The Vital Role Of Mid-Market Enterprisesbpcc.org.pl/uploads/publication_attachment_translation/...This report shines a spotlight on the companies at the heart of national economies

Hidden Impact The Vital Role Of Mid-Market Enterprises

At HSBC we share this interest, which is why we’re publishing this report highlighting the vital role that MMEs play in the life of nations. Our aim is to show the enormous value MMEs add to developed and developing economies – to gross domestic product, to employment, to the businesses that supply them and buy from them – and to stimulate discussion about how we can help them achieve even more.

Some leaders of businesses we might categorise as MMEs wouldn’t recognise the label or think it fits their company. That’s fully understandable, both because labels can lead to false assumptions and because there’s no globally-accepted definition of an MME.

For the purposes of this study we have chosen annual sales of between $50 million and $500 million as a marker that enables us to compare MMEs across fifteen diverse countries and territories spanning Asia, Europe, the Middle East and the Americas. The similarities, and the contrasts, we think are striking and informative.

Contents Introduction: Understanding the MME sector 1

How MMEs contribute to economies 2

Measuring the economic impact of MMEs 4

Appendix 9

MMEs are the middle children of the global economy – not large enough to be seen as influential stakeholders of government, but too big to benefit from the incentives and support afforded to smaller companies.

Foreword

Mid-Market Enterprises, Medium-Size Companies, Mittelstand Firms; call them what you will. An expanding body of literature stands testament to growing interest in businesses that aren’t large corporations yet, but that aren’t still SMEs either.

For HSBC, the characteristics MMEs share are more important than the labels. These are companies that are often privately-owned, usually with a professional management team that has replaced the owner-manager leadership structure common to many SMEs. They’re often specialists in their product or service, who know their customers well and who work with them directly rather than through third parties. They’re often in what we call ‘turnover growth’ mode, using internal resources and bank funding to penetrate new markets at home and abroad.

For 150 years we have been helping businesses with characteristics like these to realise their potential, connecting them to opportunities across the world. This report shines a spotlight on the companies at the heart of national economies and societies; enterprises whose positive impact has been hidden for too long.

Steve BottomleyGlobal Head of Mid-Market and Business BankingHSBC Commercial Banking

Hidden Impact – The Vital Role Of Mid-Market Enterprises HSBC Commercial Banking| 1 |

Introduction: Understanding the MME sector

Indeed, it is very difficult to find reliable data documenting them by turnover and contribution to the economy, and where such data does exist the figures are often incomplete or inconsistent, making it impossible to compare MMEs across countries.

We believe this report, commissioned by HSBC from Oxford Economics, is the first international study to consider the way MMEs (based on turnover)contribute to national economies, including secondary effects through supply chain and consumption effects.

What are MMEs?

MMEs, best defined as firms with an annual turnover of between $50 million and $500 million, are in many ways the middle children of the global economy – not large enough to be seen as influential stakeholders of government, but too big to benefit from the incentives and support afforded to smaller companies.

However, they play a very important role in economic prosperity as they:

• Contribute to the diversity and dynamism of the economy

• Work in fast-growing and innovative business areas

• Force established, dominant players to raise their game.

Key definitions and methodology

For this report we have used a combination of public data and prudent assumptions to analyse companies with earnings of between $50-$500million. We have taken 2012 figures as the latest globally available source data for our models. We exclude public administration, education, and health from the analysis, as these sectors are subject to large fluctuations and have different ownership and regulatory regimes across our sample countries, making international comparison difficult.

We define economic impact as the Gross Value Added (GVA) to a country’s Gross Domestic Product (GDP). Economic impact will ripple throughout the economy, so we have separately identified the direct impact (the number employed and GDP), supply-chain impact (as MMEs purchase goods and services from the rest of the economy), and the consumption impact (as those employed by MMEs directly or indirectly spend their wages on other firms’ products and services).

Further information is available in the appendix.

