Unleashing the potentialof mid-sized businesses26 November 2012Tera AllasDeputy Head – Government Economic ServiceDirector...
2Unleashing the potential of mid-sizedbusinesses: today’s discussion• Mid-sized businesses are an important part of the UK...
GE CapitalBISCBI3The definitions of “mid-sized” vary butrefer broadly to turnover of £25-£500mDefinitions of mid-sized bus...
4Mid-sized firms contribute around a fifth ofemployment and turnover in the UK0.521.2 19.70%10%20%30%40%50%60%70%80%90%100...
5The number of mid-sized businesses hasgrown rapidly since 2005No. of private-sector registered firms, by size category808...
6Innovation is a key driver of growth formid-sized businesses in the UK% of revenue derived from innovation by company siz...
7Within a mixed picture, some mid-sizedbusinesses achieve very high growthSource: Growth review: Mid-sized businesses evid...
8Unleashing the potential of mid-sizedbusinesses: today’s discussion• Mid-sized businesses are an important part of the UK...
9Relative to comparator countries, the UKmid-sized business sector is under-weightSource: Mid-sized Businesses in Finland,...
10A number reasons may be responsible forthe relative “under-performance”Drivers of mid-sized business (MSB) sector contri...
11UK mid-sized firms’ productivity isconsiderably lower than other countriesSource: Mid-sized Businesses in Finland, Franc...
12UK mid-sized businesses’ productivity isrelatively poor in all sectorsSource: Mid-sized Businesses in Finland, France, G...
13Only 26% of UK mid-sized businessesexport more than 50% of their turnoverSource: The Financial Times, 23 October 2012; B...
14UK mid-sized companies employ fewergraduates than those in other countries% of managers in mid-sized firms with a degree...
15Unleashing the potential of mid-sizedbusinesses: today’s discussion• Mid-sized businesses are an important part of the U...
16-1.0-0.50.00.51.01.52.02.53.02011 2012 2013 2014PercentagepointsPrivate consumption Business investment Other private in...
17Mid-sized businesses are particularlyimportant in our key export sectorsSource: Growth review: Mid-sized businesses evid...
18Growth of existing mid-sized businesseswould contribute to regional rebalancingSource:Futurechampions:Unlockinggrowthint...
195.2%1.4%8.3%3.2%0%2%4%6%8%10%12%14%16%Innovation activefirmsNot innovationactive firmsOther graduatesScience graduatesEm...
20Unleashing the potential of mid-sizedbusinesses: today’s discussion• Mid-sized businesses are an important part of the U...
Support investment and exportsCompetitive tax systemThe Plan for Growth sets out thegovernment’s strategy under 4 ambition...
22A number of initiatives are driving oursupport to mid-sized businessesSpring 2011 Autumn 2011 Spring 2012 Autumn 2012Pla...
23Good progress is being made on growthmeasures and commitmentsStatus of Plan for GrowthPhase 1 and 2 deliverables100% = 2...
24These and other actions can boost mid-sized businesses’ contribution further95%31%20%10%15%15%9%13%14%18%41%51%63%0%20%4...
Unleashing the potentialof mid-sized businesses26 November 2012Tera AllasDeputy Head – Government Economic ServiceDirector...
