Constraints on the Growth of Technology-Based Firms – Perceptions and Effects

Abstract

The failure of small firms to grow into large enterprises has been identified as a significant problem for the economy of the UK. This study examines the constraints facing IT firms in the Software and Computing Services sector in particular. Research was undertaken in the form of interviews examining firm attributes and reported constraints. No clear patterns emerged linking specific constraints with patterns of growth, but the importance of effective management was a common theme. Apparent anomalies in the responses at interview direct attention to the important and interesting question of the extent to which the “constraints” on firms’ growth are determined by entrepreneurs’ perceptions and interpretations of their firms and the environments within which they operate.

Keywords: Firm growth, firm attributes, constraints, entrepreneurs, perceptions

JEL Classification: D21, L23, L86, M13