Variations in the number of SMEs reflect changes in the structure as well as the ownership of business and industry in general. Much of the increase in SME registrations in the EU in the 1990s reflected the downsizing and restructuring of large companies. Previously ‘internalised’ services and processes were moved out of companies focusing on their ‘core’ business. Similarly, in transition economies, privatisation and restructuring have led to the creation of new small firms. Therefore, small enterprise development policy is closely linked to policies relating to privatisation, restructuring of industries and new models of organising production and commercial activity, such as supply chains and cluster development.