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Fst mid sized businesses presentation tera allas 26 november 2012

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  • European Commission: 50-250 employees and £8-£40m turnover CBI: Focus on 50-500 employees and £10-100m turnover BIS: £25-£500m turnover GE Capital: £15-£800m turnover NIESR research for BIS: £25-500m turnover
  • In 2011/12, the main initiative to identify and drive growth was the HMT/BIS jointly led Growth Review, which reported at Autumn Statement. The Plan for Growth: Overarching Ambitions To create the most competitive tax system in the G20 To make the UK one of the best places in Europe to start, finance and grow a business To encourage investment and exports as a route to a more balanced economy; and To create a more educated workforce that is the most flexible in Europe Strong, sustainable and balanced growth that is more evenly shared
  • Fst mid sized businesses presentation tera allas 26 november 2012

    1. 1. Unleashing the potentialof mid-sized businesses26 November 2012Tera AllasDeputy Head – Government Economic ServiceDirector General – Strategy, Analysis and Better Regulation, BIS
    2. 2. 2Unleashing the potential of mid-sizedbusinesses: today’s discussion• Mid-sized businesses are an important part of the UKeconomy, with many attractive characteristics• However, mid-sized businesses face specific challengesthat limit their current potential• Addressing these challenges is fundamental to achievingstrong, sustainable and balanced growth• The government has put in place a number ofprogrammes to help unleash this potential
    3. 3. GE CapitalBISCBI3The definitions of “mid-sized” vary butrefer broadly to turnover of £25-£500mDefinitions of mid-sized businessesNumber of employeesAnnualturnover,£mEuropeanCommissionNote: positioning of the shapesis illustrative, not precise
    4. 4. 4Mid-sized firms contribute around a fifth ofemployment and turnover in the UK0.521.2 19.70%10%20%30%40%50%60%70%80%90%100%# ofbusinessesEmploymentof allbusinessesTurnover ofallbusinessesSmall and largebusinessesMid-sizedbusinessesContribution of mid-sized businesses to all businesses in the UKSource: Growth review: Mid-sized businesses evidence base, Department for Business, Innovation and Skills, November 2011
    5. 5. 5The number of mid-sized businesses hasgrown rapidly since 2005No. of private-sector registered firms, by size category808590951001051101151201251301997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010No.offirms(indexedto1997=100)Small Mid sizedLargeSource: Growth review: Mid-sized businesses evidence base, Department for Business, Innovation and Skills, November 2011MSBs
    6. 6. 6Innovation is a key driver of growth formid-sized businesses in the UK% of revenue derived from innovation by company size 2009Source: Future champions: Unlocking growth in the UK’s medium-sized businesses, CBI, October 2011MSBsMSBs
    7. 7. 7Within a mixed picture, some mid-sizedbusinesses achieve very high growthSource: Growth review: Mid-sized businesses evidence base, Department for Business, Innovation and Skills, November 2011High-growthMSBs
    8. 8. 8Unleashing the potential of mid-sizedbusinesses: today’s discussion• Mid-sized businesses are an important part of the UKeconomy, with many attractive characteristics• However, mid-sized businesses face specific challengesthat limit their current potential• Addressing these challenges is fundamental to achievingstrong, sustainable and balanced growth• The government has put in place a number ofprogrammes to help unleash this potential
    9. 9. 9Relative to comparator countries, the UKmid-sized business sector is under-weightSource: Mid-sized Businesses in Finland, France, Germany, Sweden and the UK – General Statistics, NIESR, December 2011Mid-sized businesses as % of turnover of all businesses32.832.031.530.519.7SwedenFinlandGermanyFranceUK
    10. 10. 10A number reasons may be responsible forthe relative “under-performance”Drivers of mid-sized business (MSB) sector contributionMSBs as % ofall businessturnover*MSBs as % ofall businessemployment*MSB turnoverper employee(productivity)*Average turnoverper employee inspecific sectors*MSB sector mix(relative to allbusinesses)*Number of MSBsas % of numberof all businesses*Average numberof employeesper MSB*MSB specificproductivitydifferences** Compared to other countries“Population”“Size”“Sector mix”“Productivity”
    11. 11. 11UK mid-sized firms’ productivity isconsiderably lower than other countriesSource: Mid-sized Businesses in Finland, France, Germany, Sweden and the UK – General Statistics, NIESR, December 2011Turnover (in €) per employee of mid-sized businesses 2009/10221268290 290301UK Germany France Finland Sweden
    12. 12. 12UK mid-sized businesses’ productivity isrelatively poor in all sectorsSource: Mid-sized Businesses in Finland, France, Germany, Sweden and the UK – General Statistics, NIESR, December 2011Turnover (in €) per employee of mid-sized businesses 2009/10256228206279363293ManufacturingOtherproductionServicesAverage of EUcomparators*UK* Finland, France, Germany, Sweden
