CBI launches new scheme to boost mid-size firms

CBI Scotland director Iain McMillan. Picture: TSPL
CBI Scotland director Iain McMillan. Picture: TSPL
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A PROGRAMME aiming to boost the prospects of medium-sized firms launches today in an effort to replicate the success of the German Mittelstand.

The CBI has formed a series of M-Clubs, which will offer extra support to mid-market firms who account for an estimated one-third of private sector jobs and GDP.

The organisation believes that promoting high-growth “champions” among 21,000 companies across Britain could add £20 billion to GDP by 2020.

The Scottish Government estimates that there are 3,635 medium-sized firms based north of the Border, accounting for 1.1 per cent of all enterprises. But identification of these businesses can be tricky depending on what criteria are used. The CBI is inviting any company with a turnover between £10 million and £500m to join the clubs.

The cautious and industrious Mittelstand business model is credited with helping Germany weather the worst effects of the global recession, as the largely family-owned businesses kept focus on exports and avoided debt.

Iain McMillan, CBI Scotland’s director, said: “The CBI is launching M-Clubs across the UK to help the often forgotten army of medium-sized businesses get together and access knowledge that can really help them to grow their businesses.

“Our research shows that having more high-growth champions could add £20bn in extra GDP by 2020, and we want to help ambitious medium-sized firms fulfil their potential.”

The forum will focus on helping members access growth capital, sell more overseas and build on their leadership skills. The CBI will also use the clubs to back its lobbying activities, which has so far included winning government support for funding schemes, trade missions and extending the Export Finance Guarantee scheme to firms with turnovers up to £44m.

A total of 33 events are taking place across the UK today, backed by business lender GE Capital, accountancy firm Grant Thornton and Lloyds Bank Wholesale Banking and Markets.

CBI Scotland expects a group of 30 will attend the first event in Glasgow today, with at least three further meetings planned including the next on 30 April.

Oil and gas engineering firm Hydrasun, based in Aberdeen, has signed up with the project. The venture capital-backed firm has a turnover of £100m and employs 600.

Chief operating officer Bob McAlpine said firms such as his could benefit from increased government policy assistance.

“The CBI M-Club will provide a great networking opportunity for medium-sized companies to share knowledge and learn best practice as well as gain expert advice and influence policy making decisions.

“Hydrasun is excited to be part of this initiative and believes that being part of a group that highlights policy gaps specific to our size of company will help to support and address not only each organisation’s individual critical growth factors but help to sustain overall economic growth within the UK.”