Defying Gravity How ambitious businesses can achieve growth in the age of uncertainty
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part 1: time for a finance revolution
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Achieve more. Together.
Achieve more. Together.
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about the study an introduction from our managing partner foreword from the CBI a mid-market facing downward pressures businesses remain confident in their own ability holding back financial firepower finance unfit for purpose time for a finance revolution find a way forward for your business
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about the study about Mills & Reeve
Foresight is forward looking and insightful content produced by Mills & Reeve. Designed to help our clients better understand the key issues they face, it offers broader commercial acumen in addition to legal expertise.
Mills & Reeve is a national law firm with more than 500 lawyers and 900 staff across six UK offices. We’re one of the most successful law firms in the UK as a result of our highly commercial approach, the deep relationships we develop with our clients, and the quality of our people and culture.
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A “medium sized business” is defined as having a turnover of between £10 million and £300 million while a high growth or high performance business is defined as having achieved turnover growth above 20% last year. Participants were CEOs, CFOs or Board Directors.
about Foresight
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Our Defying Gravity report series will help to explain how medium sized businesses (MSBs) can achieve high performance in complex and uncertain times. Research is based on interviews conducted in 2017 with 500 leaders of UK MSBs across a representative range of industry sectors.
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We’re the only firm to have been named in the Sunday Times 100 Best Companies to Work For 14 years running, and 97% of our staff would recommend Mills & Reeve as a good place to work.
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an introduction from our managing partner We set out to understand how these businesses can achieve high performance in challenging times, speaking to 500 mid-market leaders who shared their growth and investment plans, international expansion strategies and innovation priorities.
The mid-market is the unsung powerhouse of the UK economy, with pre-referendum studies forecasting that MSBs are set to be the fastest growing segment of the economy over the next three years. Our own research reveals the impressive resilience of the UK’s middle: two thirds of MSBs (66%) grew turnover last year, at an impressive average rate of almost 20%.
Our campaign, Defying Gravity, explores the issues that leaders are facing and possible steps to success through a series of reports and roundtable events. This first report turns the spotlight on finance and calls for a revolution across the funding landscape to ensure companies can access the right solutions to supercharge their growth.
But can the mid-market continue to defy gravity in the face of deteriorating market conditions? And how has this unstable external landscape impacted mid-market leaders’ confidence in their ability to invest in and generate growth?
Despite very real and recent hurdles, it is encouraging to see mid-market leaders remaining defiantly ambitious about growth, determined to beat market conditions and to hold their position as the driving force of the British economy. More than four in five (83%) mid-market businesses plan to increase turnover in this financial year (2017/18) by a confident average of 22%. Defying gravity indeed!
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We are living in increasingly complex and uncertain times. As the impact of Brexit threatens to destabilise the economy and political landscape, and globalisation and disruptive technology bring rapid change, how are businesses meeting the challenge?
At Mills & Reeve, we want to champion these MSBs and help unlock new opportunities for growth to help them achieve their full potential. As a mid-market business ourselves, we understand the landscape and experience many of the same challenges as the leaders we spoke to. In 2015, our Full Scale Ahead report explored paths to growth for mid-market businesses and the question of whether to scale or sell. Now, following a period of upheaval and disquiet, there are many other considerations on the minds of mid-market business leaders. We would like to thank everyone who participated in our study. I hope their insights help you to find a way for your business to defy gravity in these challenging times. Claire Clarke Managing Partner Mills & Reeve
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foreword from the CBI Innovation will also be critical, and in the uncertain times ahead we need to encourage investment in technology adoption. The UK lags behind its international peers on research and development spending, which is vital for innovation. Raising our combined Government and business R&D spend to 3% of GDP by 2020, coupled with exploring greater export opportunities, will help to fill the order books of MSBs.
This latest report from Mills & Reeve is an important reminder of what MSBs need to succeed. The findings highlight the important principle of a flourishing finance environment that supports MSBs to grow and scale.
Making progress in these areas will give our growth firms the best possible environment in which to thrive, by driving productivity and helping to create an economy that works for everyone. We face challenging times ahead – but there are opportunities as well. The UK remains a vibrant and open nation, and one of the best countries in the world to do business. Now is the time to take advantage of opportunities for productivity growth to make it even better.
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The UK’s medium sized businesses (MSBs) are the heroes of our economy. Without the contribution of fast growth MSBs the UK would have slipped into recession between 2010-13. Indeed, in 2013 just 4% of fast growing companies were responsible for nearly 20% of productivity growth in the UK economy – a truly remarkable statistic. Put simply, what matters to medium sized growth companies matters for the UK economy as a whole.
Carolyn Fairbairn Director General CBI
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Achieve more. Together.
Achieve more. Together.