Ohio State report tracks why some midsize companies outpace others

Doug Farren

A new report from The Ohio State University outlines why some midsize companies grow faster than others.

“The Early Investment Advantage: How Fast Growers Drive the U.S. Middle Market” was compiled by Ohio State’s National Center for the Middle Market (NCMM), which this year marks its 15th anniversary.

Housed in the Fisher College of Business, NCMM is a clearinghouse of information and resources about midsize companies and their outsized impact on the economy, said Doug Farren, NCMM executive director.

While organizations such as the U.S. Chamber of Commerce and the U.S. Small Business Administration provide resources for companies large and small, NCMM focuses exclusively on raising awareness of the nation’s roughly 200,000 midsize companies, Farren said.

“We’re just trying to figure out, how do we make more noise and get more attention so that people can start both understanding and then appreciating the unique opportunities and challenges that these businesses have?” he said. “In our research, we’ve proven that it’s not the same as the large and small [businesses]. It’s pretty unique, the space that they operate in, so therefore they need a little bit different focus and attention.”

The purpose of “The Early Investment Advantage” report is to provide business leaders with data to guide decisions going forward, Farren said.

“It’s always our goal for a leader or an owner to read this report and say, ‘Oh, OK, this raised some interesting questions. I’d like to ask our team, Hey, where do we stand with these things? Are we consistently investing in AI? Are we consistently thinking about how we grow our products and services to drive revenue growth?’” he said. “If nothing else, it raises these questions to the forefront, and it does it in a way that’s based on data.”

“The Early Investment Advantage” encompasses 15 years of longitudinal research, tracking the same subjects over an extended period. The report includes 44 survey cohorts and more than 41,500 responses from business executives.

One of the report’s findings is that companies that consistently invest in their business operations grow faster than those that do so sporadically or not at all. Companies that continue to reinvest amid economic downturns and other challenging circumstances tend to flourish in the long run, Farren said.

“Take the pandemic as a great example,” he said. “When everybody got impacted by that and everything shut down for close to a year, these were the companies that were still thinking about how they can invest back into their business, whether it’s in training people or building new facilities.”

The report also finds that midsize companies that focus on innovation, product development and adopting new technologies can maintain a competitive edge, Farren said.

“I think one of the big things that’s happening is that middle market companies realize that they have to use AI in some way, but many of them are still struggling to find the right place to deploy it,” he said.

“They have to rely on maybe hiring a partner to help them with that or some type of an outside consultant because they might only have two or three people in their IT department, and they’re probably busy running the operation.”

To bring awareness to the issues that the report raises and to mark NCMM’s 15th anniversary, Farren and other representatives met with policymakers, business leaders and stakeholders in Washington, D.C., and Philadelphia during National Middle Market Week. Before the trip, the National Day Calendar organization issued a proclamation officially recognizing the observance in the first week of October each year.

NCMM’s meetings included a fireside chat in Philadelphia with entrepreneur David Adelman, an Ohio State alumnus. Adelman is CEO of Campus Apartments and a partner in the Philadelphia 76ers. Farren and NCMM representatives also met with the U.S. Chamber of Commerce and the National Association of Manufacturers to discuss future collaborations.

“I would say at the end of the day, we accomplished our ultimate goal, which was to raise the visibility of the middle market,” Farren said. “There are a lot of people talking about it, a lot of people seeing our LinkedIn posts and a lot of people that we haven’t necessarily worked with that now know who we are and have expressed an interest in partnering in the future.”

For more information about NCMM and “The Early Investment Advantage” report, visit the organization’s website.