The Royal Bank of Scotland and NatWest Group have today (8 October) published a new report into Scotland and the UK’s mid-market businesses. Titled 'The Middle Speaks: narrowing the mid-market conversion gap through technology, talent and trade', it finds that mid-market businesses, defined as those with turnover of £10 million to £100 million and/or 50 to 500 employees, are often overlooked by support designed for smaller firms or large corporates.
Analysis in the report by Scale Up Institute identifies over 4,400 Scottish mid-market businesses who collectively employ 644,000 and have an annual turnover of £122 billion, reflecting the immense contribution that the mid-market makes to the Scottish economy. However, despite creating jobs, driving innovation, strengthening supply chains and supporting local communities across Scotland, the segment remains relatively underserved and not well understood.
The report argues that mid-market businesses represent one of Scotland’s greatest growth opportunities. However, for this opportunity to be unlocked mid-market businesses need to be supported, especially in three key areas – tech, talent and trade –, where they lag behind the specialist skills, leadership capability and organisational resources available to larger companies. Tackling this ‘conversion gap’ is key to ensuring future growth in this segment.
As the number one bank for Scotland’s mid-market businesses, the Royal Bank supports more businesses this vital segment that any other bank and sees first-hand the contribution they make to local economies, employment and growth. The report is the product of engagement with over 200 mid-market businesses across the UK and members of the Mid-Market Growth Council.
The report highlights three areas of challenge and potential opportunity:
Tech: Scottish mid-market firms increasingly recognise the need to adopt AI and digital technologies to remain competitive, improve productivity and support better decision-making.
Talent: Despite Scotland’s strong base of higher-level qualifications, firms reported significant shortages across technical, vocational and experienced leadership roles, with employers outside the major cities facing particular difficulties attracting and retaining talent.
Trade: Scottish mid-market firms see access to markets, exports and procurement as major growth opportunities, but complex application processes, supply-chain uncertainty and geopolitical instability continue to constrain them.
The report also sets out four key recommendations to support mid-market Scottish businesses:
1. Create a distinct growth offer for Scotland’s mid-market: The Scottish Government and DBIST Scotland should work with enterprise agencies, local authorities and industry to develop a more coordinated growth offer for Scotland’s mid-market businesses.
2. Strengthen the capability of Scotland’s business networks to support the mid-market: Mid-market firms should work with the Scottish Government, existing innovation centres, universities, business-support communities and regional clusters to help mid-market leaders translate emerging technologies and skills into business growth.
3. Build a more responsive, employer-led skills system in Scotland: Mid-market employers should work with the Scottish Government to be more involved in the design of training, apprenticeships and technical education in Scotland (for example aligning with local business chambers).
4. Make it easier for Scottish mid-market firms to access markets: Governments should reduce the administrative and regulatory burdens for mid-market firms looking to join export and skills programmes, enter supply chains and access growth finance, combined with stronger promotion of existing support available through organisations, such as the Scottish Chambers of Commerce.
Paul Thwaite, Chief Executive of NatWest Group, said: “Mid-market businesses already make a significant contribution to the UK economy. They are one of the UK’s greatest growth opportunities, but too many are held back because, despite having distinct needs, the segment is often overlooked. As the number one bank for mid-sized companies, we have the specialist expertise, local knowledge and financing capabilities to help mid-market customers address the challenges they are facing and reach their full potential as growth engines of our economy across every nation and region of the UK.”
Kevin Havelock, Mid-Market Champion for Royal Bank of Scotland, said: “Scotland’s mid-market businesses are an essential component of our economy, but one that often falls between the cracks in policymaking when compared with small businesses and larger corporates.
“This report makes an important contribution on how government and industry can together equip them with the expertise to continue to innovate at home and successfully export to international markets. Throughout my engagement with Scottish mid-market businesses I am consistently impressed by their growth aspirations, they just need the right support in the right areas – like tech, talent and trade – to realise that ambition.
“As Scotland’s largest bank for mid-market firms, the Royal Bank will continue to lead the discussion around tackling the conversion gap so that these businesses can unlock their full growth potential.”
Charandeep Singh BEM, Chief Executive of Scottish Chambers of Commerce, said: “Scotland’s mid-market firms are ambitious and showing a clear appetite to invest and grow. With 4,400 businesses supporting 644,000 jobs, there is a significant opportunity to turn that ambition into further investment, jobs and economic growth.
“The report’s focus on technology, talent and trade mirrors what we hear from members across Scotland. Firms need practical support to adopt AI and new technologies, access the skills they need and reach new markets at home and abroad.
“Chambers are already playing a practical role on these priorities, using our local networks and international connections to connect firms with the right support and opportunities. Working with Royal Bank of Scotland, we can increase that impact, particularly across technology, talent and trade, and support more mid-market businesses to invest, export and grow.”
Irene Graham OBE, CEO, ScaleUp Institute, said: “The mid-market does not lack ideas or appetite—it lacks a system designed around the challenges firms face as they get bigger, become established, and continue their drive for growth. They still need the support to grow in accessing the expertise, skills and export services that can turn proven potential into sustained scale.”
Through the Mid-Market Growth Council and a network of 11 Mid-Market Champions across the UK's nations and regions, Royal Bank of Scotland and NatWest Group are helping ensure the segment has a stronger voice in policy discussions and better access to the support needed for growth.
The initiative forms part of our Growing Together plan which champions mid-sized businesses and backs powerful regions by highlighting the role mid-market firms play in driving regional and national economic growth.
You can access the Scottish summary here
