A new report reveals that the performance of Australia’s mid-sized businesses could significantly shape the future of the economy, highlighting larger productivity gains, stronger resilience, and greater R&D investment in the sector.
Commissioned by MYOB and authored by Impact Economics and Policy, The Bigger Picture Report combines industry and government data representing around 70,000 Australian mid-sized businesses* with insights from a new poll of 500+ business leaders, offering a new perspective on the economic contribution and significant strengths of the sector.
Proving why mid-sized businesses are the ones to watch, the report reveals that the productivity of the sector has risen at a faster rate than that of larger and smaller businesses – increasing by 1.2% per year since 2009-10. As a result, the gap between the levels of mid-sized business and large business productivity, had narrowed to around 12% by the end of FY2022-23.
Backing these productivity gains is a significant push around innovation and R&D. According to the report, mid-sized business’ spending on R&D has risen by around 200% over the past 15 years, with investment now accounting for 30% of total private-sector R&D expenditure.
MYOB Executive General Manager – Enterprise, Kim Clarke, said that with their eyes firmly on growth, this segment of businesses and their position in Australia’s business ecosystem, shouldn’t be underestimated.
“Mid-sized businesses are incredibly ambitious and it’s their consistent push to be stronger tomorrow than they are today, that has seen a growing number benefit from year-on-year revenue increases and greater resilience in the face of difficult conditions.
“Underpinning their success is a relentless approach to innovation. These businesses recognise the benefits emerging technologies can bring to their operations and we know they’re committing substantial spend to realise them.
“With mid-sized businesses now accounting for around 30% of private-sector gross-value added and employment in Australia, the insights couldn’t be clearer – backed by the right conditions and with the constraints removed, the positive trajectory of these businesses could have a significant impact on the future of our economy.”
Navigating internal and external constraints
Despite their impressive performance so far, mid-sized businesses continue to face a number of internal and external limitations hindering their potential for further productivity and business growth.
Rising costs (47%), business or industry regulation (34%) and industry competition (33%) were called out by the business leaders MYOB polled as being the top factors impacting their ability to maximise their business’ potential.
While spend on innovation and R&D hasn’t wavered, The Bigger Picture Report shows mid-sized businesses continue to be hindered more by financial limitations than their larger counterparts. On top of balancing higher costs, access to more capital – particularly productivity-enhancing capital – is holding more of the segment back from pursuing their ambitions.
“This lack of available finance for new systems or machinery is the number one factor business leaders believe is hindering their productivity, and the ask for more support or action here from policy makers is coming through loud and clear,” said Kim.
“We can clearly see the impact mid-sized businesses are capable of making on our economy. We should be playing to their strengths and supporting their focus on productivity and innovation. If we do this, then watch them chase down their ambitions with full force.
“From our conversations with mid-sized customers and the insight this report has surfaced, there’s a solid consensus that government-led initiatives incentivising further capital investment in technology and in building a skilled workforce, will determine if – and by how much – this impact grows.”
In addition to capital and government-backed loans to help finance growth (74%), shoring up international trade prospects (81%), and training up their teams to fill critical skills gaps (70%) are also amongst the top actions business leaders believe would positively shape their success over the next five years.
“In a time where economic uncertainty remains high, it’s clear that mid-sized businesses are an important driver of sustainable economic growth. We need to create opportunities that enable these businesses to innovate and drive productivity growth further given the weight they add to both the broader business ecosystem and wider economy,” says Dr Angela Jackson from Impact Economics and Policy.
Powering the business ecosystem forward
Reinforcing their resilience and appetite for growth, an increasing number of mid-sized businesses are kicking off 2025 with higher revenue forecasts and stronger sales and work pipelines.
Sixty one percent of decision-makers surveyed believe their revenue will be up in 12 months’ time, and this is an increase of 9% on those who reported an increase over the previous year. Likely contributing to these expectations is the visibility they have of their sales volumes on the horizon, with the majority (61%) reporting they have more sales or work lined up for the first half of the year than usual.
“As mid-sized businesses gear up to deliver another strong performance in 2025, the broader business community is also set to benefit. Given their position in the business ecosystem, the success of this segment has known flow-on effects for the wider economy – from inspiring smaller businesses to move faster on technology, to challenging bigger businesses by adding to their competition,” said Kim.
“If mid-sized businesses are to take Australia’s economy to the next level, action to address the constraints holding them back can’t come fast enough.”
The Bigger Picture report can be downloaded here.
ENDS
For more information please contact
Collette Betts, collette.betts@myob.com
Joanne Tramontana, joanne.tramontana@myob.com
About The Bigger Picture Report
The Bigger Picture Report was created by Impact Economics and Policy on behalf of MYOB to show the impact and performance of mid-sized businesses in the Australian economy as well as analyse challenges, opportunities and the trajectory of the sector.
Survey methodology
The Bigger Picture Report combines MYOB data with industry and government insights to paint the picture of the mid-sized business landscape. These insights are from MYOB’s latest survey of mid-sized businesses, polling a representative sample of 515 business leaders and decision-makers (*with between 20-500 FTEs and $5m+ annual revenue) in Australia. Research for this survey took place from 6-30 January 2025 and was conducted by independent research agency, Dynata. Respondents were sampled randomly from the Dynata online panel and screened to ensure they met the qualifying criteria. Quotas were maintained on industry sector and business size/FTEs to ensure a reliable and diverse cross-section of business opinions from mid-sized businesses were obtained. Additional insights have come from Impact Economics.
About MYOB MYOB is a leading business management platform with a core purpose of helping more businesses in Australia and New Zealand start, survive and succeed. MYOB delivers end-to-end business, financial and accounting solutions direct to businesses employing between 0 and 1000 employees, alongside a network of accountants, bookkeepers and consultants. For more information visit myob.com or follow MYOB on LinkedIn.