Although a lot has been said about the important role that small businesses will play in the upturn, much less has been said about medium-sized companies. The latter – defined as employing between 250 and 1,000 people – are actually the key to plugging the unemployment gap, says Ernst & Young’s ITEM Club.
In a special report released today, Entrepreneurs: powering job creation in the UK (which you can download below), ITEM says that fast growth companies – those that start with a workforce of at least ten people and increased this by over 20 per cent per year for at least three years – created 1.3m jobs in the last economic upturn between 2005 and 2008. Nearly half of those jobs were generated at fast-growth mid-size firms, while smaller fast-growth companies (less than 50 employees) accounted for just one-fifth. “There needs to be recognition that very small firms are not the only habitat for entrepreneurship and that the innovation role of medium-sized fast growth enterprises has often been neglected, says Bob Forsyth, head of strategic growth markets at Ernst & Young. “Small start-ups have a vital role to play in creating new industries, but the most dynamic enterprises with the highest impact on our economy tend to be medium-sized firms that have spent several years laying the foundations for fast growth.” See the table below:
ITEM therefore makes the case that since mid-sized companies are such a major contributor to UK output, employment and growth, UK economic policy needs to change to reflect this. “While innovation is often driven by startup companies, the high attrition rate among them means that much of the public and private capital and assistance channelled into them will often be lost,” says Hetal Mehta, economic advisor to the Ernst & Young ITEM Club. “Resources for business development might generate a higher return if channelled towards the minority of businesses that enter into sustained high-growth several years after their foundation, having refined their offer and assembled resources for expansion.” You can download the full report below.
We use cookies on our website to give you the most relevant experience by remembering your preferences and repeat visits. By clicking “Accept”, you consent to the use of ALL the cookies.
This website uses cookies to improve your experience while you navigate through the website. Out of these cookies, the cookies that are categorized as necessary are stored on your browser as they are essential for the working of basic functionalities of the website. We also use third-party cookies that help us analyze and understand how you use this website. These cookies will be stored in your browser only with your consent. You also have the option to opt-out of these cookies. But opting out of some of these cookies may have an effect on your browsing experience.
Necessary cookies are absolutely essential for the website to function properly. This category only includes cookies that ensures basic functionalities and security features of the website. These cookies do not store any personal information.
Any cookies that may not be particularly necessary for the website to function and is used specifically to collect user personal data via analytics, ads, other embedded contents are termed as non-necessary cookies. It is mandatory to procure user consent prior to running these cookies on your website.