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Project management in SMEs
Small to medium enterprises (SMEs) play a significant role in the economy, both in terms of employment and economic development and growth ([8] Hallberg, 1999; [6] Floyd and McManus, 2005; [3] Enterprise Ireland, 2007; [5] European Commission, 2008). SMEs account for 99.8 per cent of all companies in the EU; they generate 56 per cent of GDP, and employ 67 per cent of all private sector workers ([5] European Commission, 2008). [9] Ledwith (2004) has shown that in Ireland 25 per cent of the turnover of SMEs is accounted for by new and improved products. Thus, 14 per cent of the economy is accounted for by innovation in SMEs. In order to achieve this development, SMEs spend 3 per cent of their turnover on innovation. However, successful innovation is not easy for SMEs ([15] O'Regan et al. , 2006), small firms have several disadvantages in innovating; restricted cash flow, a limited pool of knowledge and skills, and a low volume of sales over which to spread innovation costs ([19] Rogers, 2004). Therefore, it is important that the money they spend on innovation should be spent in an efficient and effective way, so that SMEs can achieve their development objectives.
There is some variation in the definition of what is meant by an SME ([10] McAdam and Reid, 2005). The EU defines a medium-sized company as one of fewer than 250 employees, and turnover and balance sheet less than [euro]50 million, a small one as fewer than 50 employees and turnover and balance sheet less than [euro]10 million, and a micro one as fewer than ten employees and turnover and balance sheet less than [euro]2 million ([4] European Commission, 2005). Inevitably, for a given company, these ranges do not exactly correspond, and the number of employees tends to be used as the primary determinant of size ([5] European Commission, 2008). We have adopted this definition. [3] Enterprise Ireland (2007), Ireland's industrial development agency, in their strategy for 2008-2013 categorize three levels of SME:
those with global sales of more than [euro]20 million;
those with global sales of more than [euro]5 million; and
high-potential start-ups, HPSUs.
The potential contribution of SMEs to the economy leads to the conclusion they need to increase...