The Development of New Manufacturing Firms

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Abstract
Dr. Colin M. Mason is a Lecturer in the Department of Geography at the University of Southampton, England. The paper presents the results of a follow-up study, undertaken in mid-1983, of 52 new manufacturing firms in South Hampshire, all started since 1975, and which were originally interviewed in 1981. Almost one-quarter of these firms had closed prior to the follow-up survey. As a group the panel of surviving firms is characterised by increases in turnover, floorspace and employment and improvements in the quality of premises, capital stock and technological sophistication. However, changes in other dimensions of business development -notably management structure, markets and customers -tended to be quite limited. The surviving group is also characterised by the emergence of a small number of rapid-growth enterprises: these 'high fliers' in the panel have made the greatest contribution to employment generation and economic development. It is concluded that policy would achieve more substantive results by shifting from its present indiscriminate assistance to the small firm sector towards a more selective approach which attempts to encourage the creation of greater numbers of rapid growth firms.