Bolton 20 Years on: The Small Firm in the 1990s

Researches the UK small business sector in order to update the landmark report of the government-appointed Committee of Inquiry on Small Firms, more commonly known as the Bolton Report of 1971. The Bolton Report was a problem-oriented analysis of this sector, focusing on the role of small firms in economic development, and providing international comparisons, as a basis for policy recommendations. Since then, and in part because of the report's influence, government policies have been developed to aid small business, and stimulate entrepreneurial activity and innovation. The next step is to research regional entrepreneurial activity, in order to ascertain the effect of potentially divisive regional policies on small business. The problems identified by small business owners remain relatively unchanged, according to surveys conducted by the Small Business Research Trust from 1984-1991. The Bolton Report focused on government burdens, and indeed, conclusions from the surveys show that small business owners are most concerned about costs, and that government taxation is still rated as their biggest burden. A review of small business taxation since the Bolton report finds that policy should promote efficiency rather than maximize employment -- as the Bolton Report had previously suggested -- since small firms do not tend to develop significantly, nor produce high levels of output. The relationship between the small business sector and the banks that finance them is analyzed, and a 'no secrets' relationship is suggested, to facilitate trust and manage risk. The previously overlooked resource of non-owning managers who tend to oversee operations once the small business has exceeded 20 employees is examined. Socioeconomic changes that will affect small businesses in the future include increasing fragmentation of the economy, the rise in the service sector, policy changes and, perhaps most importantly, the adoption of an enterprise culture in the UK. (CJC)