A Critical Research Handbook
Edited by Lester Lloyd-Reason and Leigh Sear
Chapter 2: Doing Business: The Nature of Global Trading
Alan Griﬃths, Stuart Wall, Carsten Zimmermann and Ronald Klingebiel Introduction: context and overview For the purposes of this chapter, small and medium-sized enterprises (SMEs) are deﬁned as in the EU, namely as consisting of ﬁrms employing less than 250 employees, with ﬁrms having less than 50 employees being regarded as ‘small’ and ﬁrms having 50–249 employees being regarded as ‘medium’ in size. The economic environment within which such SMEs operate has been subject to accelerating change over the past half century, including signiﬁcant sectoral shifts in the composition of national economies combined with the increasing ‘openness’ of the global economy, sometimes caricatured as ‘shrinking space, shrinking time and disappearing borders’. Such changes have had important eﬀects on the strategic behaviour of SMEs as they adjust to a context in which value chains are increasingly reconﬁgured, not least in terms of geographical location, by multinational enterprises and even by SMEs themselves. Prahalad (1999) paints a vivid picture of a progressively ‘discontinuous competitive landscape’ under the forces of globalisation, with the established boundaries of industrial and service sectors shifting as technologies converge and new forms of organisational and institutional arrangements emerge. There is broad agreement on the merits of devising policies to enhance the contribution of SMEs to global trading, since it is widely recognised that SMEs are under-represented in the global economy. For example SMEs typically contribute some 50 per cent of GDP in the developed economies and some 60 per cent of total employment,...
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