GROWTH-ORIENTED SMES IN UNFAVORABLE REGIONAL ENVIRONMENTS

In this paper the research focus is on 'counterfactual' cases of growth-oriented SMEs in peripheral regions of Britain (Scotland, Northern England, Wales and Merseyside). These firms are systematically compared to three control groups, made up of growth-oriented SMEs in the South East, slow-growth firms in the Periphery, and slow-growth firms in the South East. Apart from some performance measures such as profits and exports, three key characteristics of the firms are analysed. These are the extent of competition in the markets served, levels of innovation and R & D, and work force and labour market characteristics. The analysis is conducted for manufacturing firms and professional and business services separately. Firms of the research group stand out against the other firms in the sample as businesses with a very favourable R & D input-output ratio and greater propensity for providing a combination of formal internal and external training programmes. Possible explanations for these findings are suggested. The results provide considerable grounds for questioning the strong link between firm and environment implied by regional development theory and for greater emphasis on the ways in which organizations may counteract and overcome comparative environmental disadvantages.