Smes

Topics: Business, Small business, Employment Pages: 8 (2617 words) Published: January 27, 2013
Small Business Report

Table of contents

Introduction........................................................................................................3

The small business in the UK economy.............................................................................................................3

Statistics..............................................................................................................4

How they impacted the economy...........................................................................................................4-5

Sectors..............................................................................................................5-6

Recession..........................................................................................................6-7

Post Recession..................................................................................................7-8

What is the government trying
to do to help small businesses?.........................................................................8

Conclusion..........................................................................................................8

References..........................................................................................................9

"To found a great empire for the sole purpose of raising up a people of customers may at first sight appear a project fit only for a nation of shopkeepers. It is, however, a project altogether unfit for a nation of shopkeepers; but extremely fit for a nation whose government is influenced by shopkeepers." —Adam Smith, The Wealth of Nations

In the UK, there are around 4.7 million businesses; 99 percent of these businesses employ fewer than 50 people. 13.7 million people are employed by small businesses that generate more than 50 percent of the UKs annual GDP. These small businesses are in charge of 84 percent of newly created jobs. It is the backbone of the UK economy. These statistics show how crucial they are domestically and internationally because of how much they contribute to the UK Economy therefore the economy relies heavily on them. There is no singular definition of a small business which is universally agreed upon; rather there exist quantitative and qualitative definitions which fill different roles, however it is largely the quantitative definitions which dominate the field. Quantitative definitions use numerical values in order to categorize and classify businesses, whereas qualitative definitions seek to do this by observing the power structures and connection frameworks. An example of a quantitative definition for a small business is: * Not more than 50 employees.

* A turnover of not more than £2.8 million
(Companies Act 1985)
An example of a qualitative definition is:
Enterprises where the manager is also the owner or a member of the owner family and decides short and long-term issues in the interest of his enterprise. While these two definitions provide examples of possible classifications a definitive answer is contentious, reflecting the fluid nature of the small business contemporarily; this has implications for the analysis of the small business in the sense of classification and perception. The small business in the UK economy

In the past decade, the percentage of the UK population that works went up by 3.2% between 1990 to 2000, which took the number to 27.7 million. After the 1970’s, in terms of their numbers and contribution to employment, small businesses have grown to be more and more important to the UK economy (Burns, 2007). This can be seen as a result of huge industries such as coal mining and ship building going into financial turmoil, which led to the high figures of unemployment in the 1970s and 1980s. On the other hand, this economic disorder led to improving the technological structure of companies. These technological developments represent a crucial dynamic to the...

References: Bolton, J. E., (1971) Report of the Committee of Inquiry on Small Firms, London: HMSO, London
Burns, P., (2007) Entrepreneurship and Small Business (2nd edition), London, Palgrave Macmillan
Curran J (1999) The Role of the Small Firm in the UK Economy: Hot Stereotypes and Cool Assessments, SBRT Research Report, May, Milton Keynes.
Fan, Q. (2003) Creating a conducive legal & regulatory framework for small and medium enterprise development in Russia a policy dialogue workshop, September 14-16, 2003
Kilkenny, M. (1999) Reciprocated community support and small town - small business success, Entrepreneurship & Regional Development: An International Journal, 11:3, 231-246
Newberry, D., (2006) The Role of Small- and Medium-Sized Enterprises in the Futures of Emerging Economies. [Online]
Storey D (1994) Understanding the Small Business Sector, Routledge, London.
Wynarczyk, P. (2011) SMEs: Evolution and Revolution Periods, Newcastle: Newcastle University Business School
Websites
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