Nurturing small firms in the knowledge-based economy: Programs and challenges

This paper aims at providing some insights into how the knowledge-based economy trend has been embraced by Australia’s Queensland State Government, through its signature policy known as the Smart State Strategy. Through significant investments in building new research institutes, upgrading the skills of locals to attracting and retaining knowledge workers and providing support to businesses, the Smart State Strategy has helped position Queensland as an important player in the global knowledge-based economy. A key initiative of the Smart State Strategy involves providing support to small and medium-sized enterprises (SMEs), which are now widely recognised as playing a vital role in economic activities in most countries. Despite their economic significance, SMEs are often poorly understood by policy makers and as a result some government-led programs and initiatives designed to nurture and support them may not achieve their intended goals. Using past literature a conceptual framework is developed for understanding the key challenges being faced by SMEs in participating in the current knowledge-based economy. This framework is then applied to the Smart State Strategy to assess its initiatives for supporting the small business sector. The paper argues that the Smart State Strategy has achieved some success in relation to its implementation, however, in terms of nurturing and supporting new and existing small businesses, barriers do exist that may holdup the progress of these policy initiatives. Purpose - The purpose of this paper is to provide an overview of and insights into how Australia’s Queensland State Government’s has embraced the knowledge-based economy through its signature policy known as the Smart State Strategy. Specifically, the paper assesses the services/programs being provided to the small business sector under the Smart State Strategy. Design / Methodology / Approach - A conceptual framework detailing the key challenges being faced by small and medium-sized enterprises is developed using past literature. This is then applied to the Queensland Government’s Smart State Strategy to assess its initiatives for supporting the small business sector. The Smart State Strategy is briefly explained, highlighting some achievements to date and the challenges that policy makers may face in providing adequate support to the small business sector. Originality / Value - This paper would be beneficial to all stakeholders involved in providing support to the small business sector as well as those interested in understanding how the small business sector operates given the changing world economy. Practical Implications - Provides policy makers with an understanding of the development path taken by small businesses and the specific problems they face at each stage of the growth cycle. This is important for designing appropriate support programs to enhance the small business sector.