 per cent will invest in their business.
Dave Munton, regional managing partner at Grant Thornton in Birmingham, said: "Both locally and nationally, medium-sized businesses have done fantastically well through the crisis, and continue to outperform the market across many important metrics, supporting our view that dynamic MSBs are critical to driving the UK's economic growth.
"Working with many companies, we see first-hand the entrepreneurial spirit and drive that are cementing this segment as a key contributor to economic success."
In the West Midlands, companies in the sector currently contribute an estimated £46.1bn, in line with figures reported in 2013, despite employment levels increasing by 2.6 per cent.
But the report revealed that a quarters of companies surveyed said a lack of skilled talent was a "major constraint" to growth, as well as regulation red tape (20 per cent) and economic uncertainty (18 per cent).
Grant Thornton said these factors could impact the growth of the sector and its contribution to the economy by £50bn between 2015 and 2020.
Munton added: "Whilst there is no doubt that confidence has returned to most sectors across the West Midlands, the dip in productivity again highlights that more needs to be done to enhance our competitive position and drive growth, particularly looking at skills, exports and incentivising businesses to invest and innovate.
"Our forecasts show there is a wealth of potential yet to be unlocked from medium-sized businesses, but they need to be fully acknowledged and enabled by the government to realise this potential for growth. From our on-going discussions with Government and policy makers we know that this work is beginning to gather pace, and would call for even more focus and support for this engine room of the economy."