Small and medium size enterprises: innovation and growth in the UK and Poland

This work highlights and compares some of the more recent studies and information regarding SMEs in Poland and the UK. In particular it focuses on the SME relationship with innovation, which can be a key concept in addressing questions of competitive advantage and increasing economic output. There is support for the assumption that medium and fast growth firms are more likely to innovate. This study considers aspects affecting SME growth such as age of organisation, institutional support services, and barriers to growth. Other identified variables relating to the likelihood of SME innovation include; type of activity and the constraint of capital in selecting an activity, differences between older and newer firms and the effect of the firm’s size. Firm size influences are then looked at in relation to initial capital, personal background of entrepreneurs, education of entrepreneurs, the privatisation programme, enterprise lifespan and the possible effects of the informal sector. Recent analysis on obtaining better innovation grouping by the use of alternative industrial groupings is identified, as well as the use of cluster analysis to identify potential innovators by reference to their input characteristics. Further factors that are looked at include the effect of greater intermediation in a region, knowledge transfer from public R&D and Universities, the effect of incubators and technology centres, R&D, and growth in technical consultancy. The two countries’ SME sectors are compared with regard to size, structure and growth. Importance and growth are measured in terms of number of enterprises, their output and the employment they provide. The disaggregation of SME activity, using the European Classification of Activities, gives an initial identification of some sectors where SME operation is most prevalent, is changing dramatically or appears likely to change.