Mid-Sized Businesses in the regions and sectors across 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’s regions and sectors. 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.

The five main findings are: the Glasgow City Region has the most MSBs, the most employment and generates most turnover, but growth has been slower (relative to share of MSBs in Scotland) since 2010; the Edinburgh and South-East region is driving Scotland’s MSB growth since 2010. This highlights an acceleration of the concentration of MSB presence and growth in Scotland’s main cities; MSBs in Aberdeen City and Shire saw a decline from 2015-16 after going through significant growth to from 2010. Despite this, the region still over delivers (relative to share of MSB market) in turnover; the Highlands and Islands region has seen similar trends, with performance peaking in 2015-16 but has less overall impact at the national level compared to Aberdeen City and Shire; and in MSBs activity and growth, the South of Scotland and Ayrshires are falling behind other regions. The growth dynamics and structure of MSBs prior to 2020 lays the foundation on which the impact of the coronavirus pandemic will be felt. These foundations are: growth in MSBs is being predominantly driven by foreign-owned MSBs, with Scottish MSBs - despite increasing in number - becoming smaller (on average); Scottish-owned MSBs are more likely to be, and achieve growth, in locally traded industries and growth and activity of MSBs is concentrated in cities, but MSBs can achieve growth everywhere. What was limiting some regions was the lack of new MSBs.

No recommendations were made but the evidence demonstrates that supporting existing, but developing new MSBs, to grow across all of Scotland, and encouraging existing MSBs elsewhere (to come to Scotland), needs to be a cornerstone of economic recovery.