CBI champions Britain’s growing mid-sized firms and £59bn economic contribution

Fairbairn stepped into the director-general role in November as the replacement of John Cridland, who had helmed the CBI since January 2011.

And over the recent years, the British government and large organisations have been very keen to push startups and new businesses, providing funding, mentoring and so on.

For example, Real Business spoke to PayPal’s global director of startups, accelerators and VCs, Corrado Tomassoni, in November ahead of the company launching its third Start Tank incubator in 2016.

The second cycle of the programme saw the graduation of six new companies in October, all of which achieved growth and support across the six-month period.

Tomassoni said: “PayPal and Braintree have been startups and we’re keen to look at the ecosystem locally in the UK and Europe. We want to help startups based on the possibility for us to give value to the businesses to develop more and create business opportunities.”

With this startup trend in mind, Fairbairn used her first keynote speech in the top job as an opportunity to praised mid-sized businesses (MSBs) in the scale-up process and the £59bn that the sector contributed to Britain’s economy between 2010 and 2013.

According to the CBI’s report with Lloyds Bank, MSBs scaled at a rate of 11 per cent during the period but, had they scaled at the 2005-2008 rate of 15 per cent, the contribution could have hit £85.6bn.

And as London tends to dominate the spotlight when it comes to success stories, it’s been highlighted that seven in ten scale-up firms are actually found outside of the capital in various sectors from manufacturing to gaming. As such, Fairbairn believes the firms can “rebalance our economy and bring recovery to every corner of the UK”.

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“As a country, we’re good at telling the beginning of the story. The traditional story of “startup Britain”, a single person, with a single idea and a single-minded determination,” said Fairbairn.

“We’re also good at telling the end of the story. The story of “Brand Britain” of big, well-known firms which people recognise and interact with every single day.

“Yet the ‘missing link’ is the most interesting part. It’s the part where entrepreneurs grow their great idea. Where they increase their profit, hire more people and expand beyond national borders.”

The study found that MSBs are responsible for one in six jobs, despite accounting for just two per cent of UK business, while also making up nearly a quarter of revenue for the private sector.

The CBI’s push comes after Octopus Ventures, which primarily invests in new early-stage companies, introduced a $140m Opportunities fund in October to back mature high-growth firms.

Alex Macpherson, head of Octopus Ventures, said: “At Octopus we seek unusually talented entrepreneurs, and we want to be there supporting them from the beginning of their business journey to the later stages of company growth and maturity.

“The Octopus Opportunities fund is a really exciting development that enables us to keep travelling with some of our existing entrepreneurs for longer, while also providing additional funding to find new investment opportunities.”

The CBI believes the government should show the same support for MSBs by reviewing the tax process to encourage investment in the sector, as well as providing better access to skilled workers required within a scale-up.

By Zen Terrelonge

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