What this report reveals

In this report we have explored the key factors that influence the number of MMEs and their impact across national economies, then applied that understanding to calculate the economic impact using widely available metrics.

This has enabled us to provide market estimates of the number of MMEs and their economic importance to: Brazil, Canada, China, France, Germany, Hong Kong, India, Mexico, Poland, Singapore, Saudi Arabia, Turkey, UAE, the UK, and the US.

From our analysis, we calculate that across these 15 economies there are about 161,800 MMEs, with a combined direct turnover of $16.6 trillion. When we estimate the direct, supply chain and consumer impacts these MMEs are estimated to contribute $11.5 trillion to GDP. In total they directly employ 169 million people.

However, there is a significant variation between countries, with MMEs contributing between 20% and nearly 40% of GDP. Our work in building up these estimates helps to explain the reasons behind these variations, which are discussed later in the report.

MMEs play an important role in economic prosperity

There are 161,800 MMEs spread across the 15 countries studied

These firms directly employ 169 million people

Key Points

Mid-Market Enterprises (MMEs) are dynamic firms that make a substantial contribution to national economies, but surprisingly little is known about the scale and nature of this sector in most countries.


How MMEs contribute to economies

In the absence of consistent data on MMEs by country, we have looked at how the contribution of MMEs varies by industry. Other factors taken into account include the level of economic development (which influences industry structure) and the size and openness of the economy to international trade (high ratio of trade to GDP).

The impact of MMEs on different industriesAccording to available statistics on the contribution of these firms to the UK and US economies, the number of MMEs varies significantly across sectors.

For example, capital-intensive industries, such as mining and utilities, tend to be dominated by large companies. However, fast-moving sectors with low barriers to entry, such as business services, tend to have a higher concentration of MMEs.

The direct economic impact made by MMEs will also vary by sector.

Those in areas such as financial and business services will create higher amounts of value-added than the likes of retail, which has lower margins and where more of the value is passed through to their suppliers, at home or abroad.

For the purpose of this analysis and based on the available evidence on the distribution of firms by size, we found it reasonable to assume that the proportion of MMEs in an industry and its direct economic impact are similar across our sample economies.

Where are the MMEs?

Our analysis reveals the distribution of MMEs across industry sectors markedly across these 15 countries – and leads to an interesting picture of the contribution made by MMEs. This is illustrated in Figure 1.

MMEs represent just 4.1% of India’s total MME direct economic impact (the least), but average 39% across the three developed economies with the highest (UK, US, and France).

Manufacturing, meanwhile, accounts for nearly 39.5% of all MME direct economic impact in China (a significant manufacturer), but only 1.8% in Hong Kong (a heavily service-orientated economy).

Supply chain impacts by sector

The industrial structure will also determine the contribution to GDP that is generated within supply chains. For example, figure 2 ranks the scale of supply chain economic impacts, by industry sector, across all 15 countries.

UK

France

Germany

Turkey

Mexico

Singapore

Poland

Canada

Hong Kong, China

China

Brazil

US

India

UAE

Saudi Arabia

Business Services

Wholesale and Retail

Transport and IT

Financial Services

Accomodation, foodand other services

Construction

Manufacturing

Mining and Utilities

Agriculture and Fishing

Those combinations of sector and country with low numbers (1-3) and shaded blue, have the lowest supply chain impact, while those with high numbers (8-10), coloured red, have the greatest.

This demonstrates that, with a few exceptions, there are strong similarities in how MMEs in a particular industry sector will impact the supply chain across different economies.

While MMEs in secondary industry sectors, such as manufacturing, tend to have the largest domestic supply chains, those in services usually have the smallest. Meanwhile, the primary sectors, such as agriculture, are typically in the middle.

Source: Oxford Economics

Figure 1. Where are the MMEs? Sector distribution of MME direct economic impact


How MMEs contribute to economies


Figure 2. The rank of MME supply chain impacts within each economy by sector where 10 coloured red = highest and 1 coloured blue = smallest

The impact of economic developmentThe level of economic development within a nation will influence its industrial structure and, therefore, the economic contribution of its MMEs.

