Mid-sized firms lagging behind in export sales

New research undertaken by GE Capital has shown that the UK’s mid-sized businesses (MSBs) are lagging behind Germany and France when it comes to exporting outside of the EU.

Just 17% of UK MSB revenues come from outside the European Union, which is lower than its two biggest European neighbours.

The ‘mid-market’ typically consists of around 21,000 companies that are more than just an SME but would not be considered a ‘big business’. Despite being a relatively small group of businesses, they account for 33% of UK GDP and more than one in every three jobs in the UK.

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Speaking at this week’s ‘Leading from the Middle’ summit, Katja Hall, chief policy director of the Confederation of British Industry (CBI), said the findings made compelling reading.

“Only 15% of UK MSBs have grown their revenues from China in the last five years,” she said. “That is compared with 25% in France and 23% in Germany and Italy. This must change.”

Hall said that the research highlighted the “disparities” between the scale of the challenge and also the size of the opportunity.

“The UK mid-market has the second-highest proportion of ‘gazelles’ – or ‘growth champions’ – when compared to the mid-market in Germany, France and Italy, but also the second-highest proportion of flat and declining companies,” she said. “But what GE Capital’s research also found was that UK MSBs’ principle focus is simply staying in business. Survival rather than growth is the defining strategy of 26% of the companies surveyed, more than in France and Italy and almost double that of German companies.”

The CBI believes that if the gap narrows so that there are more ‘gazelles’, as well as more slow-growing firms reaching a steady expansion rate rather than stagnating, MSBs could add £20 billion to the economy by 2020. “But we won’t achieve it if we carry on as we are,” warned Hall. “The neglected middle must become the nurtured middle.”

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