Research from GE Capital Australia & New Zealand shows that Australia’s mid-market, which are businesses that have turnover revenue of $10 million to $250 million, is the foundation of the Australian economy.
Despite those medium-sized businesses represent only 1.3 per cent of all businesses in Australia, the sector contributed close to $425 billion towards the country’s GDP in 2009-10 financial year, exceeding the value added by both small or big businesses.
The mid-market is made up of a spread over a range of industries including retail. Within retail, mid-market businesses have increased from 3,066 in 2004 to 3,236 in 2009. There are approximately 25,520 mid-market businesses, contributing approximately 3.2 million full-time jobs to the Australian economy and 243,400 full time equivalent jobs are made up of mid-market retailers. The research also shows that the retail industry turnover was $129.8 billion in June 2009.
“Both small and large businesses get attention in the Australian marketplace, and are effective at influencing policy in their sector. The mid-market on the other hand often goes unnoticed, yet punches well above its weight,” Skander Malcolm, CEO and president, GE Capital Australia and New Zealand, said.
At the same time, the study found that the mid-market faces two challenges to its growth, which was access to capital due the higher costs of debt and the difficulty in security equity funding and the restriction of being able to hire more staff because of skill shortages and limited capacity to manage human resources effectively.
“As Australia seeks to determine how it can capture the benefits of the mining boom and prepare its business sector for a new global economy, the mid-market presents itself as a golden opportunity to drive a more sustainable path to growth,” Malcolm said.
The analysis, released by GE Capital Australia & New Zealand, is the first of its kind in Australia to define the mid-market and the contribution it makes to the country’s economic performance. It forms part of a larger study aimed at creating a greater understanding of the challenges faced by the ‘mid-market’, a sector that sits between small and big business.