Defining the Small-firm Sector

• EU definition of SMEs

– by number of employees

• micro enterprises

• small enterprises

• medium enterprises
 Defining the Small-firm Sector
• EU definition of SMEs

– by number of employees

• micro enterprises

• small enterprises

• medium enterprises

– use of EU definitions in the UK

 Defining the Small-firm Sector
• EU definition of SMEs

– by number of employees
• micro enterprises

• small enterprises

• medium enterprises

– use of EU definitions in the UK

• Size of the small-firm sector in the UK

The Small-firm Sector in the UK
• Changes over time
– growth in the service sector

– growth in niche markets

– new working practices

• flexible labour markets

• subcontracting

– growth in self-employment as an answer to

unemployment
The Small-firm Sector in the UK
• Changes over time
– growth in the service sector
– growth in niche markets
– new working practices
• flexible labour markets
• subcontracting
– growth in self-employment as an answer to
unemployment
– role of government
The Small-firm Sector in the UK
• Changes over time
– growth in the service sector
– growth in niche markets
– new working practices
• flexible labour markets
• subcontracting
– growth in self-employment as an answer to
unemployment
– role of government
• International comparisons
 Survival, Growth and Failure of
Small Firms
• Competitive advantage and small firms
– flexibility
– quality of service
– production efficiency and low overheads
– product development and innovation
• Problems facing small businesses
– selling and marketing
– funding R&D
– management skills
– less ability to gain economies of scale
Management role and style in the
five stages of a small business
Management role and style in the
five stages of a small business
Management role and style in the
five stages of a small business
Management role and style in the
five stages of a small business
 Survival, Growth and Failure of
Small Firms
• The growth of small businesses (cont.)
– the entrepreneur
• motivation and desire to succeed
• educational attainment
• management experience and business knowledge
– the firm
• the age of the business
• the sector of the economy
• legal forms
• location
 Survival, Growth and Failure of
Small Firms
• The growth of small businesses (cont.)
– strategy
• workforce and management training

• use of external finance

• product innovation

• export markets

• use of professional managers

– conditions for success of small businesses

 Government Assistance to the
Small Firm
• Small-firm policy in the UK
– small business start-up
• types of support
• financial assistance

– small business growth

• financial assistance
• corporate venturing
• national 'business angels'

– training programmes
 Government Assistance to the
Small Firm
• Small-firm policy in the EU (cont.)
– policy initiatives

– financial instruments
• Structural Fund

• European Investment Bank

– research and technology development

– vocational training programmes

– other programmes