Academic journal article Journal of Small Business Management

Small Business Growth: Intention, Ability, and Opportunity

Academic journal article Journal of Small Business Management

Small Business Growth: Intention, Ability, and Opportunity

Article excerpt

Introduction

Small businesses are well recognized and acknowledged worldwide as vital and significant contributors to economic development, job creation, and the general health and welfare of economies, both nationally and internationally (Morris and Brennan 2000). The small business sector represents a statistically significant proportion of the world economy. For example, small businesses represent 99.7 percent of all employers in the United States (Small Business Administration 2000) and 96 percent of all businesses in the nonagricultural industries in Australia (Australian Bureau of Statistics 1999), and in the European Union, only one percent of businesses have more than 50 employees (Department of Trade and Industry 2000). Indeed, Mazzarol (2000) observes that "at the commencement of the new millennium small businesses are being heralded as the engine of economic growth, the incubator of innovation, and the solution to decades of persistent unemployment. The fulfillment of the enormous potential of the sector has been a consistent theme since the commencement of the industrial revolution" (1). There appears to be little doubt that small businesses do make a large net contribution to the creation of new jobs compared with large businesses (Birch 1979). Consequently, most sides of the political spectrum seem to view small businesses as somewhat of a panacea to heal and to rejuvenate economies and societies (Gray 2000).

The policy interest in the small business sector arises out of its capacity to generate and to increase employment at local levels. After almost two decades of employment generating programs and initiatives, policymakers increasingly are becoming aware of the economic and social limitations of initiatives that rely too heavily on the small business sector as a whole (Gray 2000). Indeed, it now is accepted widely that most new jobs come from a relatively few small businesses (Stanworth and Curran 1976; Burns and Dewhurst 1996; Glancey 1998).

Consequently, in recent times there has been a substantial shift in interest and emphasis in the field of small business toward a focus on those with a pro-growth orientation. This shift has been evident in policymaking, the application of small business support, and related research commentaries (Bridge, O'Neill, and Cromie 1998). The argument proposed is that if small business support resources are limited, as is frequently the case, then the way to maximize results is to apply those finite resources only to businesses that meet criteria such as the demonstration of growth and employment generation potential. Therefore, there is currently considerable interest in understanding what factors contribute to small business growth and how these businesses can be reached and then to support resources targeted accordingly.

This paper reviews the literature associated with small business growth, intentions, abilities, and opportunities with a view to identifying a schema or framework that would assist with the identification of pro-growth small businesses. In addition, it reports the findings of a study that researched businesses located in the municipality of Maribyrnong situated in the west of the Melbourne City region, Australia. The key focus of the study was to obtain a more comprehensive understanding of factors and characteristics that contribute to a pro-growth small business orientation. The paper concludes with discussion relative to the challenges confronting the range of stakeholders involved in the small business sector and considers policy ramifications.

Small Business and Growth

Growth in relation to small businesses represents a complex matter and is multidimensional in scope and character (Scase and Goffee 1989). It embraces a convergence of owner-manager ambitions, intentions, and competencies; internal organizational factors; region-specific resources and infrastructure; and external relationships and network configurations (Storey 1994; Glancey 1998; Mitra and Matlay 2000; Shaw and Conway 2000). …

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