#United States #Chicago #economic trends #Middle Market #RSM US LLP

RSM Redefines the Middle Market

In a groundbreaking update, RSM US LLP, a leading provider of assurance, tax, and consulting services tailored for the middle market, has redefined the boundaries of this sector. On February 4, 2026, the firm announced the expansion of the revenue range of the U.S. middle market from previously set limits to a new bracket of $30 million to $10 billion. This shift reflects the evolving scale, complexity, and economic implications of medium-sized enterprises in the U.S.

The necessity for this modern definition emerged through detailed analysis outlined in RSM's study titled "Redefining the American middle market for the modern era," along with complementary research encapsulated in "Managing complexity: A renewed imperative for the evolving middle market." These studies underline significant structural changes that have occurred within the economy, necessitating a re-evaluation of what constitutes the middle market today.

Understanding the Modern Middle Market

With an extensive history servicing middle-market leaders and significant research investments made over the past decade, RSM has identified approximately 125,000 firms employing around 50 million individuals within this category. Moreover, rapid advancements in technology adoption and consolidation, along with evolving capital structures, have driven these businesses toward unprecedented levels of operational sophistication.

Brian Becker, CEO of RSM's transatlantic partnership and managing partner at RSM US LLP, emphasized that the updated definition reflects the realities and challenges faced by businesses today, which operate at greater scales and must manage emerging risks that have arisen within the last decade. He stated, "Our new research provides deeper insights into the dynamic, growth-oriented businesses that constitute this vital segment of the U.S. economy. Understanding these insights is essential for navigating the complexities of today's rapidly changing business landscape."

The Economic Landscape of Today’s Middle Market

Joe Brusuelas, RSM's chief economist, further elaborated on the need for this new definition, stating that relying on outdated economic data could lead to misunderstandings about the current landscape. "Today’s middle-market companies face larger scales, higher fixed costs, and increased exposure to global volatility. Updating our comprehension of this segment is crucial for stakeholders, including investors, lenders, and policymakers."

To ensure relevance, RSM commits to reviewing this definition annually, using economic data to monitor ongoing structural changes and match insights with the sector's evolution. The new definition will enhance RSM’s US Middle Market Business Index methodology, among other research efforts.

Managing Complexity

In tandem with the new definition, RSM's research delves into the complexities facing modern middle-market businesses. It highlights findings from an analysis covering over 1,000 companies and reveals a distinct operating profile tied to factors such as consolidation, rapid technological growth, and transformations within the capital markets.

This evolving profile indicates that automation and digitization have altered productivity and introduced new operational layers requiring businesses to reassess their strategies and risk management frameworks. Key findings from the research showcase:

• - Sales per employee have more than doubled since 2009 due to automation and process enhancements.
• - Capital expenditures have plunged by 69%, reflecting a shift toward asset-light models and more prudent capital allocations.
• - Research and development spending has nearly tripled, highlighting innovative strategies that were once the domain of larger corporations.
• - Supply chain complexities have surged nine-fold, presenting new vulnerabilities and demanding enhanced risk management practices.

Scott Reamer, Senior Director at RSM, noted, "The current middle market looks vastly different from the one we observed post-financial crisis. Companies are more interconnected and technologically advanced than ever before. These structural changes advocate for a modern approach towards growth, risk management, and value creation."

Conclusion

RSM's commitment to navigating the complexities of the middle market is underscored by its Enterprise Value Roadmap (EVRM) framework, which identifies crucial levers for value creation—namely revenue growth, operational efficiency, and disciplined capital management. Organizations must now grasp these elements to bolster their competitiveness and long-term viability in a challenging environment.

For further reading, access the reports here - "Redefining the American middle market for the modern era" and "Managing complexity: A renewed imperative for the evolving middle market." RSM’s dedication empowers mid-sized companies to adapt and thrive amidst ongoing changes in the global economy.