Middle-sized Scottish firms are “undervalued and overlooked”, according to new research from professional service firm BDO.
The findings, published today, show mid-market companies are stuck in what BDO calls a “policy and profile black hole” because they are too large to benefit from policies tailored towards small business but too small to win the attention enjoyed by the largest corporates.
While they account for less than 1% of the companies registered in Scotland, they also employ one-in-five of the country’s workers and have a revenue total of around £66 billion.
BDO believes its recommendations, which include a temporary reduction in employers’ national insurance contributions for manufacturers, could help create thousands more posts and add up to £1.3bn to the mid-sized companies’ combined turnover figure.
Its view is based on an analysis of more than 2,000 Scottish firms with turnovers of between £10 million and £300m.
Partner and head of BDO in Scotland Martin Gill said the sector has “the potential to deliver even more for our regional economy” with the right support.
“The Government has done a good job at promoting the general needs of business, but more can be done to help mid-sized firms specifically,” he said.
“As we begin the run-in to a general election, this is a good opportunity to reflect on the needs of this section of our economy, as all political parties consider what they can do to drive economic growth.”
BDO’s Mid-Market Manifesto features policy recommendations which address areas including retail, manufacturing and education and skills alongside procurement, tax and exporting.
It said changes to NI contributions would encourage exporting, while moves to award public contracts on the basis of employment and training benefits in the supply chain could increase UK gross domestic product by £1bn.
“Our policy recommendations are rooted in reality and quantify just how beneficial to businesses, job creation, and the wider economy they could be,” Mr Gill said. “Straightforward changes even to policy around procurement could make a material difference.
“There is now a unique opportunity to tilt the balance in the direction of growth for the unsung heroes of our economy to ensure we drive value for Scotland.”
Britain’s mid-market companies account for just 1% of all UK firms but generate a third of private-sector revenue, totalling more than £1 trillion per year, and employ more than 6.2 million people equivalent to around one-in-four private-sector jobs.