GROWTH-ORIENTED SMES IN UNFAVORABLE REGIONAL ENVIRONMENTS

In this paper the research focus is on 'counterfactual' cases of growt h-oriented SMEs in peripheral regions of Britain (Scotland, Northern E ngland, Wales and Merseyside). These firms are systematically compared to three control groups, made up of growth-oriented SMEs in the South East, slow-growth firms in the Periphery, and slow-growth firms in th e South East. Apart from some performance measures such as profits and exports, three key characteristics of the firms are analysed. These a re the extent of competition in the markets served, levels of innovati on and R & D, and work force and labour market characteristics. The an alysis is conducted for manufacturing firms and professional and busin ess services separately. Firms of the research group stand out against the other firms in the sample as businesses with a very favourable R & D input-output ratio and greater propensity for providing a combinat ion of formal internal and external training programmes. Possible expl anations for these findings are suggested. The results provide conside rable grounds for questioning the strong link between firm and environ ment implied by regional development theory and for greater emphasis o n the ways in which organizations may counteract and overcome comparat ive environmental disadvantages.