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CBI hails medium-sized businesses for role in recovery

Research by the CBI shows that medium-sized businesses (MSBs) are the unsung heroes of the economy, having done much of the heavy lifting during the recovery, significantly contributing to jobs and growth across the North West and the UK.

The CBI has also launched #MSBMonday to boost recognition of these companies.

The economic contribution to the North West of MSBs - firms employing 50 to 499 people, equivalent to a turnover of between £10m and £100m - increased by over £4bn between March 2010 and March 2013.

They now contribute £23bn GVA (Gross Value Added) to the economy on the back of strong revenue growth of 26% during the last three years.

The North West has the highest number of MSBs outside of London and the South East. These 4,000 firms employ more than 490,000 people locally, up 2.8% since March 2010.

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

MSBs are already an integral part of the North West economy. Despite only representing 1.9% of firms, they employ 19.5% of the workforce and create a huge 28% of private sector revenue. CBI research shows that, with the right support, these firms could be worth an additional £20bn to the economy by 2020.

Damian Waters, CBI North West Director, said: “Medium-sized business are vital to the North West - they contribute a huge £23bn to the regional economy and employ 490,000 people locally.

“These businesses are optimistic about the economy and, with a small helping hand from the government, their future growth potential could be even greater.

“With better access to a range of growth finance options, improved training, research support and help to break into new exports markets, they could be worth an extra £20bn to the UK economy by 2020.”

The CBI’s recommendations include:

• The Treasury and the Department for Business must work together to develop SME 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 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 & Industry 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.

Firms wanting to take advantage of this service should tweet about whatever news they want to announce, using the hashtag, and the CBI will retweet to help spread the word.

The CBI cite EA Technology group as a prime example of a medium-sized business making a significant impact on the region’s economy.

The firm works around the world with the power industry to improve the reliability and reduce the costs of running power distribution networks. It currently employs over 240 people in the North West and globally.

Services it provides 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.

Despite this international outlook, the company is also firmly rooted in the local community.

Group chief executive Robert Davis said: “Our company sees itself not just as a business, but as playing an active role in the local economy, and we work closely with our LEP, the University of Chester and many local charities. Medium-sized businesses can be a pillar of the community, and much more than just an employer.”

This was posted in Bdaily's Members' News section by Simon Malia .