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The Role of the Small Business Within the Economy

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Small Business Management

Part of the book series: Springer Texts in Business and Economics ((STBE))

Abstract

This chapter examines the role of small business within the economy as well as government policy toward the small business sector. It provides an overview of the small business sector while considering the specific nature of management within a small firm and the policy responses available to governments. Small businesses typically make up the majority of firms within most economies. While the concept of a ‘typical’ small business may be difficult to define, most have few, if any, employees and are owned and operated by owner-managers who usually provide all the risk capital associated with the firm. Despite their numbers and relative importance to the economy, the level of attention and general understanding of the small business sector remains low. Academic research into small business management is less developed than for larger organisations. Government policy relating to small business can often be fragmented and problematic due to the lack of adequate understanding of the sector and its needs.

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Notes

  1. 1.

    GVA is defined as the value of outputs less the value of intermediate consumption and is an important factor in Gross Domestic Product (GDP).

  2. 2.

    Operating in the informal economy means that they are not formally registered for taxation.

  3. 3.

    An economic rent is the returns payed to an owner or factor of production in excess of the costs needed to bring that factor into production.

  4. 4.

    Churn over rate refers to the relationship between the number of new businesses entering the economy as compared to the number of existing business that exit.

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Authors and Affiliations

  1. University of Western Australia, Crawley, WA, Australia

    Tim Mazzarol

  2. Burgundy School of Business, Dijon, France

    Sophie Reboud

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  1. Tim Mazzarol
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  2. Sophie Reboud
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Mazzarol, T., Reboud, S. (2020). The Role of the Small Business Within the Economy. In: Small Business Management. Springer Texts in Business and Economics. Springer, Singapore. https://doi.org/10.1007/978-981-13-9509-3_1

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