Government Regulations towards Small & Medium Enterprises Essay

Government Regulations towards Small & Medium Enterprises - Essay Example The hypotheses are then tested against the observed characteristics of entrepreneurs and small business owners in the real world. However, there are a number of problems with this approach that have been discussed as follows:- 1. Some regions are more favored than others at establishing successful small businesses and entrepreneurs and hence their economic development is more successful. The question of whether this is due to characteristics in the population or due to certain aspects of the environment and infrastructure which enable potential entrepreneurs to exploit their skills and opportunities more easily, remains, at this stage, an open one. For example, research undertaken for Scottish Enterprise (2), after concern with low participation rates in entrepreneurship, showed that a complex series of factors contributed to low participation rates in Scotland. For example, the historical dependence of the population on a limited number of large employers coupled with inward investment (North Sea oil) had produced a 'dependency culture', that is, that people were used to depending on large employers for employment. Thus, the thought of going into business on their own account did not come easily to them. Yet other factors were important as well such as lack of finance. This example shows why participation rates might be different in particular regions for varying complex reasons. 2. Concern has been expressed at the existence of latent entrepreneurial talent. For example, why are there so few successful female entrepreneurs Again this remains open question which appears to have no simple solution but rather is caused by a complex combination of social and economic reasons. Little research has been conducted specifically on these groups in the UK, although a study carried out by the David Deakins and Ram (3) with African - Caribbean entrepreneurs suggests that motivations among this minority group in the UK consists of a combination of positive (pull) and negative (push) factors. Positive factors are associated with the attractions of entrepreneurship and negative factors are associated with limited opportunities in the inner-city and deprived urban environments. 3. Attention has focused on the role of networks in successful entrepreneurial development. For example, some research suggests that inter-firm networks contribute to successful entrepreneurship as discussed below. Start-ups (4): We know that a high proportion of new firms fail within three years of start - up. For example, in the UK, 30 percent of new firms cease trading by the third year and 50 percent by the fifth year. In addition, there is only a small proportion that grow to employ 50 workers. One of the factors is the potential loss of control faced by the entrepreneur as the firm grows. New small firms and entrepreneurs that are successful are predominantly located in the South - East in the UK. This suggests that the environment and infrastructure is at least as important as the characteristics of the entrepreneur. It is also likely that the development of inter-firm networks is more advanced in the South - East than in other regions of the UK. Inter -Organizational Networks (5): The inter-organizational