My Queue

There are no Videos in your queue.

Click on the Add to next to any video to save to your queue.

There are no Articles in your queue.

Click on the Add to next to any article to save to your queue.

There are no Podcasts in your queue.

Click on the Add to next to any podcast episode to save to your queue.

You're not following any authors.

Click the Follow button on any author page to keep up with the latest content from your favorite authors.

Growth Strategies

What to Expect from the Middle Market in 2019

Equipping workers with new skills is one of the ways middle market firms believe they can transform themselves
What to Expect from the Middle Market in 2019
Image credit: Shutterstock
Vice chairman of Deloitte LLP and the US Deloitte Private leader
3 min read
Opinions expressed by Entrepreneur contributors are their own.

 

If there’s a theme that captures how private and mid-sized companies may evolve in 2019, transformation rises to the top. To get the job done, leaders across the middle market are prioritizing employee skilling programs, M&A deal-making, and bold action against information security threats as key areas of focus for the next 12 months.

Equipping workers with new skills is one of the ways middle market firms believe they can transform their companies in 2019. In Deloitte’s most recent mid-market technology survey, 61 percent of corporate respondents say they plan to focus on employee reskilling to take advantage of new waves of innovation. This transformation is happening in areas such as the auto industry, where equipment manufacturers are retraining engineers in skills such as artificial intelligence (AI) and the Internet of Things (IoT) to supply the next generation of connected and autonomous cars. It’s also happening in healthcare, where medical workers are learning new forms of patient interaction such as online doctors’ visits.  

Change is here

In some middle market settings, companies are using gamification to provide training. Fifty-eight percent of respondents in our technology survey say they’re using experiential formats to help workers gain proficiency in cognitive technologies such as natural language processing.

Reskilling in these areas is part of a larger boom as global spending on AI and cognitive systems is expected to more than triple by 2022.

The prospect of new corporate combinations is another area that’s poised to transform the middle market this year. According to Deloitte’s 2019 M&A Trends report, nearly 90 percent of private equity (PE) leaders surveyed foresee an uptick in M&A deal flow in 2019. Respondents anticipate a significant increase in deals valued between $500 million and $10 billion, with executives predicting more mergers between technology and manufacturing firms than any other combination of industries. The optimistic outlook on M&A deals comes as PE firms sit on a record $1.14 trillion in dry powder for investments – a strong indicator of a potentially busy M&A cycle.

As in years past, cyber security is another key concern for the middle market. Managing cyber risk is the top technology priority over the next 12 months according to respondents in our mid-market technology survey. Meanwhile, half of private firms rank IT governance processes and principles among the top three concerns for their organizations.

The nature of work may be changing, the makeup of companies might look dramatically different in the year to come, and the sophistication of data breaches might present tough tests for middle market companies this year. But there’s an opportunity amid the challenges.

Private companies have the fundamentals in place to take on big, transformative changes as they uncover new opportunities in the marketplace in 2019.

More from Entrepreneur

Jason's expertise and experience can help you with storytelling, motivation, and pitching your business to media.
Jumpstart Your Business. Entrepreneur Insider is your all-access pass to the skills, experts, and network you need to get your business off the ground—or take it to the next level.
Are you paying too much for business insurance? Do you have critical gaps in your coverage? Trust Entrepreneur to help you find out.

Latest on Entrepreneur