According to the latest research from BDO, productivity improvements and incorporating technologies like AI will play a vital role in helping mid-sized companies achieve their growth ambitions in the next 12 months, with 43% of Scottish business leaders ranking it as one of the main sources of growth in 2026.

In a survey of 500 mid-sized business leaders, M&A and new partnerships were also identified as key growth driver for 45% of Scottish businesses this year.

Businesses are making hiring plans but remain cautious

Against a backdrop of weakening business confidence and a subdued jobs market across much of the wider economy, the mid-market appears to be bucking the trend, with the all of the Scottish companies surveyed looking to build on their investment plans by increasing headcount in 2026. In Scotland, 63% expect headcount to grow by up to 10%.

The hiring intentions of businesses mirror separate BDO analysis suggesting that mid-sized businesses could add an additional 1.9 million jobs by 2028, bringing total mid-market employment to 9.9 million and reinforcing the role these businesses play in driving UK employment growth.

Funding plans show improving outlook amid persistent challenges 

Looking ahead, a third of Scottish mid-market businesses will use equity from existing shareholders to fund their growth plans in 2026. A further 31% are looking at strategic partnerships or joint ventures to fund scaling their business this year. 

Despite the cautious optimism for growth and investment, business leaders in Scotland remain mindful of the challenges ahead. Tax changes are one of the top concerns for 31% of Scottish businesses, with accessing investment or new capital providing another key risk to business performance in 2026 for nearly one in three (29%) of Scottish companies.

Mark McCluskey, regional managing partner in Scotland at BDO, said: “It’s fair to say that current economic conditions remain challenging for businesses, with high costs and reports of weakening business and consumer confidence influencing hiring and investment decisions.

“However, Scotland’s mid-market businesses remain resilient and, despite erring on the side of caution, the growth ambitions of Scottish mid-sized businesses gives cause for optimism for the year ahead.

“The mid-market is the UK’s economic engine – it is key to unlocking growth, but cost pressures still loom large. Turning ambition into delivery will depend not just on business strategy, but on whether the wider operating and policy environment allows the mid-market to do what it does best: invest, grow and create jobs.”