London mid-market businesses could generate almost £6bn in additional annual economic output if key decisions were made more quickly, according to new research from advisory firm FRP.
The figure is the largest opportunity identified in any UK region and reflects the scale of London’s mid-market economy, which already makes the biggest regional contribution to national output.
The findings form part of FRP’s new Decision Economy report, a major new study delivered in partnership with research firm Development Economics to assess the importance of mid-sized businesses – those with between 50 and 499 employees – to the UK economy and how effectively they make decisions. The results show that slow decision making is costing up to £13.7bn in growth across the UK mid-market – equivalent to around 0.6% of GDP.
London mid-market firms in particular are already a major force in the UK economy, generating around £448bn in annual turnover and supporting over 1m jobs. However, it’s estimated that a further £5.9bn could be unlocked by faster decision making, with hesitancy around key issues including innovation (42%) rising energy costs (34%) and policy announcements (29%) listed by businesses as impacting revenue growth.
The barriers holding businesses back include the time required to gather information, cited by 36% of London leaders, followed by competing business priorities (26%) and risks or uncertainty around available options (26%).
London firms said improved data/evidence gathering and analysis would do most to improve the speed and quality of decision-making, cited by 24% of leaders. This was followed by clearer signals from government on future policy and more accurate customer market forecasts, highlighted by 22% and 20% respectively.
Matthew Flower, Partner at FRP Corporate Finance, said: “London’s mid-market is unlike anywhere else in the UK. It combines scale, productivity and international reach, with businesses that are already making a huge contribution to jobs, investment and national economic output.
“What stands out in this research is that even London’s high-performing business base has significant further potential to unlock. Faster, more confident decision-making could help firms protect margins, improve efficiency and respond more quickly in one of the most competitive markets in the world.
“The pace of business in London is intense, but speed still depends on clarity. With better access to insight, clearer policy signals and the right support, London firms can turn faster decision-making into an even greater source of growth and competitive advantage.”
FRP’s Decision Economy report examines the contribution of UK mid-market businesses and the impact of decision-making delays on growth, productivity and resilience. Read the full report here: The Decision Economy | FRP Advisory.