TABLE OF CONTENTS Utopia: 'The ideal state is small and the inhabitants few'
(Lao Zi)
SMEs (sometimes referred to in this chapter as small firms) are defined in this chapter as firms with fewer than 500 employees. In the literature, SMEs are variously classified based on a wide range of criteria including number of employees, sales turnover, size of capital assets, etc. The most popular criterion is the number of employees (NOE) on a company's payroll. Most national accounting systems would define SMEs as those with NOE within the range of 1 500. These may be further subclassified as micro with NOE < 5; small-sized 5 ? NOE < 20; and medium-sized 20 ? NOE < 500. The sub-classification may be further modified on the basis of industry sector. For example, in the manufacturing sector the NOE of a small-size firm may be in the order of 200 as compared with about 20 for a similar category in the services sector.
The SME sector is generally recognized as a window of opportunity for rejuvenating mature industries, creating new and innovative markets, and achieving rapid economic growth through employment generation and wealth creation in all economies. The availability of the Internet and web technologies provides unique advantages for SMEs to build effective global infrastructures in at least three ways:
Internet-based infrastructures are relatively cheap; requiring significantly reduced capital investments over proprietary ones.
They provide an ever converging and rich environment for effective business networking and interorganizational process management.
They provide...
