Small firms and economic development: research, policy and practice

Abstract

This paper is a summary of the text of a keynote presentation delivered to delegates at the Ninth Annual Small Business and Enterprise Development Conference on 23rd March, 1999. With no real change or reduction in sight for the 17 million European Union citizens who are currently unemployed, a major concern of the European Commission is to develop policies which will encourage and foster employment opportunities. However, a significant problem, especially for the long‐term unemployed, is to ensure that they are equipped with up‐to‐date skills and knowledge to meet the challenges facing the European economy in the 21st century. It is generally accepted that small and medium‐sized firms have a major contribution to make to both economic development and, in turn, reducing unemployment. SMEs demand a skilled and flexible workforce and the European Commission recognises the need for policies which facilitate the development and continuous updating of workforce skills. Current European Union initiatives recognise the importance of integration and interdependency across member states but also recognise, and indeed emphasise, the role and contribution of local initiatives. These initiatives are enshrined in the European Employment Strategy which is founded upon four key priorities; employability, entrepreneurship, adaptability and equal opportunities. The creation, development and implementation of policy is based upon sound analysis which necessarily demands high‐quality applied research. This is an area in which academic institutions, in particular, can, should and do make a significant contribution. Currently, there is a need for further research across a broad spectrum of initiatives ranging from basic research covering topics such as enterprise demography through to broadening definitions of entrepreneurship and enterprise. A significant proportion of this work is, and will continue to be, supported and coordinated by the European Commission. Information sources describing the fundamental requirements and needs are available on the Internet.