Small businesses in rural areas: Evidence of their role and success in North Yorkshire

Abstract

This study investigates the role and success of small businesses in North Yorkshire, setting them firstly in context within the UK as a whole and the region, then in a more in depth analysis of the characteristics of a sample of small businesses (less than 10 employees) from the Harrogate and Ryedale Districts of North Yorkshire. The phenomenon of the growth in size and significance of the small business sector has been part of economic life in this country in recent decades, and is one of the possible pieces of evidence of a regional economic resurgence. The growing importance of small businesses, in terms of their numbers, is undoubtedly a feature of the new economic landscape of the 1980 ' s and 1990 ' s .Some traditional preconceptions are challenged, for instance, previous studies suggest that new firm foundations in rural areas are not stimulated by economic recession, as normally expected, and studies suggest the growing significance of embeddedness and networking, aspects which are not important to traditional economic theory. The research in North Yorkshire provides evidence to support the existence of a new economic landscape. The research describes the current economic climate in North Yorkshire in terms of wealth indicators, employment and VAT registrations and deregistrations, which underline the relatively healthy circumstances of the county. In the second part of the study, based on a survey of small businesses, the particular characteristics of small businesses, including their location, their longevity and reasons for their establishment are examined. The typical small business was found to be a 'niche ' type service, established on the outskirts of a village or small market town, typically in home premises, established there for an average of around 11 years, and set up after voluntarily leaving employment, not redundancy. Many of the founders were qualified and a moderate level of technology was used in the business. There was firm evidence of local embeddedness and informal networking, though little or no evidence of agency assistance and formal networking, such as membership of business associations. The various characteristics were exhaustively cross - tabulated to further determine the characteristics of the sampled firms. Finally, the results of the sample survey were compared and contrasted with previous studies in the field of small business characteristics, particularly recent studies of small businesses in rural areas, and the results generally conformed to the patterns - there is a new economic landscape where countless small businesses play a small but significant role, perhaps a more static role in North Yorkshire than is commonly supposed.