12. the small firm sector
TRANSCRIPT
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The Small-Firm Sector
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Defining the Small-firm Sector
• EU definition of SMEs
– by number of employees
• micro enterprises
• small enterprises
• medium enterprises
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EU SME definitions
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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
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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
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Number of UK businesses, employment andturnover by size of enterprise (2002)
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Number of UK businesses, employment andturnover by size of enterprise (2002)
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Number of UK businesses, employment andturnover by size of enterprise (2002)
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Number of UK businesses, employment andturnover by size of enterprise (2002)
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Number of UK businesses, employment andturnover by size of enterprise (2002)
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SME share of UK businesses, employment andturnover by industry (2002)
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SME share of UK businesses, employment andturnover by industry (2002)
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SME share of UK businesses, employment andturnover by industry (2002)
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SME share of UK businesses, employment andturnover by industry (2002)
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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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0
10
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30
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50
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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0
10
20
30
40
50
1920 1930 1940 1950 1960 1970 1980 1990 2000
%
Employment in manufacturing enterprises with fewer than 200employees as % of total employment in manufacturing enterprises
The importance of small firms in the UK
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0
10
20
30
40
50
1920 1930 1940 1950 1960 1970 1980 1990 2000
%
Employment in manufacturing enterprises with fewer than 200employees as % of total employment in manufacturing enterprises
Self employed as % of UK labour force
The importance of small firms in the UK
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0
10
20
30
40
50
1920 1930 1940 1950 1960 1970 1980 1990 2000
%
Employment in manufacturing enterprises with fewer than 200employees as % of total employment in manufacturing enterprises
Self employed as % of UK labour force
The importance of small firms in the UK
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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
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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
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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
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• The growth of small businesses– the process of growth
Survival, Growth and Failure of Small Firms
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Management role and style in thefive stages of a small business
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Management role and style in thefive stages of a small business
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Management role and style in thefive stages of a small business
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Management role and style in thefive stages of a small business
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Management role and style in thefive stages of a small business
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Management role and style in thefive stages of a small business
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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
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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
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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
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Government Assistance to the Small Firm
• Small-firm policy in the EU
– historical background
– SME Action Programme
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EU SME Action Programme
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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