That was the key finding of a Coleman Parkes Research study carried out on behalf of Ricoh Ireland. The survey of 1,650 mid-sized businesses across Europe found that 93% encounter barriers to growth that prevent them from reaching their full potential. Companies said the top three obstacles to growth were the need to comply with costly and complex regulations (31%), struggles to attract the best talent (27%), and applying the right technological solutions (27%). Respondents said they believe they could increase revenues by an average of 19% if these obstacles were addressed.
With 75,000 mid-market businesses across Europe, the study estimates the potential missed opportunities to be near $480 billion. Jyoti Banerjee, co-founder of the M-Institute, a think tank that represents mid-sized businesses, told Tech City News that companies face challenges with national business policies. Banerjee said that while these companies are growing and creating jobs, “we must also recognize that more support from government and industry would make a huge difference to how this amazing, but often overlooked, group of companies perform.”
Gary Hopwood, general manager of Ricoh Ireland, feels that governments need to do more to champion mid-market businesses across Europe. He said it’s especially important for them to receive incentives to adapt new technologies. While 65% of digital adopters said technology has helped them outpace their competition, only 30% of mid-sized businesses said that they had applied such digital technologies.
“To achieve this, robust technology will be needed to power mid-sizes businesses into the digital economy and to lead the way with their products and services,” said Hopwood.
According to EY’s European Mid-Market Barometer 2015, middle-market companies in Europe express positive future prospects with only 7% expecting their business to deteriorate in the coming year. Yet across international boundaries, perceptions about the business climate can vary drastically. While companies in Turkey, the UK, Denmark, The Netherlands, Portugal and Spain expressed positive sentiment, those in Russia, Germany, Italy, Poland and Greece ranked among the lowest on the measure of confidence.
Companies in the EY survey were largely in favor of using public investments to promote growth (63%). Nearly three-quarters of those companies said tax deductions would help boost business, while 42% said they most needed reductions in bureaucracy. More of a concern as an impediment to growth was a shortage of skilled labor, as more than half of mid-market companies surveyed in Austria, Switzerland, Greece and Germany said the skills shortage was a problem.
“One potential obstacle in the road is a lack of skilled labor, which can hamper companies just at the point where they are ready to grow. Governments across the region need to think about education, training and immigration reform to address this issue,” said Julie Teigland, EMEIA Managing Partner Accounts and Markets at EY.