THE EMPLOYMENT GENERATION POTENTIAL OF MATURE SMES IN DIFFERENT GEOGRAPHICAL ENVIRONMENTS

Using a longitudinal database, this paper compares the employment perf ormance over the 1979-90 period of mature SMEs in three contrasting ge ographical environments-i.e. London, outer metropolitan locations in t he South East, and remote rural locations in northern England, The per formance of SMEs in London locations is shown to be inferior to that o f similar firms in remote rural locations, but this is found not to re sult from them having a weaker performance in output terms. Whilst it is the most rapidly growing firms which have the greatest employment g eneration potential in all locations, London-based SMEs are more likel y to achieve growth in ways which minimise the number of additional wo rkers employed directly by the firm. These urban-rural differences can be explained by the different 'strategies' for business growth adopte d by managers in responding to the various opportunities and constrain ts existing in different geographical environments.