Enterprise and Small Business Principles
Development of the service sector
The adoption of fragmentation strategies by larger enterprises is not supported by Hakim (1988a). She showed that comparatively few enterprises sought to exchange employees for the supposed flexibility of self-employed workers. Nonetheless, there would seem to be strong evidence to suggest that the nature of consumer demand has changed. Instead of being content with standardised mass produced goods, consumers have increasingly sought tailor-made goods and, in particular, individual services. For example, the number of financial service businesses in the UK doubled from 80,000 in 1980 to 160,000 by 1993. Similarly, between 1994 and 2003 business services, in general, increased by 314,000 to 500,000. This represents a 63% increase. Researchers such as Keeble et al. (1992) and Bryson et al. (1997) have also argued that the reason why businesses such as management consultancies and medical, health, and IT providers have grown is due to systemic changes in demand among business to business (B2B) services and consumer services for households and personal consumers.
Such businesses, particularly smaller-sized businesses, may have been able to exploit these sectors because there exist few opportunities for the development of economies of scale given that consumption is often at the point of purchase. Moreover, for Keeble et al. (1992) and Bryson et al. (1997) small service businesses have other, perhaps more intangible, competitive advantages: ‘for small business service firms the most important competitive advantages are “personal attention to client needs”, “specialised expertise or products” and “established reputation”’ (Bryson et al., 1997: 352).
