ABSTRACT
This chapter deals with the currently limited knowledge of factors affecting the establishment and performance of the small firm sector, defined in manufacturing as having less than 200 employees. It provides a consideration of the role of small firms in leading economic development at a local or regional level. The chapter argues that an examination of current research on performance questions in small business and partly to questions of both policy and institutional capacity, using the example of economic development at a local or regional level. It contains a number of articles nominally on small firms written by reputable British economists better known for their work on industrial concentration and particularly on the role of large firms. The shortage of detailed empirical work by economists on the UK small firms sector is serious because it has enabled those with an ideological commitment to small businesses to exert a disproportionate influence over public policy at a local and national level.
