The survival of small firms is thus dependent upon a series of factors not very creditable to our economic system; monopsonistic exploita­ tion of labour, imperfection of markets due to ‘irrational’ reasons, unemployment and the gambling preference of small entrepreneurs, with all the waste of energy attendant on the high ‘turnover’ of small businesses. — J. Steindl (1945), p. 61

During the Afghan and Iranian crises President Carter cancelled all speaking engagements except that to 2,000 entrepreneurs attending a White House Conference on Small Businesses. This is an indication of the esteem in which the small firm and its owner is now held by the White House. — Anne Reilly in Duns Review, 1980, p. 69

2.1 Introduction

In virtually every country in the world the small firm is, and has always been, the typical unit of production. Small firms, however defined, constitute at least 90 per cent of the population of enterprises but in many developed countries the two decades following 1945 saw a de­ cline in the proportion of total output produced by such firms.