Research on Small Firms & Innovation Professor Bruce Tether

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(My publications in this area)

Over the last twenty years, politicians and other policy-makers have paid increasing attention to small firms and entrepreneurs, as sources of innovation, wealth creation and employment generation. This raises many interesting issues. For instance, what - if any - evidence underlies the significance attached to small firms and entrepreneurs as sources of innovation, wealth creation and employment generation? What sorts of innovations do small firms introduce, and how do these compare with the contributions of large firms? (i.e., Schumpeter I, Schumpeter II, and beyond). With employment creation, what are the respective roles of small and large firms in employment creation, and not just in terms of the quantity but also the quality of the jobs created?

In Europe (including the UK), there are hardly any examples of the extremely fast growing companies that have grown into giants within a few years. Yet these firms arise in the United States - Microsoft and Intel being obvious examples. Why is this? What are the key differences between Europe and the US in terms of encouraging (and blocking) this form of entrepreneurship.

Also, how do these patterns relate to the changing structure of the economy and organisation of work? Services are becoming more important, and in most services economies of scale do not exist to the extent that they do in manufacturing, thus encouraging service provision by smaller rather than larger firms. There is also greater outsourcing in the modern economy, and perhaps much of the growth in small firms may be accounted for by the growth in outsourcing of secondary (i.e., low value added) activities by large firms.

Although we have learnt much about the role of small firms in the economy in the last twenty years, our answers to these and other questions remain incomplete.

Publications

I have published several papers in relation to small firms and innovation. These mainly derive from research I undertook (including that for my doctoral dissertation and a study for the European Commission) between 1990 and 1998:

B. S. Tether (2000), 'Small Firms, Innovation and Employment Creation in Britain and Europe; A Question of Expectations', Technovation, 20.2 (available as CRIC Briefing Paper No. 2, University of Manchester and UMIST).

B. S. Tether and S. Massini (1998) 'Employment Creation in Small Technological and Design Innovators in the UK during the 1980s', Small Business Economics, 11.4, 353-370. (Also available as CRIC Discussion Paper No. 10)

B. S. Tether (1998) 'Small and Large Firms - Sources of Unequal Innovations?', Research Policy, 27.7, 725-745. (Also available as CRIC Discussion Paper No. 11)

D. J. Storey and B. S. Tether (1998a) 'New Technology Based Firms in Europe: An Introduction', Research Policy, 26.9, pp 933-946.

B. S. Tether and D. J. Storey (1998) 'Smaller Firms and the Development of Europe's High Technology Sectors - A Framework for Analysis and Some Statistical Evidence', Research Policy, 26.9, pp. 947-971.

D. J. Storey and B. S. Tether (1998b) 'New Technology Based Firms in Europe: Policy Issues', Research Policy, 26.9, pp. 1037-1057.

B. S. Tether (1997) 'Growth Diversity Amongst Innovative New and Small Firms: An Interpretation', New Technology Work and Employment, 12.2, pp 91-107.

B. S. Tether, I. J. Smith and A. T. Thwaites (1997) 'Small Firms and Innovation in the UK: The SPRU Innovations Database Revisited', Research Policy, 26.1, pp 19-32.

B. S. Tether and D. J. Storey (1997) 'New Technology Based Firms and Industrial Renewal: Evidence from the United Kingdom', Wirtschaftspolitische Blätter, 44.5, 415-425.

I. J. Smith, B. S. Tether, A. Thwaites, J. Townsend and P. Wynarczyk (1993) 'The Performance of Innovative Small Firms: A Regional Issue', Chapter in P. Swann (ed.) New Technology & the Firm, Routledge, London, pp 54-82.

Email: Bruce.Tether[a]mbs.ac.uk