Medium-sized businesses, mid-tier companies, the ‘M’ in SME (small and medium-sized/mid-tier enterprises): these are organisations that defy easy categorisation yet form the hidden core of many economies. 

In the UK, for example (BDO 2020a), medium-sized businesses employed 7.6 million people in 2019 compared with 6.9 million working for FTSE 350 companies and 1.6 million in smaller enterprises. For instance, according to the Malaysia External Trade Development Corporation, mid-tier businesses represent 30% of that country’s total gross domestic product and employ 22% of its total workforce.

Mid-tier businesses play a fundamental role in global supply chains, yet many of them are running on legacy systems and processes, facing long-term underinvestment in skills and technologies and have a very strong case for change that crystallised particularly after the outbreak of the Covid-19 pandemic. Neglecting their specific needs could cause considerable damage to economies in the medium term.

The purpose of this series of publications and podcasts is to look at some of those issues facing this undervalued sector and reflect on how they could be addressed.  

A very important question is the role of accountancy  and finance professionals in supporting the sector.  The strategic role of the finance function has proved to be growing in organisations of all sizes, but what is the specific angle for medium-sized businesses? 

In this first article in the series, we will start with a tentative definition of the sector and will present a high-level overview of the challenges facing medium-sized businesses following the outbreak of the pandemic.

Each piece in the series of publications will provide a deeper dive into some of the specific issues identified and will tell the stories of mid-tier organisations finding their way through the challenges of the recovery, putting sectoral and geographic issues in the spotlight.

Our findings are based on a range of interviews with medium-sized sector representatives and roundtables held in different countries.