Too big to benefit from government schemes aimed at start-ups and too small to wield the influence of major multinationals, life can be challenging for the world’s mid-market enterprises (MMEs). And yet, the new study from HSBC shows, it is these mid-size companies that form the backbone of our economies, supporting as much as two fifths of GDP and employment.
`Hidden Impact – The Vital Role of Mid-Market Enterprises’ assesses the contribution businesses with annual sales of between $50 and $500 million make to 15 developed and emerging economies in Asia, Europe, the Middle East and the Americas.
It finds there are almost 162,000 mid-market firms in these countries that employ 169 million people. By adding their supply chain impacts and the wage spending of their employees to their direct output, the report estimates that they contribute a staggering $11.5 trillion of economic value.
“Industry groups and observers have called mid-market enterprises ‘neglected,’ the ‘Cinderella sector’ and the ‘squeezed middle’,” said Steve Bottomley, global head of Mid-Market and Business Banking for HSBC. “At HSBC we’re shining a spotlight on these companies, recognizing that they are at the heart of national economies and societies, they are enterprises whose positive impact has been hidden for too long.”
For `Hidden Impact – The Vital Role of Mid-Market Enterprises’, HSBC commissioned researchers at Oxford Economics to analyze the mid-market segment in Brazil, Canada, China, France, Germany, Hong Kong, India, Mexico, Poland, Saudi Arabia, Singapore, Turkey, the UAE, the UK and the U.S.
They found that nearly two-fifths of French GDP is reliant on MMEs, the highest of the countries in the study, and that even in Saudi Arabia at the other end of the scale MMEs still account for a fifth of GDP.
Because the industrial composition of the mid-market varies – more than a third of China’s MMEs are manufacturers whereas business services dominate in the UK – the economic impact of MMEs is felt in different ways. MMEs in developed countries tend to create more value internally, for example through design and advanced manufacturing techniques, whereas in less developed economies they achieve a greater contribution to GDP through the activity they generate in their domestic supply chains.
“With this report MME’s are highlighted as the backbone of our economies stimulating innovation and competition essential to the development of a healthy economy,” Steve Bottomley said.
Access the full HSBC report here.