Unlock the growth power of mid-sized firms, says CBI boss

MEDIUM-sized firms are the ‘unsung heroes’ of the British economy, the CBI’s new director general will say today.

In her maiden speech, Carolyn Fairbairn will say it was these firms that saved Britain from falling into recession. They have led the country into recovery and could unlock German-style growth in the future.

Fairbairn ( pictured), the first woman DG at the bosses’ lobby organisation, will reveal that fast-growing mid-sized firms contributed £59bn to the UK economy between 2010 and 2013. But she fears that they are at risk from heavy regulation.

Taken together, the new apprenticeship levy, an increased National Living Wage and the growing cost of unreformed business rates could curb firms’ growth potential, she argues.

Her comments will be heartening for economists who want to see the UK create its own version of Germany’s Mittelstand firms. These family-owned businesses are the backbone of the German economy and have driven its strong export performance.

Fairbairn – who last week said that women were fail- ing to reach the top because they did not want to attend male- dominated business dinners – suggested the achievements of mid-sized firms receive little publicity.

She said we are ‘good at telling the beginning of a story’ where a plucky entrepreneur starts a business, and good at describing the activities of big, well-known firms, but that we leave out the bit in the middle, when firms are expanding.

‘Yet the “missing link” is the most interesting part,’ she said. ‘It’s the part where entrepreneurs grow their great idea, where they increase profit, hire more people and expand beyond national borders.’

She added that seven out of ten of these fast-growing enterprises are located outside London, including high- tech companies in Cambridge, Midlands manufacturers and the gaming industry in Dundee.

Fairbairn said measures to help firms achieve their potential will unlock more growth. She called on the Government to give tax incentives to invest in midsized firms, to improve access to skilled workers from overseas and to boost research and development tax credits.