Small firms are important and becoming more so. In Australia, as in many other OECD countries, over the last 20 years, small firms have steadily increased their share of total private sector employment. For example, by June 2004 in Australia, there were around 1.27 million non-agricultural small firms, a number that had doubled in the previous 20 years (ABS, 2002). Around 40 per cent of employees now work in small firms in Australia and the proportion is similar in the UK and Europe. However, when considering the capacity of small firms, it must be noted that in Australia, for example, some 56 per cent of these small firms have no employees. Of those that do, around a third have between one and four people (AMP.NATSEM, 2005: 6). Moreover, very few small firm owners wish or desire their firm to grow. For example, David Birch’s work in the US (Birch and Medoff, 1994; Birch et al., 1995) suggests only a very small proportion of small businesses will ever grow and similarly, David Storey’s (1994) work suggests this is also the case in the UK...