Medium-sized Industrial Firms Research Articles

Agricultural Change and Rural America

Rural America is known worldwide for its productive farms and agricultural abundance. Less well-known are the rural businesses that service America's farms, supplying inputs, buying output, and providing consumer goods to rural families. Even less well-known are the 70,000 small and medium-sized industrial firms that are located in rural communities. These businesses have slowly increased in number over the past half century as the farm population has dropped by two-thirds, the rural nonfarm population has grown slightly, and the national population has almost doubled. This article examines the role of agricultural change in rural decline and recommends two possibilities for expanding economic activity in rural communities.

Innovation can be taught

This paper summarizes the results of an extensive programme on stimulating industrial innovation in the Netherlands (the Project Industrial Innovation, Pii). Over five years (1980–84) 155 small and medium-sized industrial firms were taught by nearly 60 management consultants on how to innovate. The results in December 1984 were very positive: 71 percent of the companies have formulated businessplans for innovation; 21 innovations were introduced on the market; 76% of the companies stated that they had learned enough to go on with the process of innovating. This last result was questionable, because of its subjective nature. In December 1985 a study was carried out to investigate the long-term effects of this programme. The number of firms with businessplans had grown to 83 percent; the number of market introductions had increased to 43; the learning effect was up to 88 percent. This time it was possible to do some empirical observations which validated these results. The study also shows that innovations are not produced without considerable efforts. Nearly all companies encountered bottle-necks. The most influencial bottle-neck is management capacity. This (lack of) capacity is described in more detail by the participating management consultants. The quality of key personnel, inadequate project management and different management visions on innovation are mentioned by them. The paper shows the distribution of these bottle-necks among the different types of innovation. The exact influence of these bottle-necks remains undiscovered. The overall conclusion of the evaluation is that in spite of these bottle-necks innovation can be taught to small and medium-sized firms.

Een model voor de voorspelling van de invloed van investeringsbeslissingen op de ontwikkeling van de onderneming

This paper presents an econometric model for the purpose of forecasting simultaneously the time paths of a firm's plant, sales, debtors, capital disposal (own and borrowed), costs of various kinds, creditors, liquidities, profits and total investments, as functions of four exogenous variables (investment in plant, disuse of parts of the plant, wage rate and writing-off) and a few predetermined endogenous variables. More specifically, the consequences of alternative investment projects for financing are investigated. The equations for „explaining” items of the profit and loss account are quite good, but those for „explaining” items of the balance sheet appear to be less satisfactory. The model relates to small and medium-sized industrial firms operating on many small orders and not holding stocks (for instance, service industries) where wages are less than 60% of the out-of-pocket expenses.