The "overlooked and undervalued” economic engine: mid-sized businesses outperform rest of UK plc but go unnoticed and unsupported

03 April 2018

“Overlooked and undervalued” mid-sized businesses created more jobs in the UK over the last 12 months than the nation’s large and small companies combined, according to new figures published today by accountancy and advisory firm, BDO.

  • Mid-sized businesses have grown faster and generated larger profit growth over last five years than small businesses and large companies
  • These ‘economic engine’ companies created half a million jobs in the last 12 months - more than the FTSE350 and small businesses combined
  • Economic engine businesses make up around 0.5% of all companies by number but account for one third of all private sector revenue and jobs
  • BDO urges government to put overlooked mid-sized businesses at the heart of its thinking for a post-Brexit economy

The new analysis shows that mid-sized businesses created 534,900 jobs in the last 12 months compared to a loss at FTSE 350 firms of 157,000 jobs and an increase of small business jobs of 191,000.

Mid-sized businesses have also grown faster and generated greater profit growth  in the last five years than their smaller and larger counterparts.

Over the last five years, revenues at mid-sized businesses have grown 32% from £984bn to £1.3tn and profits have grown 45% from £76bn to £111bn. In comparison large companies (FTSE350) have seen revenues shrink by 0.6% over the same period from £1.89tn to £1.87tn and profits have fallen 40% from £217bn to £122bn. Revenues at small businesses fell by 2% from £147bn to £144bn and profits increased 6% from £18.9bn to £20.1bn.

These high-growth, entrepreneurial and ambitious businesses (which BDO calls the UK economic engine) punch well above their weight, accounting for only 0.5% of all UK businesses (29,000) but over one third of UK revenue (£1.3tn) and almost 1 in 3 private sector jobs. 

Yet despite such a pivotal role, mid-sized businesses risk being overlooked as the UK prepares to leave the European Union, according to the ‘New Economy’ report published by BDO.

The ‘New Economy’ report outlines a series of policies aimed at boosting the UK economic engine.  Ideas include radically simplifying the UK tax system, focusing on smaller ‘shovel-ready’ infrastructure projects to boost connectivity and productivity and a suite of ideas on improving UK skills.

BDO defines the UK economic engine as being a combination of privately owned businesses with a revenue of between £10-£300million, private-equity owned businesses and AIM listed companies. Large businesses were defined as those in the FTSE350 and small businesses defined as those with a revenue below £10million.

Paul Eagland, Managing Partner, BDO said:

“These high-growth, high-energy and highly-entrepreneurial companies will be the difference between success and failure in our post-Brexit economic future. Yet despite their pivotal role in the UK economy these mid-sized businesses fall into a policy-gap. Too big to benefit from the policies aimed at small businesses but too small to command the attention of Government like the FTSE 350, the UK’s mid-sized businesses are too frequently overlooked and undervalued.

“The UK economic engine is playing its part by recording strong levels of revenue and profit growth and by creating jobs. Whilst it’s fair to say the Government has taken some good steps forward to support business we’d like to see a greater focus on skills, infrastructure investment and tax simplification.”

BDO’s New Economy report can be down loaded here –

Summary of key research


Turnover (2017)

Turnover (2016)

Turnover (2012)

Turnover (increase on 2016)

Turnover (increase on 2012)

Economic engine






FTSE 350






Small businesses








Profit (2017)

Profit (2016)

Profit (2012)

Profit (increase on 2016)

Profit (increase on 2012)

Economic engine






FTSE 350






Small businesses








Employees (2017)

Employees (2016)

Employees (2012)

Employees (increase 0n 2016)

Employees (increase 0n 2012)

Economic engine






FTSE 350






Small businesses







Notes to editors

Accountancy and business advisory firm BDO LLP provides integrated advice and solutions to help businesses navigate a changing world.

Our clients are Britain’s economic engine – ambitious, entrepreneurially-spirited and high growth businesses that fuel the economy. 

We share our clients’ ambitions and their entrepreneurial mind-set. We have the right combination of global reach, integrity and expertise to help them succeed. 


BDO LLP operates in 18 offices across the UK, employing 3,500 people offering tax, audit and assurance, and a range of advisory services. BDO LLP has underlying revenues of £428m and is the UK member firm of the BDO International network.

Methodological notes

BDO’s global network

The BDO global network provides business advisory services in 162 countries, with 74,000 people working out of 1,500 offices worldwide. It has revenues of $8.1bn. 

BDO’s research is based on an analysis of the FAME database of company information and business intelligence.

Mid-sized companies were classed as being either (i) mid-market businesses (with a revenue of between £10m and £300m) (ii) AIM-listed businesses and (iii) private-equity owned businesses. 

Large businesses were classified as those on the FTSE 350.

And smaller businesses were classed as having a turnover of less than £10m


Elliott Grady
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