Britain’s hidden growth companies: the invisible middle

When the Chancellor sets out the Budget on 28 October, the usual fight over tax, spending and investment will grab the headlines. But the sharper question is quieter: which businesses actually drive growth in Britain, and which ones get missed when everyone is hunting for the next flashy startup?

The government has said it wants more investment outside London and more support for companies that create jobs. John Healey has already announced a £150 million British Business Bank fund for high-growth firms in the North, plus a Northern 500 initiative for ambitious mid-sized businesses. Ministers also want to double the number of UK unicorns. None of that is trivial. But it does leave open the question of how government and investors decide who counts as a growth business in the first place.

One answer is the “invisible middle”: profitable, ambitious companies that may employ dozens or hundreds of people, bring in serious revenue and still never become household names. They sit in sectors such as manufacturing, engineering, professional services, logistics, construction, healthcare and retail. They may not want a billion-pound valuation. They may just want to open another site, buy better equipment, or grow their workforce. That is still growth, even if it does not come with a headline-friendly story.

The problem is that capital is getting more concentrated. UK equity deal numbers fell from 8,057 in 2021 to 6,197 in 2025, while the biggest deals took a larger share of the pie. The British Business Bank said the ten largest fundraisings made up 23% of all smaller-business equity investment in 2025, the highest share since 2020. AI is a big reason: AI companies took 44% of all equity investment in UK smaller businesses in 2025, even though they accounted for just 26% of deals.

No one is arguing against AI or ambitious tech businesses. Britain does need companies that can scale internationally and create new industries. But there is a danger in letting “growth” become shorthand for rapid scaling, big funding rounds and a possible exit. SMEs account for 60% of private-sector employment and 51% of turnover. At the start of 2025, they employed 16.9 million people and generated an estimated £2.8 trillion in turnover. That is not a side story.

The more useful test is simpler: what can a business actually contribute? The piece points to older, less glamorous businesses as a reminder that profitable companies in parking, rental cars, cleaning, plumbing and flooring helped build the capital for bigger moves later on. Britain’s economy depends on those kinds of firms too — the ones in industrial estates, business parks and high streets, not just the ones with a slick pitch deck.