fst mid sized businesses presentation tera allas 26 november 2012
Post on 28-Nov-2014
455 Views
Preview:
DESCRIPTION
TRANSCRIPT
Unleashing the potential of mid-sized businesses
26 November 2012
Tera Allas
Deputy Head – Government Economic Service
Director General – Strategy, Analysis and Better Regulation, BIS
2
Unleashing the potential of mid-sized businesses: today’s discussion
• Mid-sized businesses are an important part of the UK economy, with many attractive characteristics
• However, mid-sized businesses face specific challenges that limit their current potential
• Addressing these challenges is fundamental to achieving strong, sustainable and balanced growth
• The government has put in place a number of programmes to help unleash this potential
GE Capital
BIS
CBI
3
The definitions of “mid-sized” vary but refer broadly to turnover of £25-£500m
Definitions of mid-sized businesses
Number of employees
An
nu
al t
urn
ove
r, £
m
European Commission
Note: positioning of the shapes is illustrative, not precise
4
Mid-sized firms contribute around a fifth of employment and turnover in the UK
0.5
21.2 19.7
0%
10%
20%
30%
40%50%
60%
70%
80%
90%
100%
# ofbusinesses
Employmentof all
businesses
Turnover ofall
businesses
Small and largebusinesses
Mid-sizedbusinesses
Contribution of mid-sized businesses to all businesses in the UK
Source: Growth review: Mid-sized businesses evidence base, Department for Business, Innovation and Skills, November 2011
5
The number of mid-sized businesses has grown rapidly since 2005
No. of private-sector registered firms, by size category
80
85
90
95
100
105
110
115
120
125
130
1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010
No
. o
f fi
rms
(in
de
xe
d t
o 1
99
7=
10
0)
Small Mid sizedLarge
Source: Growth review: Mid-sized businesses evidence base, Department for Business, Innovation and Skills, November 2011
MSBs
6
Innovation is a key driver of growth for mid-sized businesses in the UK
% of revenue derived from innovation by company size 2009
Source: Future champions: Unlocking growth in the UK’s medium-sized businesses, CBI, October 2011
MSBs
MSBs
7
Within a mixed picture, some mid-sized businesses achieve very high growth
Source: Growth review: Mid-sized businesses evidence base, Department for Business, Innovation and Skills, November 2011
High-growthMSBs
8
Unleashing the potential of mid-sized businesses: today’s discussion
• Mid-sized businesses are an important part of the UK economy, with many attractive characteristics
• However, mid-sized businesses face specific challenges that limit their current potential
• Addressing these challenges is fundamental to achieving strong, sustainable and balanced growth
• The government has put in place a number of programmes to help unleash this potential
9
Relative to comparator countries, the UK mid-sized business sector is under-weight
Source: Mid-sized Businesses in Finland, France, Germany, Sweden and the UK – General Statistics, NIESR, December 2011
Mid-sized businesses as % of turnover of all businesses
32.8
32.0
31.5
30.5
19.7
Sweden
Finland
Germany
France
UK
10
A number reasons may be responsible for the relative “under-performance”
Drivers of mid-sized business (MSB) sector contribution
MSBs as % ofall business
turnover*
MSBs as % ofall businessemployment*
MSB turnoverper employee(productivity)*
Average turnoverper employee inspecific sectors*
MSB sector mix(relative to allbusinesses)*
Number of MSBsas % of number
of all businesses*
Average numberof employees
per MSB*
MSB specificproductivitydifferences*
* Compared to other countries
“Population”
“Size”
“Sector mix”
“Productivity”
11
UK mid-sized firms’ productivity is considerably lower than other countries
Source: Mid-sized Businesses in Finland, France, Germany, Sweden and the UK – General Statistics, NIESR, December 2011
Turnover (in €) per employee of mid-sized businesses 2009/10
221
268290 290 301
UK Germany France Finland Sweden
12
UK mid-sized businesses’ productivity is relatively poor in all sectors
Source: Mid-sized Businesses in Finland, France, Germany, Sweden and the UK – General Statistics, NIESR, December 2011
Turnover (in €) per employee of mid-sized businesses 2009/10
256
228
206
279
363
293
Manufacturing
Otherproduction
Services
Average of EUcomparators*
UK
* Finland, France, Germany, Sweden
13
Only 26% of UK mid-sized businesses export more than 50% of their turnover
Source: The Financial Times, 23 October 2012; BIS analysis
46
17
11
9
17
Export more than 75% of theirturnover
Export 50-75% of their turnover
Export 25-50% of their turnover
Export less than 25% of theirturnover
Do not export
Mid-sized businesses’ export intensity in the UK % of total mid-sized business population
26%
14
