Research and analysis

SMEs: enablers of success and economic rationale for government intervention

Analysing the current issues faced by small to medium-sized enterprises and the rationale for government intervention.



This paper provides an economic analysis of the main enablers of success for small to medium-sized enterprises (SMEs). It reviews the obstacles SMEs face in relation to 3 clusters:

  • internal capacity and capability - including skills and innovation
  • external environment - including access to finance, exports and government procurement
  • vision of the business owner - including growth ambitions and use of business support

It also presents the theoretical arguments and empirical evidence of market failures across these clusters, providing the economic rationale for government intervention to support SMEs.

The paper provides the economic analysis that underpins government policy in this area.

Published 7 December 2013