Less developed economies tend to be dominated by primary activities such as agriculture and mining, while low to middle income countries tend to undertake a large amount of secondary, typically manufacturing, activity.

Developed economies, by contrast, are increasingly dominated by service industries.

Secondary TertiaryPrimary

Agr

icul

ture

Min

ing

and

Util

ities

Man

ufac

turin

g

Con

stru

ctio

n

Who

lesa

le a

nd R

etai

l

Hot

els

and

Cat

erin

g

Tran

spor

t and

Com

ms

Bus

ines

s Se

rvic

es

Fina

nce

and

Insu

ranc

e

Oth

er S

ervi

ces

Brazil 6 5 10 8 2 7 4 1 3 9

Canada 81

9 7 4 5 3 2 6 10

China 5 6 9 102 7 4 3 1

8

France 5 7 10 9 4 1 3 2 6 8

Germany 7 4 9 8 3 2 5 1 6 10

Hong Kong, China (out of 9) 8 6 10 4 2 3 7 5 9

India3 7 10 9

18 6 5 2 4

Mexico 7 6 10 8 3 2 5 1 4 9

Poland 7 5 10 8 3 2 6 4 19

Saudi Arabia 4 6 10 9 3 5 7 2 18

Singapore (out of 9) 7 5 9 3 6 2 8 4 10

Turkey 5 6 10 8 2 7 4 1 3 9

United Arab Emirates1 6 9 10 4 5 7 3 2 8

United Kingdom 7 6 8 10 5 2 4 1 3 9

United States 81

9 7 3 4 5 2 6 10

Fast-moving sectors with low barriers to entry have more MMEs

MMEs in developed countries tend to create more value internally

The direct economic impact made by MMEs will also vary by sector

Key Points

This will affect the economic contribution of MMEs as described above. However, as an economy develops and particular sectors mature, there are also changes in the way that economic value is generated within some industries.

For example, manufacturing firms in less developed countries tend to be engaged in lower value-added work, particularly the assembly of goods. A prime example would be electrical items where the design is undertaken elsewhere.

MMEs in developed countries, meanwhile, tend to create more

value internally. An example would be through design and advanced manufacturing techniques.

This means that even with a similar industrial structure, developed economies’ MMEs will have a greater direct economic impact, while for less developed economies MMEs will achieve a greater contribution to GDP through the activity they generate in their domestic supply chains.

However, that dynamic does not appear in all sectors of the economy, as illustrated by the service sectors. Within business services, for example, there is very little change in the way economic value is added as the economy develops, with supply chain impacts remaining minor in developed and less developed countries alike.

Openness to trade

By openness we mean high ratio of trade to GDP. Smaller nations inevitably do proportionately more international trade, meaning that economic activity in the supply chains of MMEs is more likely to leak abroad through imports.

Supply chain impacts will also be lower for territories such as Hong Kong and Singapore, while for larger countries the reverse is true. MMEs in countries such as China, for example, sustain large, mostly domestic supply chains.


Measuring the economic impact of MMEs

In this section we explore the full economic impacts created by MMEs, as the effects of their economic activity ripple out across each country’s economy.

To achieve this goal we have applied the analysis to calculate three separate components of the contribution to GDP and employment.

Direct impact: The turnover, GDP, and immediate employment accounted for by MMEs across the 15 economies.

Supply chain impact: How MME’s support GDP and employment in the supply chain as they purchase goods and services.

Consumption impact: The consumer spending effects of those directly and indirectly employed.

Direct impact

We have applied our understanding of economic impact by sector, described above, to the very different industry structures across our 15 countries to ascertain the direct economic impact of MMEs.

The results are sensitive to the assumed firm size distribution by sector. Figure 3 shows the results based on US distribution figures (dark blue) and the UK distribution figures (light blue), we have taken the average of these two results (grey) as our central estimates.

