MID-SIZED companies hold the key to plugging the UK unemployment gap as public sector cuts loom, according to a leading economic forecasting group.
The Ernst & Young Item Club says that mid-sized companies are even more important than start-ups in creating employment, adding that it is vital that they receive backing from the government as employment in the public sector is set to shrink.
Bob Forsyth, head of strategic growth markets at Ernst & Young said: “Small start-ups have a vital role to play in creating new industries, but the most dynamic enterprises with the highest impact on our economy tend to be medium-sized firms that have spent several years laying the foundations for fast growth.”
Item Club has called on the government to provide a stable tax policy so that mid-sized companies can flourish.
Scott Halliday, managing partner added: “Stable tax policy that is pro-entrepreneur is important to economic growth and development. government can also encourage innovation by maintaining tax incentives for research and development.
The group also wants to see regulation simplified. “Complex regulation can, quite unintentionally, kill off innovation,” Halliday said.