The main policy recommendations of the Empowering Medium Enterprise report are as follows:
1.1. Recommendations regarding access to finance
In the area of access to capital, M Institute recommends the following actions from policy-makers:
• Investigate why the longer-term financing model between banks and companies that exists on the Continent is not applied by UK banks
• Create a credit rating scheme for medium organisations. Currently, there are six major credit agencies that dominate the large enterprise segment of the market but with none playing in the medium business sector: clearly, there is an issue of scale involved. It may not be worthwhile for any one of the existing commercial credit rating agencies to push-start a scheme for medium organisations, but government could help remove the imperfect knowledge that currently exists between lenders / investors and borrowers.
• Investigate whether there is need in the UK for a funding agency that supports bank loans and other financing when the main use for the funding is to be innovative or enter new markets.
1.2. Recommendations regarding regional development
Regional development will really work for medium organisations if:
• RDAs are intentionally strategic in choosing the strengths of the region they will focus on, in their efforts to attract inward investment
• As RDAs are relatively unknown among British companies, they need to make a conscious effort to promote their regional strategies to organisations inside their region so that the latter can plug into their region’s competitive strategies.
1.3. Recommendations regarding the burden of regulation
M Institute recommends three actions in the area of challenge relating to regulation:
• Steady performance by government in reducing the regulatory burden, on the lines of the Dutch model, where new regulation is considered only in the context of old regulations that can be scrapped.
• Simplification of the regulatory environment for medium organisations in particular, as they usually have to deal with regulatory issues on their own without the added infrastructure and manpower that larger organisation can use to deal with such issues.
• Reconsideration of the overall burden of regulation in those industries where there is additional regulation from an industry watchdog, such as in travel and financial services.
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