James Paterson

The number of mid-market businesses in Scotland increased by 5.1% year-on-year, outpacing the national growth rate of 4.4%. The country is now home to more than 2,000 mid-market companies. These businesses – defined as companies generating revenues between £10 million and £500 million, including AIM-listed and private equity-backed firms – are making an increasingly significant contribution to the country’s economy through job creation, investment and innovation.

Businesses in Scotland now contribute £110 billion to the UK economy. The sector also supports more than 490,000 jobs across the country, demonstrating its vital role in creating employment, driving investment and sustaining local communities.

Nationally, the mid-market now contributes £2.44 trillion to the UK economy and accounts for more than one in three private-sector jobs despite representing less than 1% of UK businesses. Scotland’s continued expansion highlights the important contribution regional businesses are making to the UK’s overall growth ambitions.

James Paterson, head of tax at BDO in Scotland, commented: “The mid-market has huge growth potential. These businesses create high-quality jobs, deliver local investment, and drive innovation, and it is particularly encouraging to see the number of these businesses expand across Scotland, defying challenging conditions. Where some sectors’ growth is stagnating, it is essential that we listen to the signals and provide them with the support they need to make sure we are not holding back this engine of the economy.  

“Mid-market businesses often fall into a policy gap as they are too large to benefit from targeted start-up support and too small to influence government policy or win the recognition that the largest corporates command. With the right support, they can continue to play an outsized role in delivering economic growth.” 

BDO has published its latest Mid-Market Manifesto, a series of calls to action for government to maximise the mid-market’s growth. This includes measures to address skill shortages across sectors and regions, including protecting access to apprenticeships on management, leadership, and digital transformation, rolling out a “clearance-style” apprenticeship scheme, and incentivising and supporting small and medium-sized businesses to offer young people work experience. 

It also includes sector-specific recommendations, including to boost growth for some of the most constrained sectors. To boost growth in the advanced manufacturing sector, it urges the government to implement a one-stop shop for mid-sized business export support, reduce energy costs and clarify eligibility for the British Industrial Competitiveness Scheme (BICS), and support mid-market businesses to identify and adopt new technologies.  

Finally, it recommends measures to simplify the tax regime to promote investment, boost employment, and back entrepreneurship. 

Shevaun Haviland, director general of the British Chambers of Commerce, said: “We know that helping mid-market businesses to grow and thrive can have a significant impact on economic growth, with a 1% increase in growth potentially adding £35bn to the UK economy. Therefore, we welcome this timely report from BDO, setting out policy measures to support investment, productivity and international competitiveness. 

“In our most recent Quarterly Economic Survey, half of responding firms (51%) said that they were now more concerned about taxation than they had been three months ago. Simplifying the tax system through measures outlined in this report would have a tangible impact on business growth.”