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Medium-sized business have carried economic recovery, research finds

New CBI research published today shows that medium-sized businesses (MSBs) have done much of the heavy lifting during the recovery, significantly contributing to jobs and growth across the UK.

MSBs aren’t household names but employ between 50-499 people and have a turnover of &pound10-100 million.

Despite only accounting for 1.8% of the UK private sector, MSBs have been responsible for creating a huge number of jobs between March 2010 and March 2013. They have created 185,000 jobs, a 4.1% increase, compared with 1.9% by large companies and 2.8% by small firms. They now employ 4.7 million people across the UK, 16% of our total workforce.

In the same period their total turnover increased by more than double that of other firms: 7%, compared with 3.2% for large companies and 2.9% overall. They generate 23% of total private sector revenue and their contribution to the UK economy is estimated to be over &pound300 billion GVA (gross value added).

This positive picture is reflected across many of the UK’s regions. In the North East MSBs represent just 2.2% of businesses but generate 48% of private sector revenue in the East Midlands they represent 1.9% of businesses but generate 20% of revenue and have been responsible for creating 15,000 more jobs since 2010, offsetting a third of public sector job losses locally.

Looking ahead, the majority (82%) of MSBs expect the UK economy to improve over the next 12 months and 88% expect their own business situation to improve.

John Cridland, CBI director-general, said, “The UK’s medium-sized businesses are the unsung heroes of our economy and have done much of the heavy lifting to drive the UK recovery.

“Despite making up less than 2 per cent of the private sector, they now employ 185,000 more people than in 2010 and contribute more than &pound300 billion to the economy.

“This hugely positive picture is reflected up and down the country where MSBs are major local employers, in many cases helping to offset public sector job losses during the downturn. 

“These firms are optimistic and want to make the most of the recovery. With the right help from the Government their future growth potential could be even greater.

“With better access to a range of growth finance options, improved training and research support, and help to break into new exports markets - these firms could be worth an extra &pound20 billion to our economy by 2020.” 

The CBI’s recommendations to boost MSBs include:

•             The Treasury and the Department for Business must work together to develop MSB access to debt capital markets, through private placements, retail bonds and loan securities

•             The Business Bank should bring all Government finance support schemes under one roof and scrap the ones that simply are not working

•             The Department for Business should take forward the Witty Review recommendation to establish a single point of business access to university resources, to help training, skills and research

•             UK Trade & Investment and UK Export Finance must do more to promote their services to firms at a local level, as most aren’t even aware that they exist

•             The CBI is calling on local government and policy makers to do more to recognise and support medium-sized businesses – their local champions.

Today is the first #MSBMonday

To help MSBs get the recognition they deserve, the CBI is launching the #MSBMonday hashtag on Twitter.

If your firm – or a business you know – has something to shout about, from taking on new staff, opening new premises or breaking into new markets, why not tweet about it using the hashtag and we’ll retweet to help spread the word.

A selection of medium-sized business case studies can be found below.

Mechatherm International was established in 1973, supplying furnaces, casting machines and ancillary mechanical handling gear to the aluminium industry

Turnover for 2013 was &pound16.5m, and orders have already been taken for 2014 for more than twice that. With the decline of the aluminium industry in the UK, exports have become the core of Mechatherm’s business. Since 1990, exports have on average made up 85% of turnover. Mechaterm’s export markets include Indonesia, India, Sweden, Bahrain, Dubai, Russia and Venezuela the company has recently won major orders in Germany and the USA.

Mechatherm is not just an international business, but also a local one. The company has forged close links with local schools, taking on regular work experience students, as well as Birmingham University through the Knowledge Transfer Partnership.

Founded in 1997, Amino Communications is a world leading entertainment systems provider – bringing new products and solutions in Internet Protocol Television to a global market. Based in Cambridge with 100 employees, Amino has sold almost five million devices to over 850 customers in 85 countries. Amino’s award-winning solutions are deployed by major operators and service providers worldwide to deliver broadcast and Internet content over broadband networks.

Almost 100% export-driven, Amino has earned a worldwide reputation for quality software and hardware innovation and works with a wide range of industry partners, including Intel. Drawing on the region’s strong reputation for technology innovation and education, Amino has a strong focus on R&D and continues to collaborate with local universities and business schools.

EA Technology Group works around the world with the power industry to improve the reliability and reduce the costs of running power distribution networks. They currently employ over 240 people in the North West and globally. Services they provide range from technical support to find and repair network faults, to providing the hardware to monitor asset network condition, and consultancy services to support network replacement and modernisation, such as the integration of low carbon technologies.

EA Technology is a high growth firm, achieving more than 15% annual growth for the past ten years. This growth has been driven by a focus on innovation and internationalisation. 14% of revenues are invested in developing new products services and technologies to keep EA Technology at the forefront of the sector. At the same time, the company has looked overseas to expand. From just 6% overseas sales ten years ago, today 45% of revenue comes from international markets, and EA Technology has operations across the globe, from the USA to China, and the Middle East to Australia.



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