UK mid-sized companies employ fewer graduates than those in other countries
% of managers in mid-sized firms with a degree 2011
Source: Future champions: Unlocking growth in the UK’s medium-sized businesses, CBI, October 2011
15
Unleashing the potential of mid-sized businesses: today’s discussion
• Mid-sized businesses are an important part of the UK economy, with many attractive characteristics
• However, mid-sized businesses face specific challenges that limit their current potential
• Addressing these challenges is fundamental to achieving strong, sustainable and balanced growth
• The government has put in place a number of programmes to help unleash this potential
16
-1.0
-0.5
0.0
0.5
1.0
1.5
2.0
2.5
3.0
2011 2012 2013 2014
Pe
rce
nta
ge
po
ints
Private consumption Business investment Other private investment
Government Net trade
GDP Growth Forecasts
0.9% 0.7% 2.1% 2.7%
Business investment and trade are instrumental to UK’s economic recovery
OBR* forecast of contributions to GDP growth 2011-2014
* The independent Office for Budget Responsibility
Businessinvestment
17
Mid-sized businesses are particularly important in our key export sectors
Source: Growth review: Mid-sized businesses evidence base, Department for Business, Innovation and Skills, November 2011; Industrial Strategy: UK Sector Analysis, Department for Business, Innovation and Skills, September 2012; * UK Exports by Category of Goods and Services, ITC Trade Database
In top 5 export categories* in 2010
18
Growth of existing mid-sized businesses would contribute to regional rebalancing
Sou
rce:
Fut
ure
cham
pion
s: U
nloc
king
gro
wth
in th
e U
K’s
med
ium
-siz
ed b
usin
esse
s,
CB
I, O
ctob
er 2
011
19
5.2%
1.4%
8.3%
3.2%
0%
2%
4%
6%
8%
10%
12%
14%
16%
Innovation activefirms
Not innovationactive firms
Other graduates
Science graduates
Employing graduates is correlated with innovation and firm growth
Graduates as a proportion of all employees in innovation active and not innovation active firms 2008
Source: UK Innovation Survey 2009
13.5%
4.6%
20
Unleashing the potential of mid-sized businesses: today’s discussion
• Mid-sized businesses are an important part of the UK economy, with many attractive characteristics
• However, mid-sized businesses face specific challenges that limit their current potential
• Addressing these challenges is fundamental to achieving strong, sustainable and balanced growth
• The government has put in place a number of programmes to help unleash this potential
Support investment and exports
Competitive tax system
The Plan for Growth sets out the government’s strategy under 4 ambitions
£££
Educated and flexible workforce
Best place to start and grow a business
21
22
A number of initiatives are driving our support to mid-sized businesses
Spring 2011 Autumn 2011 Spring 2012 Autumn 2012
Plan for Growth
Mid-sizedbusinesses
growth reviewIndustrial strategy
Lord Heseltinereview andresponse
Implementation
Examples:• New equity for
MSBs: Business Growth Fund
• Red Tape Challenge
• Presumption in favour - planning
• Reducing main corporation tax rate from 28% in 2011 to 22% by 2014.
Examples:• Export support for
MSBs across English regions, eg IP advice and ‘mini-MBA’
• 8 LEPs agree pathfinders to raise MSB profile
• Business School Task Force – report 22 Nov
Examples:• Advanced
Manufacturing Supply Chain Initiative: £125m
• Breedon review, development of £1bn Business Bank
Examples:• Strengthened
role for Chambers, esp. in exports
• Stronger LEP capability and influence
23
Good progress is being made on growth measures and commitments
Status of Plan for Growth Phase 1 and 2 deliverables100% = 250+ measures
39%
61%
CompleteProgress Made
Examples of impact
Apprenticeships• Over 500,000 took up apprenticeships in
2011/12, in over 200,000 workplaces• Extending ‘Higher Apprenticeships’ • 2/3 better paid on completion
Investment and exports• 23,000 companies supported by UKTI in
2011/12; on target for 32,000 in 2012/13• Over £1.5bn High Value Opportunity
wins since launch in 2010• Securing over 1,400 investments from 58
countries in 2011/12
24
These and other actions can boost mid-sized businesses’ contribution further
95%
31%20%
10%
15%
15%
9%
13%
14%
18%
41%51%
63%
0%
20%
40%
60%
80%
100%
Enterprises Employment Turnover Exports
Micro (0-9 employees) Small (10-49) Medium (50-249) Large (250+)
Source: BIS Business Population Estimates 2011; *DTI Economics Paper 18 2006 & OECD Statistics Brief Feb 2011
4.5m 23.4m £3,100bn £391bn*100%=
UK economic statistics by size of firm 2011*
Key source of
growthpotential
Unleashing the potential of mid-sized businesses
26 November 2012
Tera Allas
Deputy Head – Government Economic Service
Director General – Strategy, Analysis and Better Regulation, BIS
top related