In a recent SME Blog post I stated that there are 26,000 medium-sized companies (or M’s) in the UK.
Jyoti Banerjee in his recent post asks is this right? I’ve taken my answer from UK government statistics. Jyoti takes his from using a broader approach and his figure comes to 150,000.
Jyoti and I use different definitions for an M and not surprisingly come up with different answers. Malcolm McLelland contacted me from the US. He believes that definitions are important. He comments:
To me one of the most important outcomes of getting our business taxonomies right is that we never collect data until we define the business units for which we're collecting data. And without such data, we don't really know much of anything about certain classes of businesses (as you all suggest!). This means government policy and things like business credit policies might be less than economically efficient.
In the states we have data on revenues, wages, employee counts, and firm counts by "standard industrial code" (now "NAICS" code) by a finely graded series of *firm employee count sizes*; running from 1 employee to 1-4, 5-9, 10-19, 20-99, 100-499, and 500+. So in the states the only apparent problem is in the industrial coding of firms; i.e., how best to develop a taxonomy by economic characteristics such as production inputs, production functions, or production outputs.
His comment on the connection of government policy and data collected is particularly fascinating. Good management needs relevant, up to date information with which to make decisions and that must be the same for governments and policy making.
I recently met up with Paul Druckman (former Institute of Chartered Acountants in England & Wales president). Paul is clearly aware that there is a need for relevant data to seek to focus government attention on the challenges facing medium-sized businesses. He and Jyoti are involved in the M Institute. The M Institute is a new organisation, with the objective of being the trusted information source and support infrastructure for medium-sized businesses.
Why are M’s important? This is one area I think both Jyoti and I agree. M’s have superhero powers. They pack a powerful economic punch and are invisible. Unfortunately, being invisible is one superhero power M’s could do without.
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Philip Woodgate
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