In search of the drivers of high growth in manufacturing SMEs

Nicholas O'Regan*, Abby Ghobadian, David Gallear

*Corresponding author for this work

Research output: Contribution to journalArticlepeer-review

Abstract

Though considerable attention in the extant literature has been devoted to growth and performance of firms, there is a dearth of research on high growth firms. Furthermore, the majority of literature in this area focuses on large firms while research on high growth small firms is underdeveloped. This paper investigates the drivers of high growth in manufacturing SMEs. Following a number of focus group interviews with six managing directors of manufacturing firms, a number of drivers of high growth were identified and investigated in a sample of 207 manufacturing SMEs. The results of this study indicate that high growth firms place a greater emphasis on external drivers such as strategic orientation, their operating environment and the use of e-commerce compared with firms having static or declining sales. The analysis shows that high growth firms compete largely on the basis of price. While high growth firms have increased their sales by over 30% during the past three years or longer, it is questionable if manufacturing firms can sustain their competitive advantage without recourse to greater research and development, and innovation in the longer term.

Original languageEnglish
Pages (from-to)30-41
Number of pages12
JournalTechnovation
Volume26
Issue number1
Early online date29 Jun 2005
DOIs
Publication statusPublished - 1 Jan 2006

Keywords

  • E-commerce
  • Environmental perception
  • High growth
  • Innovation
  • Organisational capabilities
  • Ownership
  • SMEs
  • Strategic orientation

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