Help medium-sized businesses to grow and the economy will follow

Help medium-sized businesses to grow, and the economy will grow, claims the CBI.

Medium-sized businesses have been too long overlooked by the Government, according to the CBI, but this 'forgotten army' has the potential to inject between £20 billion and £50 billion into the UK economy by 2020.

Figures revealed in the CBI's report, 'Future Champions: unlocking growth in the UK's medium-sized businesses', show that medium-sized businesses currently represent less than one per cent of organisations in the UK, but generate 22 per cent of economic revenue, and 16 per cent of all jobs.

The CBI believes that medium-sized businesses could grow further if they had access to a broader range of finance. Commenting, John Cridland, CBI Director-General, said:

"Medium-sized businesses are truly a forgotten army, and now is the time to unlock their potential.

"We should be championing, nurturing and encouraging our medium-sized firms so that more of them grow and create jobs. For too long these companies, which could inject tens of billions of pounds into our economy, have fallen under the radar of policymakers.

"To achieve extra growth, medium-sized firms must have access to new kinds of finance. This means opening UK bond markets to medium-sized businesses, encouraging use of venture capital, and making it easier for large companies to invest in medium ones, possibly in their supply chains."

The CBI believes that if more medium-sized businesses were able to issue bonds and use new products to attract new investors, the Government could kick-start demand through credit easing. Other financing options suggested by the CBI include access to more capital release equity, while the group also wants Entrepeneurs' Relief to be restructured to incentivise longer-term investments, as well as the R&D tax credit to be widened. 

Meanwhile, to encourage medium-sized businesses to export their products and services, UK Trade & Investment (UKTI), should proactively target medium-sized firms, offering advice and insight into international competition, the CBI adds.