Small Firms in UK Essay Example | Topics and Well Written Essays - 3000 words

Small Firms in UK - Essay Example For these reasons, small business industry is critical to UK economic development and social cohesion. They provide a medium for retirees and other potential unemployed persons to have gainful employment and contribute fully and independently to wider society. Small businesses have been contributing to employment and manufacturing since the 1960s. The increasing rates of self-employment have been attributed to; a parallel rise in rates of unemployment (e.g., retirees, unspecialised graduates); reductions in levels of unemployment benefits and government incentives; and the increasing importance of technology in the information service industry. In the early 1970s there were changes to the industrial structure across the globe of industrialised nations. Initially, the value of the small business decreased, but by the 1970s the structure of manufacturing saw dramatic changes and small firms began to provide better quality of products and services than larger corporations, particularly in areas of rapid technological changes (e.g., electronics). Over time, small firms began again to add value to the UK economy, and among many small businesses their rates of employment increased. So that there has been a significant shift in industrial structure back to the small firm amongst industrialised nations (Landstrom, 2005).The shift brought within environmental opportunities to be exploited by entrepreneurs with their innovations and business developments. Political discourse began to focus upon entrepreneurship, receiving support from Margaret Thatcher in the mid 1980s and strong policy was introduced to support small businesses and entrepreneurship. The research interest in small business increased during this period, and social scientists began to contribute to research directions and understandings. This has led to a strong multi-disciplinary approach to small business research in the UK today. (Landstom, 2005). During the 1990s the interest become more about growth orientated established businesses. Tony Blair took a much more narrow and focused approach to reforms as compared to Thatcher, targeting technology-based firms and socially inclusive entrepreneurship as ways to bring 'life' back to weak regions of industry (Landstrom, 2005). The present government provides most of the funding for research into small business dynamics and the contributions of such entities to the growth and strength of the UK nation. However, this also biases the areas that research goes into, what interests the government and this could counter advances in knowledge and processes. However, funding from the government does require the use of empirical investigative techniques, ethical considerations and a policy focus to research endeavours. With the consolidation of small business research there was a great support for entrepreneurship.As industrialised nations shift manufacturing sectors to less developed natio ns to lower the costs of production, the likelihood of unemployment has increased. This global shift in industry structure has fostered employment opportunities for some through small businesses (AusIndustry, 2006). Current trends of redundancy for older workers, such as those in middle management positions have seen some retirees adapting self