Small Firm Sector

The Small-Firm Sector

Defining the Small-firm Sector

• EU definition of SMEs

– by number of employees

• micro enterprises

• small enterprises

• medium enterprises

EU SME definitions







– use of EU definitions in the UK







– use of EU definitions in the UK

• Size of the small-firm sector in the UK

Number of UK businesses, employment andturnover by size of enterprise (2002)

SME share of UK businesses, employment andturnover by industry (2002)

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

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1920 1930 1940 1950 1960 1970 1980 1990 2000

% The importance of small firms in the UK

Employment in manufacturing enterprises with fewer than 200employees as % of total employment in manufacturing enterprises

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10

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1920 1930 1940 1950 1960 1970 1980 1990 2000

%


The importance of small firms in the UK

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1920 1930 1940 1950 1960 1970 1980 1990 2000

%


Self employed as % of UK labour force

The importance of small firms in the UK


• Changes over time– growth in the service sector


– new working practices• flexible labour markets

• subcontracting


– role of government


• Changes over time– growth in the service sector


– new working practices• flexible labour markets

• subcontracting


– 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

• The growth of small businesses– the process of growth


Management role and style in thefive stages of a small business


• 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


• 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


• Small-firm policy in the EU

– historical background

– SME Action Programme

EU SME Action Programme


• 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

Small Firm Sector

Business

Transcript of Small Firm Sector