INTRODUCTION

This paper examines the contribution to manufacturing employment change of small and medium sized enterprises (SMEs) in Northern England – an area which has experienced persistently high rates of unemployment for more than fifty years. The region has also been a recipient of almost every initiative introduced by national government to create employment, and whilst there have been periods of modest success the relative position of the Region has remained virtually unchanged during this half century.

In this paper a small business is defined as having less than 200 employees, although it is recognised that the problems and priorities for a well established business with 180 employees will differ markedly from those of the two-man business. Yet this heterogeneity is characteristic of the small firm sector and the main distinction to be made in these pages will be on the basis of age, i.e. between the new and the well established small business.

The first section of this paper documents the importance of SMEs in the Regions of the United Kingdom, but it then concentrates upon changes in employment in the three counties of Durham, Cleveland and Tyne & Wear which in 1978 contributed 78% of manufacturing jobs in Northern England. Having outlined the data sources to be used, the remainder of the paper is devoted to a detailed study of employment change, with particular emphasis upon the performance of SMEs.