This shows that although there is some movement in the rank of economies in Figure 3 when we change the modelling assumptions, the broad rankings still hold. In the remainder of the report, we use the mid-point or average estimate of MME size.

Using this approach, we find that MME direct impact as a share of GDP ranged from 17.2% in the UK to 10.3% in Saudi Arabia (Figure 3). MMEs made the greatest proportionate direct impact in Europe (UK, France, and Germany).

These are all developed economies with a strong presence in services or advanced manufacturing. Those toward the bottom tend to be less developed nations with strong primary sectors in extractive industries (UAE and Saudi Arabia).

Supply chain impact

However, the economic footprint of MMEs is much wider than just the activity that takes place within each MME. Through their supply chain spending, MMEs sustain jobs and output across the rest of the economy.

Middle-income countries tend to have a large number of manufacturing MMEs with large domestic supply


Figure 3. MME direct impact as a % of GDP

Figure 4. Supply-chain impact (supply chain/direct ratio)

China 2.3

Turkey 2.2

Brazil 2

Saudi Arabia

2

Poland 1.9

India 1.9

France 1.8

Germany 1.7

UAE 1.7

UK 1.6

USA 1.6

Canada 1.5

Mexico 1.4

Singapore 1.4

Hong Kong

1.3

15%

15%

10%

10%

5%

5%

0%

0%

Published dataAverage

US basedUK based

UK

France

Germany

Turkey

Mexico

Singapore

Poland

Canada

Hong Kong

China

Brazil

USA

India

UAE

Saudi Arabia


Through their supply chain spending, MMEs sustain jobs and output across the rest of the economy.

chains, in which a substantial amount of economic activity takes place1. This is illustrated by the huge supply chain impact of MMEs in China and Turkey.

By contrast, developed nations have more MMEs in sectors such as business services, which tend to have limited supply chains, with much of the value generated by the MMEs themselves.

Manufacturing MMEs in advanced countries tend to be involved in higher value-adding work, and hence have relatively smaller supply chains.

Hong Kong and Singapore, as small and open economies, meanwhile, have small domestic supply chains, with much of the economic value leaked as imports.

Our analysis of supply chain impacts (see Figure 4) shows that for a number of countries - China, Turkey, Brazil, and Saudi Arabia - the economic contribution of MMEs through the domestic supply chain is approximately equivalent to the direct economic impact, in effect doubling the overall economic impact of MMEs.

Consumption impact

The final source of economic impact in this study is the consumer spending impacts that arise from the wage-financed consumption of those employed directly in MMEs and their supply chains.

In higher value-adding sectors developed economies tend to have larger consumption impacts. Otherwise, the scale of consumption impacts follows similar trends to supply chain impacts.

Figure 5. UK vs Germany

UK GERMANY


Figure 6. USA vs ChinaAs such, they tend to rise with the size of the economy and with population levels. They also tend to fall when an economy is more open and reliant on trade, because a greater proportion of the goods consumed by employees are imported.

Consumption impacts on GDP are, therefore, largest in developed countries, with the top three (UK, France, and US) averaging 10.3%.

MME activity in the petroleum-concentrated economies of Saudi Arabia and UAE, meanwhile, had the smallest consumption impact on GDP, averaging just 1.6%.

Employment contribution of MMEs

MME employment levels reflect both the absolute economic contribution of MMEs in each country, and the productivity of the workforces in each country.

Detailed data from the US and UK show that MMEs tend to exhibit higher labour productivity than the economy as a whole.

It’s also worth noting that the employment figures reported here take account of this productivity difference.

In general, though, employment patterns follow the total economic impact.

Developed nations register the biggest increase in employment from direct impacts, whereas large, developing countries, with a strong manufacturing sector, register large increases in supply chain impacts.

Lower productivity in less developed countries tends to further amplify this increase in employment and explains why Chinese and Turkish MMEs have the greatest share of employment at just over 40%.

