SMEs, Entrepreneurship and Innovation

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Small firms are playing an ever-increasing role in innovation, driven by changes in technologies and markets. Some spin-offs and high growth firms are having remarkable success. However, the broad bulk of small firms are not capitalising on their advantages. This book explores how government policy can boost innovation by improving the environment for entrepreneurship and small firm development and increasing the innovative capacities of enterprises. Policy findings and recommendations are presented in three key areas: embedding firms in knowledge flows; developing entrepreneurship skills; and social entrepreneurship.  In addition, country notes present statistics and policy data on SMEs, entrepreneurship and innovation for 40 economies, including OECD countries, Brazil, China, Estonia, Indonesia, Israel, the Russian Federation, Slovenia and South Africa.

SMEs, Entrepreneurship and Innovation is part of the OECD Innovation Strategy, a comprehensive policy strategy to harness innovation for stronger and more sustainable growth and development, and to address the key global challenges of the 21st century.



United Kingdom

The United Kingdom is the only country that has documented, twice, the scale of public funding for SMEs. The first, in 2002, showed that, including the provision of tax relief, total public funding was approximately GBP 8 billion. Of this, GBP 2.3 million was the result of small firms paying the lower 20% rate of corporation tax. A later estimate by the National Audit Office provided a lower figure by excluding the taxation component, but found that all expenditure on training had been omitted from the initial estimate.


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