Mid-Sized Businesses in Scotland 2010-19

Mid-sized businesses (MSBs) are defined as businesses with a turnover of between £25m and £500m. Evidence demonstrates MSBs to be more productive, more innovative and to disproportionately contribute to economic growth. Therefore, increasing the numbers and size of Scotland’s mid-market is critical to achieving sustained economic growth. This note presents the latest analysis of the extent and shape of MSBs in Scotland. It covers the period of 2010-19 and presents breakdown across sector, employment and nation of ownership. The data relates solely to activity within Scotland.

The methodology consisted of analysis of ONS (Office for National Statistics) data to consider the changes in Scotland’s mid-market since 2010.

Since 2010, the number and impact of MSBs in Scotland has increased. There are 2,320 MSBs active in Scotland in 2019, an increase of +12% since 2010 and 2019 saw a new peak number of active MSBs. MSBs generated £70.8bn of total turnover, which is 25% of all private industry turnover in Scotland. MSBs have seen a 15% increase in turnover since 2010, and this represented 75% of all private sector turnover growth seen in Scotland since 2010. The total employment of MSBs in Scotland is 436,730, representing 16% of all Scottish employment. Employment amongst MSBs have grown +7% since 2010, contributing 30% of all employment growth seen in Scotland. Scottish-owned MSBs make up 21% of MSBs in 2019, accounting for 43% of all MSB turnover and 46% of all MSB employment in Scotland. Since 2010 Scottish MSBs’ share of the overall number of MSBs has stayed around 20%, but Scottish MSBs’ share of turnover and employment has fallen, and in 2019 were at their lowest percentage. Over the same period, overseas owned MSBs’ footprint has increased in every measure, reaching a peak in 2019. 77% of the total turnover growth amongst the mid-market came from overseas owned MSBs despite accounting for 42% of the total number of companies, vs 15% from Scottish MSBs. 81% of the growth since 2010 in the number of MSBs were foreign-owned enterprises. Scotland contributed 20% of the growth, whilst the share from rUK fell -1%. Overseas owned MSBs are less likely to operate in locally traded industries, although a significant proportion of the growth in foreign-owned MSBs has been driven through these industries, such as administrative and support, as well as accommodation, food, information and communications as well as real estate. There was also significant growth in foreign-owned manufacturing MSBs, particularly their turnover.

No recommendations were made.