The overall economic impact of MMEs

We estimate that when direct, supply chain and consumption impacts are considered, there are 161,800 MMEs across our 15 economies. The number of MMEs is determined by the overall size of the economy, as illustrated by the US and China having significantly more MMEs than the other 13 countries in the study.

USA CHINA


MMEs contribute to GDP and employment directly, via supply chains and through the consumption of those working in MMEs.

MMEs made the greatest proportionate direct impact in Europe (UK, France, and Germany)

The US and China having significantly more MMEs than the other 13 countries in the study

The US is home to 55,700 MMEs, supporting 16.5 million jobs

Key Points

The US is home to the largest number of MMEs with around 55,700 firms supporting 16.5 million jobs, while China has an estimated 40,200 MMEs, contributing a staggering 74 million jobs.

But even in smaller economies, the number of MMEs is substantial. Singapore, for example, is estimated to have more than 1,500 MMEs, supporting over 400,000 jobs, and Poland around 2,140 firms, which sustain 1.7 million jobs.

However, it is more instructive to look at the economic contribution of MMEs as a proportion of the national economy so they are better understood and compared. MMEs, we find, support between one-fifth to two-fifths of GDP and employment.

Figures 7 and 8 show these separate impacts aggregated to show the total economic contribution of MMEs by country.

On this basis, MMEs in France support the greatest share of GDP (over 39%), though only the fifth-largest proportion of national employment (at 37.3%).

China, on the other hand, ranks fourth in terms of contribution to GDP, but comes top in terms of the share of employment supported.


Figure 7. Direct, supply-chain, and consumption impact as a % of GDP

Figure 8. Direct, supply-chain, and consumption impact as a share of

employment

France

Turkey

UK

China

Brazil

Germany

Poland

Canada

USA

India

Mexico

Singapore

UAE

Hong Kong

Saudi Arabia

China

Brazil

Turkey

France

UK

Poland

Germany

India

Canada

USA

Singapore

Saudi Arabia

UAE

Mexico

Hong Kong

Direct Supply Chain Consumption

%

16.512.510.5

11.920.59.0

13.716.09.3

12.319.95.7

14.212.011.1

14.110.512.2

14.015.16.8

14.711.08.1

11.211.610.9

14.58.6

10.0

12.66.49.9

14.87.06.1

13.99.91.6

12.99.72.7

12.76.24.4

13.24.04.3

15.618.15.3

17.210.810.6

13.717.56.6

13.713.98.1

16.311.97.3

15.313.45.9

15.28.38.3

13.27.710.1

12.310.67.8

15.57.03.7

15.35.94.3

12.38.92.0

14.54.03.7

10.310.21.3


Conclusion

In fact, nearly two-fifths of French GDP in the sectors studied is reliant on MMEs, with the likes of Turkey, UK, China, Brazil, Germany, and Poland not far behind.

Even the economies that are least reliant, such as Saudi Arabia, MMEs still account for one-fifth of national GDP in these sectors.

Our analysis has identified a number of ways in which various MMEs make important contributions to their nation’s economies – and it’s our belief that such facts should alert policy makers to the importance of nurturing this strong segment of companies.

In addition, an increase in the number of MMEs should improve productivity around the world because it is higher among MMEs than in economies as a whole.

Within developed nations, many MMEs work in high value-adding sectors, such as business services, and generate higher direct contributions to the economy.

In less developed nations, meanwhile, many MMEs are involved in sectors such as manufacturing, where substantial economic benefits are generated for other firms via domestic supply chains.

Our conclusion is that the role of MMEs in stimulating the innovation and competition that is so essential to a vibrant economy should not be overlooked.

Although this report has started to quantify the economic impacts of MMEs, it is our hope that it encourages more research into the important contribution they make.

Our report shows that MMEs support a

staggering amount of economic activity

in the 15 countries we analysed.

An increase in the number of MMEs should improve productivity around the world.

