Growth attributes – closing the GAP in Family-SMEs

SMEs represent 99 per cent of all enterprises, 67 per cent of the total number of employees and 58 per cent of value added (European Commission, 2015: 3). Many SMEs can be defined as family firms. Depending on the definition of family firms as many enterprises as 50–95% can be qualified as family firms in Denmark (Bennedsen & Nielsen 2014). Due to the substantial value-added contribution made by SMEs, (including) family firms, the development of SMEs is thus crucial to the European economy, and Business media and policy-makers have focused intensely on small firm growth in EU (Story 2011) and also in the US (Nicholls-Nixon 2005). Both at EU and national levels further initiatives have been planned to improve the conditions for entrepreneurs and SMEs and to promote innovation and growth. One of the declared aims in the EU programme “Horizon 2020” is “Innovation in Small and Medium-sized Enterprises (SMEs)” to enhance the growth opportunities present in the EU SMEs. Most initiatives focus on creating better framework conditions for SMEs. However, research shows that growth is hampered by a number of internal factors. Many SMEs often lack the important internal attributes for growth pointed out in theory and empirical studies, which means that there is a gap between theory and practice when it comes to growth attributes in SMEs. This paper provides an enhanced understanding of whether gap-filling between theory and practice in family-SMEs is possible and whether gap-filling will actually stimulate growth. The findings are based on a large-scale research project involving 24 Danish family-SMEs, which completed a learning and development process over a period of three years. The aim of the project was to examine whether such a process which focused on a combination of some of the most important growth attributes pointed out in theory and empirical studies could close the gap between theory and practice and whether – if this was possible – it would actually stimulate growth and value creation. The study is now in the last part of the third year and will continue to run a year from now. However, preliminary findings can be derived from data showing some interesting results on both the possibility and potential barriers of closing the gap and also some positive results on the value creation.