The Uk Sme Sector
The UK SME sector and its relative importance to the economy
Kayleigh West
21st Feb 2012
Introduction
Small and medium-sized enterprises (SMEs) are the backbone of all economies and are a key source of economic growth, dynamism and flexibility in advanced industrialised countries, as well as in emerging and developing economies. (oecd.org)The committee of Bolton report (1971) believed that the health of the economy requires the birth of new enterprises in substantial numbers, they concluded that small firms can be extremely efficient, having the advantage of the commitment of the owner-managers, plus the ability in certain circumstances to exploit certain business opportunities better than their larger brethren. (Stokes & Wilson, 2010, p. 9)
There is no single definition of what an SME is; this is because of the wide diversity of businesses. The problem is because company size is related to the market it operates in, The Bolton report recognised that it may be appropriate to measure employees in some sectors but turnover may be more relevant in others, According to the Bolton report (1971) small firms are owner managed, independent and have a small market share, (Bruce M, 1999) Bolton supplemented the general qualities by more specific, quantitative measurements depending on the industry type, (Stokes & Wilson, 2010, p. 5)however according to the European Union the definition of SMEs are; a small enterprise has between 10 and 49 employees and has an annual turnover of less than 10million Euro, a medium sized enterprise has between 50 and 249 employees and has an annual turnover of less than 50million Euro. (Stokes & Wilson, 2010)There is a great issue with the definition of SMEs, it has been approached by many theorists and researchers such as Bolton (1971), Coyne (1983) and Curran and Stanworth (1984) and yet no satisfactory solutions have emerged. (Tonge, 2001, p. 6)
Small and medium sized enterprises are important to the economy as they make
Kayleigh West
21st Feb 2012
Introduction
Small and medium-sized enterprises (SMEs) are the backbone of all economies and are a key source of economic growth, dynamism and flexibility in advanced industrialised countries, as well as in emerging and developing economies. (oecd.org)The committee of Bolton report (1971) believed that the health of the economy requires the birth of new enterprises in substantial numbers, they concluded that small firms can be extremely efficient, having the advantage of the commitment of the owner-managers, plus the ability in certain circumstances to exploit certain business opportunities better than their larger brethren. (Stokes & Wilson, 2010, p. 9)
There is no single definition of what an SME is; this is because of the wide diversity of businesses. The problem is because company size is related to the market it operates in, The Bolton report recognised that it may be appropriate to measure employees in some sectors but turnover may be more relevant in others, According to the Bolton report (1971) small firms are owner managed, independent and have a small market share, (Bruce M, 1999) Bolton supplemented the general qualities by more specific, quantitative measurements depending on the industry type, (Stokes & Wilson, 2010, p. 5)however according to the European Union the definition of SMEs are; a small enterprise has between 10 and 49 employees and has an annual turnover of less than 10million Euro, a medium sized enterprise has between 50 and 249 employees and has an annual turnover of less than 50million Euro. (Stokes & Wilson, 2010)There is a great issue with the definition of SMEs, it has been approached by many theorists and researchers such as Bolton (1971), Coyne (1983) and Curran and Stanworth (1984) and yet no satisfactory solutions have emerged. (Tonge, 2001, p. 6)
Small and medium sized enterprises are important to the economy as they make
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