HSBC reveals mid-market firms could gain significant growth from overseas businesses

HSBC has released a report today (October 3) revealing that mid-market enterprises could take advantage of huge opportunities from international trade.

In addition, exports currently account for only 17 per cent of UK MMEs’ revenues. Although, the total value of turnover accrued through these export sales is almost $180bn (around £140bn).

HSBC, in conjunction with Oxford Economics, explored the views of 1,400 MME senior executives in 14 countries in addition to in-depth economic analysis.

Jane Galvin, head of corporate banking, HSBC UK said: “MME firms are making a huge and growing contribution to the UK economy, with our estimates showing the number of MMEs in this country increased by 5% per cent over two years.

“These MMEs have the potential to deliver even greater growth if they considered going to new markets. Many of the concerns they have, could in fact be addressed with an international strategy – whether that’s overcoming local economic uncertainty or capitalising on new skills and expertise.

“In an environment of lower growth, we must help these companies reap the benefits of international commerce, and just as importantly work to raise their profile as major economic contributors, and potentially influential government stakeholders”.

The findings reveal that MME leaders in the UK are significantly less confident in the local economy than average (50 per cent vs. 69 per cent) and view Brexit as a far greater threat to growth than average (50 per cent vs. 6 per cent).

Yet despite this, these leaders are focused upon increasing revenue from current markets as a strategy for growth rather than seeking out sales opportunities in new geographies.

Furthermore, there is good news for policymakers for who decreasing the skills gap has been a priority in recent years in that UK MME leaders see much less of a threat from skill shortages than average (40 per cent vs. 56 per cent).

MMEs are said to be the backbone of the global economy, making significant contribution to growth and employment. It is estimated that the 433k MME companies across 14 countries covered by this study directly employed 208m people – equivalent to the population of Brazil.

It is estimated that in just two years the direct contribution of MMEs to global GDP increased by 9 per cent and the number of jobs they support grew by 3 per cent.

Further economic analysis predicts that if mid-market enterprises (MMEs) boosted their export-based revenues by just 1 per cent, they would increase their economic impact by $12.5bn (around £9bn) across 14 countries.

Half of all MMEs are estimated to be in China; a further quarter in India but per capita they have a larger profile in countries like Singapore, the UAE, Canada and Germany.

In the UK MMEs are mostly likely to operate in the business services sector, which account for almost a third of mid-market activity in terms of economic value and employment, followed by manufacturing and financial services.

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