ABSTRACT
The debate on the value of small fi rms to the economy was fundamentally ignited by the publication of Birch’s (1979) research on job creation in America between 1969 and 1976. While the study has been criticized for its methodology, the work nevertheless generated a reaction that caused a reevaluation of the belief that supporting big fi rms was the best way to grow an economy. Birch’s work offered evidence that 66 percent of all jobs generated during the research period were created not by large organizations but by small businesses. The notion of small fi rms being scaled-down versions of large fi rms was also challenged, an argument that Storey and others (1987) supported since they highlighted that a number of important distinctions exist between small and large fi rms, including the fi nding that there was a much greater variability in the rate of growth and in the profi tability of small fi rms than found in large fi rms. With the spotlight increasingly turning to small enterprises as a potential stimulant for growth in an economy, questions arose as to how more businesses could be created and what types of people establish them. Such inquiries in turn brought about the blossoming of small business research.
