Abstract
This chapter examines available evidence on the role of small and medium-sized enterprises (SMEs) in major home economies in developed countries. The comparative analysis is made based on the share of SMEs in the economy in terms of the number of enterprises, number of employees, value of sales and value added, on labour productivity, and on the role of job creation, innovation and exports.
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Notes
There are historically four waves in mergers and acquisitions in the United States. The first wave was around the turn of the century, the second wave in the late se, the third wave in the late 1960s and the fourth wave in the 1980s. See, Golbe and White, 1988.
Ministry of International Trade and Industry, Census of Manufactures (Tokyo, various issues). Small and medium-sized enterprises are defined as those with less than 300 employees.
Italian Central Institute of Statistics, Censimentao Generale dell’Industria, del commercio, dei servizi e dell’artigianato (Rome, various issues).
In France there were 795,370 “entreprises artisanales” (27.9 per cent of total enterprises) as of 1 January 1986; in Germany 1,363,000 persons were employed in “Handwerk” in manufacturing alone (19.6 per cent of total employment), producing the value of DM 159,659 million in sales (11.0 per cent of total sales) in 1987; and in Italy “artigianato” employed 2,730,635 persons (21.0 per cent of total employment) in 1,180,710 enterprises (41.5 percent of total enterprises) in 1981
There is some versatility between countries. The share of SMEs in the number of employees, sales and value added in manufacturing in Denmark, Japan, Ireland, New Zealand, Norway and Switzerland is relatively high, while in Australia, Finland, Germany, Italy and the United Kingdom, SMEs take relatively lower shares. In wholesale and retail trade in Japan, New Zealand and Norway, the share of SMEs is relatively high. The share of SMEs in wholesale trade in the United States is very high. In general, SMEs seem to be more important in wholesale and retail trade and other services than in manufacturing, as indicated by a higher share of SMEs in the former.
This is not a new phenomenon and was already observed by Schumpeter about half a century ago. In the case of retail trade, competition between firms comes not from additional shops of the same type, but from the department store, the chain store, the mail-order house and the supermarket, which are bound to destroy those pyramids. See, Schumpeter, 1950, p. 85.
In technology transfer by Japanes SMEs, 73.5 per cent of recipient firms are local SMEs and in case of large firms’ technology transfer, 52.8 per cent of recipient firms are local SMEs. See, Small and Medium Enterprise Agency, 1986, table 3-3-2-5, p. 193.
Small and medium-sized enterprises are defined as firms whose employees are fewer than 300.
Small and medium-sized enterprises here are those firms with fewer than 199 employees.
Ministry of Finance, Zaisei Kinyu Tokei Geppo (Monthly Report of Fiscal and Financial Statistics) (Tokyo, various issues). Small and medium-sized enterprises are defined as those with less than ¥100 million capital in primary and manufacturing and ¥10 million in services.
Small and medium-sized enterprises are defined as those with fewer than 499 employees regardless of the industry.
The decline of traditional large manufacturing industries such as steel, shipbuilding and textiles coupled with the result of rationalization in many industries, is largely responsible for decreases in employment in large firms. However, overall employment may remain constant due to the growth of services in all economies. Among the four countries for which data are complete in all sectors (Italy, Japan, Switzerland and the United States), three countries (Italy is the exception) show increased employment in services in both SMEs and large firms. In Italy, employment in large services firms declined but was more than offset by jobs created in services SMEs. The growth of services SMEs in Japan is substantial, accounting for three quarters of all increases in total employment in all industries between 1975–1986.
Data based on establishments.
Also see “The hyping of small-firm job growth”, The Wall Street Journal, 8 November 1988, p. B1, which quotes Birch’s figures.
Based on the data by Dun & Bradstreet, quoted in Nihon Keizai Shimbun, 8 September 1992, p. 9.
The same results hold in the ratio of innovation share to employment share.
“Happy mediums” and “West Germany’s shy wealthmakers exposed”, The Economist, 24 September 1988, p. 18 and 83-84.
Quoted in “Small businesses aren’t so little when it comes to role in exports”, The Wall Street Journal, 18 August 1989, p. 82.
General Accounting Office, “Efforts to promote exports by small non-exporting manufacturers”, 18 January 1983.
Also see “Little companies, big exports”, Business Week, 13 April 1992, pp. 70-72.
General Accounting Office, “Efforts to promote exports by small non-exporting manufacturers”, op. cit.
Data from Small and Medium Enterprise Agency, Chusho Kigyo Hakusho (White Paper on Small and Medium Enterprises) (Tokyo, Okura-sho Insatsu-kyoku, various issues). Products of SMEs (large enterprises’ products) are those of industries whose shipments are more than 70 per cent of the total shipments. Therefore, it does not reflect the actual value of exports by SMEs. Moreover, a decreasing share of exports of SMEs’ products does not necessarily mean an increasing share of large enterprise’s products. In fact, the share of exports of large enterprises’ products has been fairly constant, about one half. The share of exports of products which are not categorized in either case is increasing. Small and medium-sized enterprises here are defined as firms with fewer than 300 employees.
This study is based on SMEs in Ohio, United States.
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Fujita, M. (1998). Small and Medium-Sized Enterprises in Domestic Economies. In: The Transnational Activities of Small and Medium-Sized Enterprises. Springer, Boston, MA. https://doi.org/10.1007/978-1-4615-5663-3_4
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DOI: https://doi.org/10.1007/978-1-4615-5663-3_4
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