Open AccessToward Dynamic-Based Classification of SMEs
Author(s) -
Shaike Marom
Publication year - 2021
Publication title -
international journal of business administration
Language(s) - English
Resource type - Journals
eISSN - 1923-4015
pISSN - 1923-4007
DOI - 10.5430/ijba.v12n3p25
Subject(s) - small business , incentive , business , small and medium sized enterprises , point (geometry) , industrial organization , job creation , public policy , marketing , economics , market economy , finance , economic growth , labour economics , geometry , mathematics
Small and Medium-size Enterprises have been recognized worldwide for their contribution to the economy, employment and new job creation. Given the importance of small businesses to the economy, policymakers have put efforts in helping to boost small businesses by allocating incentives and support programs to those small businesses with high growth potential; rather than to the small business sector as a whole. However, common size-based classifications of small businesses capture the attributes of the business at a certain point in time, and thus, cannot identify those firms that are likely to grow. This paper offers a dynamic classification to help in identifying pro-growth small and medium-size enterprises, based on past and forward-looking indicators. Such dynamic classification could better serve public policy makers in a more precise allocation of scarce resources toward those small businesses with the highest likelihood to contribute to economic stability and growth.