MMEs play a very important role in the economic prosperity of nations

From the 15 economies there are estimated 161,800 MMEs with a combined turnover of $16.6trillion

They contribute $11.5trillion to GDP and directly employ 169million. This is between 20-40% of GDP and employment

Key Points


Conclusion Appendix

Study objectivesThe objective of this study was to highlight the importance of the MME sector across a select group of economies, namely Brazil, Canada, China, France, Germany, Hong Kong, India, Mexico, Poland, Singapore, Saudi Arabia, Turkey, UAE, UK and USA. For the purposes of this work MMEs are defined as enterprises with a turnover of between $50 million and $500 million in 2012 US dollars and exchange rates.

Data availability and qualityBusiness data are very sparse and quality varies from country-to-country. Official data are not available in some economies, and definitional incompatibility across data sources and economies can cause problems. Consequently, there are limited studies of this type.

For the 15 economies in this study, sufficiently detailed official government data was only available for the UK and US. International bodies (e.g. OECD) provide data on firm size, but it tends to be based on employee counts rather than turnover.

Private vendors maintain company level databases that are built up using administrative data. They are, however, far from comprehensive across economies as it is not a legal requirement to register a company (e.g. Companies House in the UK) in all economies.

Therefore, there is no way of knowing the true number of MMEs in each sector for the vast majority of our economies from administrative data. To produce MME estimates we have therefore developed a ‘top-down’ approach: applying patterns seen in those few economies that have detailed data to aggregate numbers available for other economies.

A ‘top-down’ approachThe key assumption in our approach is that the distribution of firm sizes in a given industrial sector is comparable across economies. This means we can use the US and UK published data to produce averages that can then be applied to the 13 economies that lack sufficiently detailed published data.

Using the UK and US data we can estimate the average MME share of turnover and the average MME turnover by sector. These are applied to Oxford Economics’ estimates of total sector turnover in each country from our Global Industry Model.1 This allows us to derive sector level data for MMEs, namely turnover, GVA and their count.

Next we adjust Oxford Economics’ sector productivity estimates for each country by the relative productivity of MMEs to other firms in the benchmark economies to derive MME productivity by sector.

Applying MME productivity estimates to our GVA figures allows us to derive MME employment.

This approach provides a number of benefits:

• We are able to provide consistent estimates of MME activity across economies and sectors;

• It can be updated and forecast if necessary; and

• The estimates are based on the available national gross output and employment data for each sector in each country.

Finally, the organisational structure of sectors such as public administration, education and health are vulnerable to policy-related factors that are idiosyncratic to economies. We have therefore excluded these three sectors from the analysis to ensure comparability between the benchmark economies and the other economies in the study.

Testing firm size distribution assumptionsThe key assumption in our approach was that the distribution of firm sizes in a given industrial sector is comparable across economies. This has two implications:

• MMEs in a given sector account for the same share of total turnover across all economies; and

• Average MME turnover in a given sector is the same across all economies.

To test the assumption we undertake a review of existing literature and investigated / analysed relevant available data. We found:

• The literature suggests that firm size distributions are similar in form across economies (see next sub-section);

• The literature and 250+ employment data offers no evidence to support the idea that the turnover contribution of MMEs (by sector or in aggregate) is correlated with GDP per capita. In other words given productivity differs across countries, turnover in companies employing over 250 employees might be expected to be higher in more productive economies and lower in less productivity economies. However turnover contributions across a range of OECD countries did not always follow the relationship,

• We tried refining the assumption using available SME data but it did not improve the result and as a check did not accurately predict known US or UK data.

Literature on the firm size distributionWhile a rich pool of academic literature exists on firm size distribution it tends to be concentrated on using employee numbers as the measure of size. Studies on firm size by turnover bands are more limited. As we explore in the sections below, the relationship between these distributions is not simple. There are also definitional issues to contend with.

