Chapter 3. Zein-layered clays bio-hybrids
3.2 Synthesis and characterization of zein-layered clay bio-hybrids
3.2.3 Zein-CloisiteNa bio-hybrids assembled from zein
Renewed interest in small firms derives from changes in economic thought and has been given impetus by the particular policies pursued by the government, partly for ideological reasons, partly as a means of producing new jobs, and partly as a corollary of
‘supply side’ monetarist policies. However, there is a danger in placing too heavy an emphasis on the role of small firms in rebuilding the UK’s industrial base.
Figures from the DTI in 2002 showed that 45% of VAT registered businesses failed to survive the first three years. Storey (1982) had already shown that most small firms stay static or die. In his study of all the new manufacturing firms started in Cleveland, County Durham, and Tyne and Wear from 1965 to 1978, he found that only 774 survived out of 1,200.
Of the survivors, more than half still had fewer than 10 employees in 1982, and nearly three-quarters had fewer than 25. In fact, the probability of a new busi-ness employing more than 100 people after a decade was less than 0.75%. For every new job created by a small firm in these three counties over the 13-year period, four jobs were lost from large companies employing over 1,000 persons. Storey et al. (1987) found that in their survey of single-plant independent manufacturing companies in northern England, one-third of the new jobs were found in less than 4% of the new starters. Further research (Storey 1994) also showed that it is incorrect to assume that countries which have experienced the most rapid increase in new firm formation (measured in terms of increase in self-employment) are those which have experienced
the fastest growth of employment creation. The same survey also pointed out that investment in govern-ment training schemes for small-company entre-preneurs at the start-up or at later stages is not necessarily related to the future success of small companies. The evidence shows that success is more closely related to the original educational attainment of the business owner. In other words, it may be more important to improve the level of the UK’s general education as a whole, if small firms are to thrive.
For all these reasons, the net advantages of small firms may be less than is commonly supposed.
Nevertheless, small firms are able to find market niches, especially where economies of scale are not easily obtained, as in providing specialized items for small markets, and in developing products used as components by large firms. Also the movement towards a higher proportion of employment being in the service sector, where traditionally smaller firms have been dominant, suggests an increasingly impor-tant role for smaller firms in the UK economy. For example, a recent report has shown that UK-based SMEs performed relatively well over the period 1988–2001 as compared to large companies when measured in terms of growth in real value added, employment and profitability (European Commission 2002). However, in absolute terms there are still major gaps between small and large firms. For example, in the UK at the beginning of the new mil-lennium, the value added per occupied person (labour productivity) in small firms was still only 87% of the UK average as compared to 120% for large firms (TUC 2000).
Conclusion
Key points
■ Definitions of the small firm vary within and between countries.
■ Across all industrial sectors in the UK, firms with fewer than five employees account for around 90% of the total number of firms. However, such firms account for only around 23% of total employment and 15% of total turnover.
■ The small firm is increasingly seen by governments as a focus of new growth and employment opportunities.
■ Small-firm support has focused on three main areas: easier access to equity and loan capital, increased tax allowances and grants, and less government interference.
■ Banks provide the main source (59%) of external finance for small firms (via over-draft) in the UK, increasingly in the form of medium- to longer-term loans, though high exposure to such overdraft finance remains a problem in the UK.
■ Small firms in the UK see interest rate policy, general macroeconomic policy
and taxation policy as the governmental policies with most impact on themselves.
■ Low turnover is by far the most impor-tant single problem identified by small firms in the UK.
■ European policy towards SMEs is becoming increasingly influential with large-scale funds available to support a broad range of initiatives.
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You will also find up-to-date facts and case materials.
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