Growth and performance of small and medium sized enterprises in rural peripheral locations

Abstract

Since the 1970s the number of small firms in the UK has risen, but at temporally and spatially uneven rates. These trends have heightened interest in the role of local economies in shaping small firm growth and performance. This thesis considers the growth and performance of small and medium sized enterprises (SMEs) based in rural peripheral locations in the UK. In measuring this, quantitative survey work was undertaken in rural core as well as rural peripheral localities, with the former acting as a benchmark for comparison. lJtilising returns from standardised postal questiormaires both the performance of the agricultural and non-agricultural business sectors can be compared. By contrasting the performance of both sectors the distribution of existing public sector funds aimed at rural local economic development (LED) is called into question. There is little support for the notion that farm diversification will contribute in any meaningful way to LED. When non-agricultural SMEs in rural peripheral localities are compared with enterprises of a similar age and standard industrial classification (SIC) code in core localities, few significant spatial variations are apparent in business strategy and structure. The main problem for rural peripheral locations would appear to lie not with the firms they already have, but rather the ones which are not present, and in particular their relative structural weakness of fewer medium sized manufacturing companies. When government SME policy is examined, the institutional proliferation and increased government spending which occurred during the 1980s did little to solve this structural weakness. It is contended that a key need for SMEs based in rural peripheral localities is to transcend restricted local markets and the main barriers, and possible solutions to, this process is drawn out in the concluding sections.