Clues to unlocking Britain’s Mittelstand

Can Britain’s midsized companies rise to match those of Germany’s Mittelstand? Interest has grown since research by the National Endowment for Science, Technology and the Arts showed that just 7 per cent of businesses have generated half of all jobs created since 2002 by companies with 10 or more employees.

The coalition is focusing on midsized companies in its growth review. The question is: can government spot potential gazelles and do anything worthwhile to help them? These fast growers are spread across all sectors and regions, in old industries as well as new.

John Cridland, director-general of the CBI employers’ group, has given a glimpse of its research on midsized companies in meetings at the party conferences. One problem is that there are simply fewer in the UK than in competitor nations such as Germany and they are less productive. According to the CBI’s survey, only a quarter of companies with turnovers of £10m-£100m believe they can grow significantly over the next five years, and even ambitious ones are sitting on their cash piles because of economic uncertainty. Other problems include having insufficient breadth of management skills and networks, and over-dependence on bank finance. Help with exporting to emerging markets is also badly needed.

“These potential gazelles have the capacity to make a real difference to the economic growth potential of this nation,” Mr Cridland says. “It will take a decade. We need to set out a stall of support for these businesses but we can turn them round.”

Caring Cymru

Is Wales too caring a society to achieve economic success? A study by Robert Huggins of Cardiff University and Piers Thompson of the University of Wales Institute Cardiff found that Wales ranked highly for caring, collective action and a general desire for fairness, but that this was at odds with the culture of individualism seen in more competitive regions.

The business culture of Wales is ill-equipped to generate an economy with high levels of enterprise and innovation, the authors say.

So should the Welsh simply let rip with the kind of aggressive individualism seen in south-east England? The authors draw back from this, suggesting it should go with the grain and seek inspiration from countries that have combined social cohesion with economic success, such as Sweden.

Northern flowering

The north of England may be feeling the spending cuts, but cheering things are happening in the arts.

After restoration of Newcastle’s beautiful Theatre Royal comes the reopening of the City Varieties music hall in Leeds, founded in 1865. Stand-up comics love its intimacy. For 30 years it hosted the BBC variety show The Good Old Days: money was so tight then that they only repainted the right side because the cameras filmed from the left.

Alan Ayckbourn’s 75th play, Neighbourhood Watch, opened in Scarborough to enthusiastic reviews – a prescient satire on middle-class people turning their community into a neo-police state to fight vandalism. Blake Morrison’s We Are Three Sisters for Halifax-based Northern Broadsides, exploring the lives of the Brontes through the text of Anton Chekhov’s Three Sisters, has also received good reviews, as has Tim Pigott-Smith in King Lear in Leeds.

Also in Leeds, a group of artists called Invisible Flock has created a giant “happy map” of people’s memories, in which a glass cylinder marks a spot where something good, great or life-changing happened to them. The cascade of memories includes babies, illicit sex, health scares and all clears, Greggs pasties, first loves, last loves, new hats and Jimmy Savile.

Keep your pecker up.

Caledonian note

Gordon Brown’s Scottish-dominated government may be a fading memory but Scots seem to be taking over the UK’s banknotes.

With Adam Smith already on the £20 note, here comes James Watt, the engineer, on the new £50 note, admittedly alongside his Brummie partner Matthew Boulton. True, there are English people on other notes – Charles Darwin on the £10, Elizabeth Fry on the £5 – but Scots are cornering the higher values. Not that anyone could quibble with the massive contribution of Smith and Watt to the development of the economy.