There is a body of literature that focuses on the theoretical distribution of firms. Much of this work attempts to estimate the distribution of firms using a combination of sales, turnover and employment data. Examples include:

• Stanley, Buldyrev, Havlin, Mantegna, Salinger and Stanley “Zipf plots and the size distribution of firms”, Economics Letters 49 (1995) pages 453-457;

• De Wit “Firm size distributions: An overview of steady state distributions resulting from firm dynamics models”, International Journal of Industrial Organisation 23 (2005), pages 424-450;

1 The Global Industry model contains historical data from 1980 and forecasts to 2040 for 69 economies and 14 regions and trading blocs.


• Fujiwara, Guilmi, Aoyama, Gallegati, and Souma “Do Pareto–Zipf and Gibrat laws hold true? An analysis with European firms”, Physica A 335 (2004), pages197-216; and

• Zhang, Chen and Wang “Zipf distribution in top Chinese firms and an economic explanation”, Physica A 388 (2009), pages 2020-2014.

They find that firm size follows fairly closely a Zipf plot, log normal distribution or Power-law with perhaps the exception of the very large companies. In addition they find similar results across developed economies and for various measures of firm size (e.g. sales and employment).

While these papers do not suggest the underlying assumption is not appropriate, there is nothing (that we have read) that explicitly tests the comparability of firm size distribution across sectors and economies (particularly for developed and developing) using turnover data.

More practical, data-heavy research on firm size distributions across economies is less available and therefore it is difficult to determine if there are differences between developed and developing economies. Examples include:

• Ayyagari, Beck and Demirguc-Kunt “Small and Medium Enterprises across the Globe: A new Database” World Bank Policy research Working paper 3127 (2003);

• Abe et al “A Distributive comparison of enterprise size in Korea and Taiwan” The Developing Economies, XXXV-4 (1997), pages 382-400;

• O’Mahony and Van Ark “EU Productivity and Competitiveness: An Industry Perspective”, European Commission (2003); and

• Cebulla (2011) “Mid-Sized Businesses in Finland, France, Germany, Sweden and the UK – General Statistics”, National Institute of Economic and Social Research (2011).

These papers also tend to focus on employment numbers, given the availability of data. In summary they provide some evidence to support the assumption that the contribution of MMEs (in terms of GVA and employment) is independent of GDP per capita.

Data analysis on firm size distribution beyond our 15 economiesIn more practical terms we undertook desk based research to test the validity of modelling assumption. In doing so we looked beyond the 15 economies covered in this analysis. Initial discussions with national statistical agencies in a benchmark group of countries including Japan, Taiwan, Australia and Singapore proved inclusive given the lack of banded turnover data available.

Further analysis using mainly employee based data for a wider group of countries did not contradict the central assumption of the modelling.

1 Total economic contribution of MMEsThe total economic impact of MMEs adds the indirect effect – the economic output associated with supply chain activity for the MME sector - and the induced effect – the economic activity associated with employees’ wage spending in the wider economy. This was estimated using available and synthesized input-output tables collected from national statistical agencies and the World Input Output Database www.wiod.org/new_site/home.htm.

Appendix (continued)

Issued by HSBC Bank plc 8 Canada SquareLondon E14 5HQUnited Kingdomwww.hsbc.com

Appendix (continued)

For media enquiries or for further information about the research please contact:

Kate Woodyatt HSBC Global Communications [email protected]

Or click on https://globalconnections.hsbc.com/global/en/articles/hsbc-mme

Note: Whilst every effort has been made in the preparation of this report to ensure accuracy of the statistical and other content, the publishers and data suppliers cannot accept liability in respect of errors or omissions or for any losses or consequential losses arising from such errors or omissions. The information provided in this report is not intended as investment advice and investors should seek professional advice before making any investment decisions.

Compiled by Oxford Economics on behalf of HSBC Commercial Banking www.oxfordeconomics.com

https://globalconnections.hsbc.com/global/en/articles/hsbc-mme

https://globalconnections.hsbc.com/global/en/articles/hsbc-mme

Documents

The Vital Role Of Mid-Market Enterprisesbpcc.org.pl/uploads/publication_attachment_translation/...This report shines a spotlight on the companies at the heart of national economies