Small Enterprises and Their Role in the Current Economic Based Modern System

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Small Enterprises and Their Role in the Current Economic Based Modern System

The Focus of the Project

This research study will be focusing on the role that small enterprises play in the current economic based modern system. From a worldwide point of view, it is known that small enterprises have a very important role in the development of the economy. Small businesses are a primary source of creating employment and increasing the outputs, not just in the developing countries but also the developed countries (Davis and Haltiwanger, 1996, p. 297). For example, 63.2 percent of the labour force of the United States has been employed in the small and medium enterprises. Small businesses make approximately 99 percent of all the business units and employ greater than 80 percent of the entire workforce of the country (Hakansson and Johanson, 1993, p. 15). Small enterprises are also known as the base enterprises as they are the core of the industrial foundation. Small businesses are not just important in the US; but they are important in most of the European countries. Small businesses account for greater than ninety five percent of the entire establishments of businesses in the world (Sleuwaegen and Micheline, 2002, p. 12).

Small businesses play a crucial role in industrialisation process and in the economic growth of the developed and developing nations. Therefore, the small business influences the role not just by enduring the development which is also constrained because of the insufficient finance (Sydow, 1992, p. 14).

This research study will answer the question about the role that small enterprises play in the current modern economic system. This research study will focuses on the role that small business play in the modern economic system. This research study has added to the existing literature and has also made a contribution to the economic sector. It furthermore focuses on the benefits and limitation that small businesses impose on the current economic based modern system.

Sources

This research study will include literature from the past studies on the small businesses and the role that they play in the current economic based modern system. The literature will be gathered from the electronic libraries, articles, books, previous researches, etc.

The primary literature sources were electronic databases that included ProQuest, EBSCO Host, Gale Power Search, Emerald, SAGE, and several additional Internet-based resources. ProQuest also provided dissertations from University of Phoenix and other universities. Electronic and printed books and publications from a variety of writers and scholars enhanced the outcome of the literature review.

Small Enterprises and Economic Development

Development of the economy creates a place for the growth and development of enterprises of all the sizes of establishment (Berry and Mazumdar, 1991, p. 2). The size of an enterprise dependent on various factors in which two major factors are technology and market. If the market has small activities in the economy, the small businesses will become viable. Size of market is calculated by the level of real income and the ...