A Review of Academic Research Undertaken In Relation To Small and Medium Sized Enterprises Executive Summary There is no precise definition of small and medium enterprises (SMEs) as different countries define the term the business cluster in their own ways…
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In the study, United Kingdom’s SMEs have been observed. It has been identified that SMEs also have a role to play in the economy of the UK. However, there are underlying challenges and problems that the country’s SMEs face which need to be addressed by the government and other stakeholders involved. The paper intends to identify the current academic research into small and medium sized enterprises and the major issues faced by these firms. It also tries to present the role of SMEs in the UK. The paper will try to provide a brief summary of the overall scenario at the end and will provide recommendation based on the challenges that the SMEs in the UK face so that significant improvements in the SMEs can be introduced and better opportunities created. Table of Contents 1 Executive Summary 2 Introduction 4 Critical Review into Current Academic Research 5 Challenges of SMEs 7 Role played by SMEs in the United Kingdom 8 Conclusion and Recommendation 12 References 14 Introduction Small and medium-sized enterprises (SMEs) are those firms that do not have any subsidiary and are independent in nature thus employing a certain number of employees. The number of employees may be different in different countries. In European Union, the limit set for employing the employees has been set to 250 for SMEs. However, certain countries lay down the limit of employing 200 employees. The use of the financial assets is also evident in order to define SMEs. A new European definition of SMEs came into existence in the year 2005. The new definition offers increase in the financial upper limits and therefore it states that the turnover of medium-sized enterprises must not be more than EUR 50 millions. Similarly, the turnover of small enterprises must not be more than EUR 10 millions and for the micro firms the turnover must not go above EUR 2 million. Consequently, the balance sheet of the medium enterprises must not surpass EUR 43 millions. The balance sheet of small and micro enterprises must not go above EUR 10 million and EUR 2 million respectively (OECD, 2005). The SME sector comprises a wide range of firms such as recognized conventional family businesses that utilize nearly hundreds of workers. The SME sector also makes use of “survivalist” self-employed workers functioning in unorganised micro enterprises (International Institute for Sustainable Development, 2004). The main aim of the paper is to identify the role of the SME in the economy of the United Kingdom. The study will try to focus upon the current academic research on SMEs. Theories on SMEs will be identified and the role of SMEs in an international context as a mechanism for job creation, innovation and long term growth will be studied in detail in the sections below. Critical Review into Current Academic Research Small and medium-sized enterprises can avail innumerable behavioural benefits in comparison to their larger counterparts in the process of innovation. However, it has been identified that they also face certain material disadvantages. The problem they face has been evident in the process of developing suitable network of contacts with outside sources of both mechanical and technological expertise as well as advice (Rothwell & Dodgson, 1991). It is quite difficult to measure the importance of SMEs. However, it is a well known fact that small and medium enterprises are considered as the basis of most of the economies, generally in relation to influences on employment as well as
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“A Review of Academic Research Undertaken in Relation to Small and Essay”, n.d. https://studentshare.org/macro-microeconomics/1394124-a-review-of-academic-research-undertaken-in.
This research paper addresses the importance of small business in the international contexts, mainly in relation to their roles in job creation, innovation and long term growth. This paper chooses UK as an example for how efficiently that small businesses play its roles and affect the economy of the country.
The goal of this research is to see what contemporary authors have to say about the major risks faced by small and medium enterprises as they entering international trade. Theoretical frameworks related to the question are considered.
SME access to formal finance is an attractive possibility; and they have become competitive in domestic and international markets, and are more likely to grow further in future. The Small-Scale sectors add adequately to other aspects of socio-economic activities like reduction in inequalities of income, product diversification, isolated expansion of small scale industries, and relation with the other sectors of economy.
However, latest evidence advises that internationally active SME small and medium enterprises (characterized here as companies with 500 or less workers, the delineation is broadly utilized in industrialized countries) emerge in large figures and the production of an significant task of this customary considering (eg, OECD, 1997; Rennie, 1993; Rose and Quintanilla, 1996).
Globalization and its technological development aspects have been fundamental factors to trade, especially to the global trade where involved parties may be from different geographical regions. Communication for product description and establishment of terms of trade towards a transaction’s contract establishment is easier, faster, and cheaper.
2. In 2008, the European Union implemented the Small Business Act for Europe 3. The same act contributed to the improvement of European Union small and medium enterprises. 4. The act increased innovative and creative competitiveness in the small and medium enterprise market.
But times have changed with the globalisation regime multinational enterprises have made a distinctive mark on the local markets as well. While on the one hand this affected the economic factors of the region or country, on the other the SMEs started realising the need for pressing changes in the management of different aspects of the enterprise.
It is a business whose head count, or turn over falls below certain specified limits. The profits made by a SME are quite low, but due to the large number of SMEs in the market, the overall contribution of a small scale business to the over all GDP is quite significant.
arious success factors are identified in addition to government support such as leadership and management skills, organizational culture and technology. After considering the three approaches to research methodology, it is decided that a mixed-method would be suitable because