ABSTRACT
Since the late 1960s, the United Kingdom, in common with most other countries of the European Community, has experienced a significant resurgence in the numbers of small manufacturing and service firms, both absolutely and relative to large corporations (Baroin and Fracheboud 1983, Greffe 1984, Keeble 1985a). This resurgence is undoubtedly due chiefly to a substantial increase during the 1970s and 1980s in the rate of new, independent business formation (Gudgin 1984). Thus the total number of UK new firm births in production industries (chiefly manufacturing) rose each year between 1980 and 1983, for example, from 14,487 to 18,962, or by 31% over this period alone (Ganguly 1984). Various explanatory theories which may account for this striking trend are currently under debate, including recession-push theory, technological change theory, and theories based on the impact of rising real incomes, rising energy costs, government initiatives, and even deliberate large firm fragmentation policies (Keeble 1985b, Storey 1982, 1984, Shutt and Whittington 1984). This paper concentrates on technological change theory, arguably one of the three most convincing explanations, the others being recession-push and income growth theory.
