The Industry Innovation and Science Australia (IISA) has released a new paper examining the challenges and opportunities facing Australia’s medium-sized enterprises (MSEs), often described as the “missing middle” of the business landscape.
The paper, Mobilising Australia’s missing middle, explores ways policy and industry can better support MSEs to strengthen innovation, competitiveness and long-term economic performance.
According to the paper, MSEs make a substantial contribution to the economy but are frequently treated as part of either the small or large business categories rather than as a distinct cohort.
IISA said a better understanding of MSEs would help policymakers and industry design more targeted programs to support their growth and innovation potential.
The paper noted that MSEs play a significant role in the economic system by helping diffuse technology across sectors and by linking large and small firms within supply chains.
The report highlighted that MSEs can generate outsized impacts on productivity, economic resilience and competitiveness due to their combination of small business agility, emerging scale, research and development intensity and export potential. Their connections across regions and industries were also identified as supporting broader economic activity.
The paper is the first in a planned series of thought-leadership releases from IISA aimed at developing practical approaches to strengthening the MSE sector.
The advisory body said it will continue examining the “missing middle” in collaboration with government, industry and research stakeholders.
Future work will focus on studying successful MSE segments in Australia and overseas, recognising MSEs as a distinct group in innovation and growth programs, and identifying ways to reduce barriers that limit scale and innovation.
IISA also said it would explore policy levers that can help MSEs expand while addressing factors that influence demand for their products and services.
The 2023 IISA report Barriers to collaboration and commercialisation previously examined challenges affecting business partnerships and innovation activity across sectors
