ABSTRACT
This chapter deals with the changing demands and requirements in the subcontracting markets that are likely to have a considerable effect on these attributes. It argues that there is a highly unbalanced distribution of flexibility options and necessities to adapt as well as of chances and risks within the new subcontracting networks. Small firms are currently regarded as the new hope for achieving full employment. However, a closer look reveals that at least in the FRG the favourable trend in small business employment does not apply to all small firms. Many existing small firms have experienced job losses and the total increase of employment in the small firm sector is primarily based on newly founded businesses in the service sector. Small firms are usually unable to undertake such efforts when they call for high investments in equipment or require systematic, highly differentiated or long-term research.
