ABSTRACT
The rediscovery of the importance of small firms a decade ago, and the acknowledgement of this size of enterprise as an important part of any national industrial effort, was a welcome balancing of an earlier excessive preoccupation with large firms. In retrospect, however, much of the debate during this period was unprofitably concerned with new firm formation and growth rates, and with ‘picking winners’ in an attempt to measure growth and to describe the attributes of those firms with rapid growth rates (Birch, 1979: Fothergill and Gudgin, 1979; Storey, 1982; Storey and Johnson, 1987). From academic and policy viewpoints, the major shortcoming of this approach was that it tended to view the small firm as a ‘black box’ in the sense that firm performance was observed, and ‘best practice’ management advocated, yet there were few policy prescriptions on ways in which new proactive measures could improve the ‘natural’ rate of small firm formation and growth. This ‘hands-off’ approach of many writings during the early 1980s probably reflected the political reality that any advocation of a higher profile industrial planning strategy on behalf of government would not be taken up in the political climate that existed then, and which continues to exist.
