In her first keynote speech as the organisation’s director-general, Carolyn Fairbairn will reveal that, collectively, 3,000 scale-up medium-sized businesses (MSBs) contributed £59 billion to the economy between 2010 and 2013, “making the difference between recession and recovery”.
The CBI argues that those same businesses, and other expanding MSBs, have a key role to play in unlocking growth across Britain in the coming years.
Speaking at the CBI’s MSB Summit in London – held in partnership with Lloyds Banking Group – Fairbairn will point out that if the 2010-2013 scale-up rate of 11 per cent had matched the 2005-2008 rate of 15 per cent, then the £59bn contribution would have reached £85.6bn.
A new CBI report, in partnership with Lloyds and Experian, reveals that seven out of ten scale-ups are located outside London and include firms spanning all sectors and ages. While those MSBs make up just 2 per cent of UK business, they are responsible for one in six jobs and generate nearly a quarter of private sector revenue, the report notes.
Fairbairn – a former non-executive director of the Competition and Markets Authority and Lloyds Banking Group – will say: “As a country, we’re good at telling the beginning of the story. The traditional story of ‘start-up Britain’, a single person, with a single idea and a single-minded determination.
“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.”
Fairbairn adds: “We found that seven in ten scale-ups are located outside of London – from tech companies in Cambridge, to manufacturers in the Midlands and Dundee’s gaming industry. Scale-ups have the potential to help rebalance our economy and bring recovery to every corner of the UK.”
The CBI is calling for a number of measures to help mid-sized firms scale-up, including reviewing the tax system “to ensure it incentivises entrepreneurship and investment”, improving access to skilled workers by raising the general visa cap and improving cash flow for innovative companies by shortening the timeframe for the payment of the R&D tax credit.
Lloyds chief executive António Horta-Osório said: “Medium-sized businesses are playing a critical role in the UK economy, in creating jobs and growth, and we are determined to help their continued success. As part of our Helping Britain Prosper Plan, we’re supporting more businesses to start up and grow.”