Mid-sized UK businesses must boost revenues from exports, says CBI director

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UK mid-sized businesses (MSBs) are behind Germany and France when it comes to exporting outside of the EU, according to new research by GE Capital.

Commenting on the findings and speaking alongside Vince Cable at summit focused on the importance of UK mid-market companies to the economy, Katja Hall, CBI chief policy director, said: “GE Capital’s findings on exports are compelling. Just 17% of UK MSB revenues come from outside the EU. That’s lower than in Germany, France or Italy. Only 15% of UK MSBs have grown their revenues from China in the last five years. That is compared with 25% in France and 23% in Germany and Italy. This must change.”

GE Capital’s research really highlights the disparities, said Hall. The UK mid-market has the second-highest proportion of ‘gazelles’ – or ‘growth champions’ – when compared to the mid-market in Germany, France and Italy, but also the second-highest proportion of flat and declining companies.

GE Capital’s research also found was UK MSBs’ principle focus is simply staying in business, said Hall. Survival rather than growth is the defining strategy of 26% of the companies surveyed, more than in France and Italy and almost double that of German companies.

“MSBs and exports are intrinsically linked, and we welcome the government’s moves to bolster the support they are offering to help MSBs looking expand overseas,” said Hall. “It’s critical, because MSBs are our innovators and fundamental components of larger exporters’ supply chains.”

Hall said the CBI had totaled the size of the prize in October 2011 in its report Future Champions. If the gap narrows so there are more ‘gazelles’, as well as more slow-growing firms reaching a steady expansion rate rather than stagnating, MSBs could add £20bn to the economy by 2020, said Hall.

“That’s a lot of growth, and in a relatively short time. 

“But we won’t achieve it if we carry on as we are. The neglected middle must become the nurtured middle.”

Recognising the recent emphasis UK Trade & Investment (UKTI) has placed on MSBs, Hall said: “The CBI and UKTI recently led a joint delegation of 30 MSBs on a trade mission to Turkey, the first designed for this size of business. We worked closely with UKTI to develop a programme that really made sense for these firms. Companies on the delegation came home with new commercial opportunities and the contacts they need to help them grow overseas.”