Press release
More focus on mid-sized businesses critical for New Zealand’s economic growth
Despite their significant contribution to the economy, a New Zealand study released today has found our mid-sized
businesses are not performing as well as their counterparts overseas.
Conducted by Grant Thornton New Zealand, the research focusses solely on New Zealand’s mid-market. It found over the
past decade, the number of mid-sized businesses has grown at a faster rate than small businesses, have more chance of
survival and contributed $35 billion to GDP in 2017. However, it also found, while mid-sized businesses are
outperforming both small businesses and large enterprises in employment growth, they fall behind when it comes to
productivity and profit growth. Capital investment in mid-sized businesses is also low – they have a similar equity to
assets ratio as small businesses.
Stacey Davies, Business Advisory Services Partner at Grant Thornton New Zealand says, “The mid-market is an important
part of our economy, but it’s often overlooked as we focus on getting small businesses off the ground and celebrating
the success of larger ones.
“If mid-sized businesses’ view of the world is not articulated in New Zealand’s business and economic conversations,
their needs won’t be met and opportunities for not only those businesses, but a significant portion of the population,
will be missed.”
The study found 76% of mid-sized businesses requesting financing in 2018 favoured debt financing while only 9% of all
mid-sized businesses requested equity financing.
“Having put the hard yards in to build their businesses, owners are reluctant to give up a share of ownership to an
investor, however, in many cases it’s necessary to achieve meaningful growth,” says Davies.
Mid-sized businesses are also falling well behind when it comes to operating internationally. The study found about 27%
of mid-sized businesses exported products or services in 2018, and only 1.9% reported having international operations.
By comparison, 46% of German, 29% of UK and approximately 33% of Australian mid-sized businesses have international
operations.
The report recommends that mid-sized businesses develop a voice of their own, beginning with the Government determining
an official New Zealand-based definition for a mid-sized business. Once a sharper definition is in place, why the best
mid-sized businesses succeed can be identified and programmes developed to stimulate or accelerate mid-sized business
growth.
Grant Thornton New Zealand’s full report, The power and potential of the mid-size business can be download here.
Key findings
• There are 10,698 MSBs in New Zealand compared with 2,460 large and 471,021 small enterprises
• 65% of MSBs are 11 years or older
• MSBs directly injected an estimated $21.7 billion into New Zealand households through salaries and wages
• MSBs contributed $35 billion to New Zealand’s GDP in 2017
• About 27% of MSBs exported in 2019
• 1.9% of New Zealand MSBs have international operations
• More than half of New Zealand’s mid-sized businesses are in the wholesale trade, construction, retail, trade or
manufacturing sectors.
ends