SMALL BUSINESSES AS A RESEARCH SUBJECT - SOME REFLECTIONS ON KNOWLEDGE OF SMALL BUSINESSES AND ITS EFFECTS ON ECONOMIC-THEORY

Most economists agree in their view of small and medium-sized enterpri ses, or small businesses (SMEs), as a marginal scientific subject. The y may go so far as to ignore them, either because they think these eco nomic units do not lend themselves to conventional economic studies - studies which, for instance, take into account the ''sacred cow'' theo ry of economies of scale - or because they see them as being not reall y different from big businesses. However, at least a few economists ha ve recognized, first, the many characteristics differentiating SMEs fr om big firms, and second, their increasing importance in terms of numb ers and job creation within economies. Among these few, Schumpeter was one of the first to show the importance of entrepreneurs and SMEs as the main variable of change in an economy. Simon and Lucas also explai ned the difference between small and big firms through the differing a bilities required by managers to run them. Penrose looked at the quest ion from another point of view by highlighting the interstices taken u p by SMEs to fulfil needs that cannot be fulfilled by bigger units. Cr itics of the theory of economies of scale showed that such economies m ay be offset by a number of diseconomies, thus justifying the efficien cy of many SMEs. More recently, Mills and Schumann suggested that SMEs compensate for their lack of economies of scale by their production f lexibility, particularly in today's turbulent economy. The limits of t raditional economic theory are clearly demonstrated by the fact that i t does not take account of all these theories, concepts and ideas. It thus neglects a number of important economic phenomena, including the persistence and current expansion of SMEs. Consideration of such pheno mena may lead to the development of a new economic theory based on the concepts of instability and contingency, together with the behaviour of entrepreneurs and small firms, thus tending to contradict, in parti cular, the concept of equilibrium in conventional economic theory.