Competitive conditions, competitive advantage and the location of SMEs

This paper uses a large‐scale survey of SMEs (1,531 respondents) in the UK to assess the factors associated with their competitive conditions and their competitive advantage. Results appear to confirm that, as SME businesses grow, they develop their strategy to seek specialisation and differentiation of their products and services and diversification of their customer base. However, the paper suggests caution about any government policies based on local intervention. It suggests that policy assisted areas have no association with different local competitive conditions or advantage/disadvantage. Instead, the paper suggests that firms increasingly obtain competitive advantage from developing trading relationships with other regions or countries beyond their own locality. Consequently policy assistance should be tailored closely to the needs of the SME rather than the locality.