Entrepreneurship, Small and Medium Sized Enterprises and Public Policies

Abstract

Governments throughout the world now recognise the important role in eco-nomic and social welfare played by smaller enterprises. In countries such as the United States and the United Kingdom there has been a striking change over the past forty years: In the 1960s small scale enterprise was equated with technological backwardness, managerial conservatism and modest economic contributions. This contrasts with the current view that, whilst many small firms do fit the 1960s stereotype, the sector also contains dynamic and innova-tive enterprises that collectively make a considerable contribution to economic well being (Acs, Carlsson and Karlsson, 1999). The magnitude and nature of this contribution continues to be a subject of discussion amongst scholars (Storey, 1994), but governmental awareness of the role of small enterprises has risen sharply.' Governments can facilitate or impede this contribution and this paper reviews public policies towards SMEs in developed -OECD -countries. It seeks to review the contribution that such policies and programmes have made in those countries. A key focus is on methodologies for assessing the impact of policies. Committee, I was confronted with these issues on many occasions and the paper clearly stems from that experience. 'For example European governments such as Sweden and the Netherlands have produced policy documents on this subject for the first time. Ministry of Economic Affairs (2000). Another illustra-tion, this time from the US, is Audretsch's (2002) observation that policy to promote SMEs became politically bi-partisan in recognising that small businesses were the major source of new job creation in that country.