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SMEs are not the same as large firms

December 18th, 2019 by Graham Attwell

Much of my work at the moment is focused in two different areas – the training and professional development of teachers and trainers for the use of technology for teaching and learning and the use and understanding of labour market data for careers counseling, guidance and advice. However as data increasingly enters the world of education, the two areas are beginning to overlap.

This morning I received an email from the European Network on Regional Labour Market Monitoring. Although the title may seem a little obscure, the network, which has been active over some time, organises serious research at a pan European level. Each year it selects a theme for research, publications and for its annual conference. Over the last year it has focused on informal employment. Next year’s theme is Small and Medium Enterprises (SMEs) which they point out can be viewed as perhaps the most vibrant and innovative area of the European economy. However, when it comes to researching and understanding SMEs it is not so easy

A number of European or national statistics exist to analyse SMEs’ but they generally use the same categories as for large firms and are, in general, constructed from a large firm perspective or in any case not from a framework based on SME characteristics. Many academic papers focusing on SMEs show that they cannot fully be understood using the same categories as with large firms. The general idea is that firstly, SMEs are same as large ones, just smaller. Secondly, the assumption that they will grow up to become Midcaps, then large firms, is incorrect. Torres and Julien (2005) start their article explaining that “Most, if not all, researchers in small business have accepted the idea that small business is specific (the preponderant role of the owner-manager, low level of functional breakdown, intuitive strategy, etc.)”. A 2019 French publication directed by Bentabet and Gadille tackles the issue of SMEs focussing on their specific “social worlds”, their “action models and logics”, while elsewhere the influences of institutional logics and multi-rationalities of SMEs have been considered. The entry of social worlds highlights the great diversity of micro-enterprises and SMEs, which often makes it difficult to analyse them. As a counterpoint, specific knowledge of these companies is required because they are at the heart of the debates on flexibility, labour market dynamics, skilled labour shortage and disruptions in the vocational training system.

SMEs will be the focus for the next Annual Meeting of the Regional Labour Market Monitoring to be held in September 2020 in Sardinia

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