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Sme Sectors Benefits To The Economy

The SME sector is said to make a significant contribution to employment; evaluate this claim by drawing on the literature, and discuss what other contributions are made to the economy by the SME sector.

Gov website says that for the purposes of SME 2006 statistics an SME is defined as any business that has less than 250 employees.

SME: small and medium-sized enterprises are defined by the European Commission as independent enterprises that have fewer than 250 employees, and an annual turnover not exceeding £34 million or a balance-sheet total not exceeding £29 million (new Recommendation 2003/361/EC adopted by commission on 6 May 2003). This revised definition came into force on 1 January 2005. Within this definition micro enterprises are categorised as having fewer than 10 employees, annual turnover/ balance sheet not exceeding £1.4 million and small enterprises as fewer than 50 employees, annual turnover/balance sheet not exceeding £6.8 million. Source: SBE
Small Business Europe http://www.smallbusinesseurope.org/en/basic210.html

http://www.springerlink.com/content/r003lh60015167j6/?p=5de28f1be3b341c298f70561ce8e9e1f&pi=4

http://web.ebscohost.com/ehost/pdf?vid=12&hid=116&sid=1f0ab11e-81b3-48b1-93e4-3f334a1dccaa%40sessionmgr103

"Entrepreneurship and innovation are central the creative process in the economy and to promoting growth, increasing productively and creating jobs" (DTI, 1998b:14-15) REF REF
Exports minus imports – wealth of information available on internationalisation of the SME sector – this is good for the economy because it boosts aggregate demand figure.

Innovation is good for the economy as it can lead to advancements in efficiency which boosts all components of aggregate demand. Innovation is also good for the economy as it can act as a stimulus for change. Innovation is the

Schumpeter, Joseph (1934). The Theory of Economic Development
Joseph Schumpeter defined economic innovation in 1934:[citation needed]
1. The...