    13. 13. 13Only 26% of UK mid-sized businessesexport more than 50% of their turnoverSource: The Financial Times, 23 October 2012; BIS analysis461711917Export more than 75% of theirturnoverExport 50-75% of their turnoverExport 25-50% of their turnoverExport less than 25% of theirturnoverDo not exportMid-sized businesses’ export intensity in the UK% of total mid-sized business population26%
    14. 14. 14UK mid-sized companies employ fewergraduates than those in other countries% of managers in mid-sized firms with a degree 2011Source: Future champions: Unlocking growth in the UK’s medium-sized businesses, CBI, October 2011
    15. 15. 15Unleashing the potential of mid-sizedbusinesses: today’s discussion• Mid-sized businesses are an important part of the UKeconomy, with many attractive characteristics• However, mid-sized businesses face specific challengesthat limit their current potential• Addressing these challenges is fundamental to achievingstrong, sustainable and balanced growth• The government has put in place a number ofprogrammes to help unleash this potential
    16. 16. 16-1.0-0.50.00.51.01.52.02.53.02011 2012 2013 2014PercentagepointsPrivate consumption Business investment Other private investmentGovernment Net tradeGDP Growth Forecasts0.9% 0.7% 2.1% 2.7%Business investment and trade areinstrumental to UK’s economic recoveryOBR* forecast of contributions to GDP growth 2011-2014* The independent Office for Budget ResponsibilityBusinessinvestment
    17. 17. 17Mid-sized businesses are particularlyimportant in our key export sectorsSource: Growth review: Mid-sized businesses evidence base, Department for Business, Innovation and Skills, November 2011; Industrial Strategy: UK SectorAnalysis, Department for Business, Innovation and Skills, September 2012; * UK Exports by Category of Goods and Services, ITC Trade DatabaseIn top 5 export categories* in 2010
    18. 18. 18Growth of existing mid-sized businesseswould contribute to regional rebalancingSource:Futurechampions:UnlockinggrowthintheUK’smedium-sizedbusinesses,CBI,October2011
    19. 19. 195.2%1.4%8.3%3.2%0%2%4%6%8%10%12%14%16%Innovation activefirmsNot innovationactive firmsOther graduatesScience graduatesEmploying graduates is correlated withinnovation and firm growthGraduates as a proportion of all employeesin innovation active and not innovation active firms 2008Source: UK Innovation Survey 200913.5%4.6%
    20. 20. 20Unleashing the potential of mid-sizedbusinesses: today’s discussion• Mid-sized businesses are an important part of the UKeconomy, with many attractive characteristics• However, mid-sized businesses face specific challengesthat limit their current potential• Addressing these challenges is fundamental to achievingstrong, sustainable and balanced growth• The government has put in place a number ofprogrammes to help unleash this potential
    21. 21. Support investment and exportsCompetitive tax systemThe Plan for Growth sets out thegovernment’s strategy under 4 ambitions£££Educated and flexible workforceBest place to start and grow abusiness21
    22. 22. 22A number of initiatives are driving oursupport to mid-sized businessesSpring 2011 Autumn 2011 Spring 2012 Autumn 2012Plan forGrowthMid-sizedbusinessesgrowth reviewIndustrialstrategyLord Heseltinereview andresponseImplementationExamples:• New equity forMSBs: BusinessGrowth Fund• Red TapeChallenge• Presumption infavour - planning• Reducing maincorporation taxrate from 28% in2011 to 22% by2014.Examples:• Export support forMSBs acrossEnglish regions,eg IP advice and‘mini-MBA’• 8 LEPs agreepathfinders toraise MSB profile• Business SchoolTask Force –report 22 NovExamples:• AdvancedManufacturingSupply ChainInitiative: £125m• Breedon review,development of£1bn BusinessBankExamples:• Strengthenedrole forChambers, esp.in exports• Stronger LEPcapability andinfluence
    23. 23. 23Good progress is being made on growthmeasures and commitmentsStatus of Plan for GrowthPhase 1 and 2 deliverables100% = 250+ measures39%61%CompleteProgress MadeExamples of impactApprenticeships• Over 500,000 took up apprenticeships in2011/12, in over 200,000 workplaces• Extending ‘Higher Apprenticeships’• 2/3 better paid on completionInvestment and exports• 23,000 companies supported by UKTI in2011/12; on target for 32,000 in 2012/13• Over £1.5bn High Value Opportunitywins since launch in 2010• Securing over 1,400 investments from 58countries in 2011/12
    24. 24. 24These and other actions can boost mid-sized businesses’ contribution further95%31%20%10%15%15%9%13%14%18%41%51%63%0%20%40%60%80%100%Enterprises Employment Turnover ExportsMicro (0-9 employees) Small (10-49) Medium (50-249) Large (250+)Source: BIS Business Population Estim ates 2011; * DTI Econom ics Paper 18 2006 & OECD Statistics Brief Feb 20114.5m 23.4m £3,100bn £391bn*100%=UK economic statistics by size of firm 2011*Keysource ofgrowthpotential
    25. 25. Unleashing the potentialof mid-sized businesses26 November 2012Tera AllasDeputy Head – Government Economic ServiceDirector General – Strategy, Analysis and Better Regulation, BIS
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