Europe’s mid-market could be missing out on £364bn annually

Regulation, talent and tech holding back Europe’s mid-sized business sector 30% of businesses in the UK and Ireland cannot apply the digital solutions which will allow them to grow.

Ricoh, London, 12 September 2016 – New research commissioned by Ricoh reveals that Mid-sized businesses in Europe could be missing out on up to £4.8 million (€5.7 million¹) of annual revenues because of barriers that hinder their growth. 16% of mid-sized business in the UK and Ireland believe that their revenues could have been significantly improved by 16-20% over the last year if such barriers to growth were not in place. Indeed, with 75,000 mid-sized businesses across Europe², the total missed potential revenue could amount to up to £364 billion³ (€433 billion) – almost the same as the annual GDP of Poland⁴. 

While this significant opportunity is being missed, the UK and Ireland’s mid-market specifically is aiming for significant growth. 51 per cent of businesses are planning to offer shares to the public in initial public offerings in the near-future. Another 17 per cent plan to acquire other companies or merge with competitors to increase their competitive strength.

Despite being hugely ambitious, 93 per cent of mid-sized businesses across Europe report that they encounter barriers that prevent them from reaching their full potential. The top three obstacles to growth are the need to comply with complex and costly regulation, the struggle to attract the best talent and finding, buying and applying the right technological solutions.

“Mid-sized businesses in Europe face very similar challenges, regardless of their country and sectors. This includes major structural and behavioural challenges that must be addressed at the level of the individual business, as well as in terms of national business policies,” commented Jyoti Banerjee, co-founder, M-Institute – the think-tank representing medium-sized businesses. “We should be celebrating the accomplishments of mid-sized businesses all over Europe. They are growing and creating jobs. But we must also recognise that more support from government and industry would make a huge difference to how this amazing, but often overlooked, group of companies perform.”

According to the research, 30 per cent of mid-sized businesses in the UK and Ireland have yet to apply digital solutions that would enable them to scale up and become big brands – critical to capturing some of the revenue they miss out on each year.

“The UK government must do more to champion and nurture the booming mid-sized business market,” said Phil Keoghan, CEO of Ricoh UK and Ireland. “£349 billion is an alarming amount of capital for mid-sized businesses, and the European economy as a whole, to be missing out on.

It is clear that mid-sized business across the UK and Ireland have ambitious plans for rapid growth, attracting new talent and acquiring new business. In order to achieve this, robust technology will be needed to power mid-size businesses into the digital economy and to lead the way with their products and services.”

Note: Definition used for this research of a mid-sized business is a business with between 50-500 employees and revenue between £2.5million and £100million.

[1] Exchange rate: 1.00GBP = 1.19EUR, xe.com, 3rd August 2016
[2] Figure for number of mid-sized businesses in Europe provided by M-Institute, July 2016
[3] Total potential missed revenue = average. perceived missed revenue multiplied by number of mid-sized businesses across Europe (£363.6bn = £4,848,876m x 75,000)
[4] World Economic Outlook Database April 2016, International Monetary Fund – GDP Poland, $474.893bn 2015