Wales’ Missing Middle, a new report from FSB Wales, shows that in an economy dominated by micro-firms and multinational businesses, medium-sized firms in Wales - those employing between 50-250 people - feel like Welsh Government does not prioritise them and their needs when developing economic policy and that new strategic thinking needs to be deployed if we are to effectively grow the number of such businesses in Wales and strengthen our economy.
After many years of working hard to attract foreign inward investment, the development of medium sized firms in Wales has not matched the pace of this inward investment, despite these firms offering significant benefits to the economy such as grounded investment, locally-developed supply chains and significant ambitions for their employees.
The report argues that the conventional approach to economic development needs to change, and that as part of the Cabinet Secretary for the Economy's new approach through the forthcoming Economic Development Strategy, more emphasis should be given to developing Wales' medium-sized firms which can compete globally whilst being rooted in their communities.
An example of this important cohort of medium-sized business includes Swansea-based John Weaver Contractors. The firm is about to celebrate its 50th anniversary and is now a significant local employer with ambitions for the coming years.
Managing Director Terry Edwards, said: “John Weaver (Contractors) Ltd is an award-winning, family-run building contractors based in Swansea, formed over 100 years ago, and incorporated in 1967 by the Burgess family. We work across Wales successfully delivering construction projects ranging from £50K to £10m in value.
“We are proudly associated with the fact that we train and nurture our very own home grown talent of tradesmen to ensure they become the management of John Weavers future for generations to come.
“As a business we directly employ 75 tradesmen, labour and staff and it is our mission to deliver quality projects throughout the sectors we work in.
“In 2014 our turnover was £12m and our 5 year business plan was to grow the business by 20% year on year up to 2019, in 2016 our turnover was circa £17m which has surpassed our forecasted growth and we continue to see signs in the market place that this projected growth will continue for years to come.”
As part of the report, FSB Wales undertook a number of anonymous interviews with medium-sized firms in Wales on their experiences, ambitions and plans for their business. One business owner said: “I am ambitious for my business and want to see it grow over the next few years. What I really need is for Welsh Government to match this ambition so that I can feel supported to develop the business.”
Janet Jones, FSB Wales Policy Unit Chair, said:"This report represents a much talked about but little understood area of our economy. We must develop the base of medium-sized businesses in Wales and find our missing middle. We have spent too long running very fast to stand still when attracting inward investment from firms who are not based in Wales and are often globally mobile. This has always been a precarious approach to economic development but the challenges of Brexit forces us to thinking about how we mitigate that uncertainty and grow our Wales-based business assets. Our economy is dominated by micro-firms and multi-national firms but medium sized businesses offer many opportunities for Wales and our economy.
"Medium-sized firms are ambitious and are often trading, or seeking to trade, all over the world whilst also developing good local jobs and supply chains in Wales. These firms have the potential to create more opportunities in Wales, particularly as we move to focus on regional economic development.
"We hope to see the Economy Secretary take advantage of the opportunities on offer from expanding our missing middle as he introduces the new plan for the economy in the coming weeks."