Latent potential lies in mid-market industrial businesses, say a2e
Recent stockpiling in preparation for the now-altered Brexit deadline of the 31st of March led to an artificial jump in order demand in the manufacturing world. The HIS Markit/CIPS UK Manufacturing Purchasing Managers’ Index rose across October, although still remains ultimately in contraction, as it has for the last six months.
There is no doubt that Brexit related uncertainty has contributed to this, and many hope that a general election being held on December 12th will assist in providing a Parliament able to offering more clarity and direction that the industry can follow.
However, this may not be the only thing holding British industry back. Investment organisation a2e has been acquiring underperforming Mid-market industrial companies for close to twenty years, becoming a leader in the field at diagnosing the issues that these companies face and creating processes that help to solve them.
CEO and Founder of a2e, Amin Amiri, believes that more attention should be paid to this part of the market, writing in his best practice article for The Parliamentary Review that ‘mid-market organisations are the engine room of the economy’. Comparing British industry to its most productive European counterparts, Amiri says ‘We know that in a like-for-like business in the UK and Germany, there is no difference in productivity. The reason the aggregate is lower, however, is because a higher percentage of smaller businesses in Germany make the changes necessary to grow and therefore become more productive’.
Running an organisation that has reached an annual turnover of £160 million in 17 years, Amiri’s suggestions as to how to provide the tools for SMEs to grow are grounded in experience. As he points out, ‘in the UK there are 4.7 million SMEs, but 3.5 million of these have just two employees. This is indicative of the nature of UK start-ups, who are too often unable to scale up the business’. Perhaps, in challenging times for many areas of British industry, providing the tools and knowledge to help existing organisations build for the future could prove to be an essential next step.