Small and Medium-Sized Enterprises in sport and the shadowlands of sport business

Posted: Mon, 01 Jun 2015 10:34

Small and Medium-Sized Enterprises in sport and the shadowlands of sport business

Small and medium sized enterprises (SMEs) – any business with less than 250 employees (as defined by the European Council) – today command the attention of business policy-makers and national & regional business leaders. The small business sector is regarded as a fundamental ingredient in the establishment of a modern, progressive and vibrant economy, helping promote an element of local and regional control & accountability. Despite the fact that innovation in and through SMEs remains at the heart of government policy initiatives for stimulating economic development at the local, regional, national, and European levels – it was certainly a litigious topic in the recent general election – there is a dearth of designated evidence determining the current 'state of play' in relation to Sport SMEs in the UK this past decade. A lack of evidence on the prevalence of sport SMEs ensures many sport businesses are fated to remain in the shadows of wider pro-SME policy. The failure to improve our basic understanding of SMEs in sport is significant given that, in the UK, SMEs (including sole traders), amount for 99.8% of all businesses, 55% of non-government employment, 51% of turnover, and are the main source of new job growth (Small Business Survey, BIS, 2014) – a trend that shows no signs of slowing.

Mainstream and academic sport business research has been slow to learn from practices evidenced in the mainstream business environment and is only recently beginning to acknowledge that the sport industry is overwhelmingly populated by SMEs - an interesting trend at a time when SMEs comprise 99.8% of all businesses in the UK. Sport organisations have become increasingly business-like in their operations, and it is perhaps sport assuming an increasingly business character that has led to its dilution within and through mainstream business management principles and practice.

Most small businesses, because of their small market share, are unlikely to exert much influence on their chosen industry/sector. In an economic sense they are 'price-takers' and may well face significant competition. Small firms often choose to operate in a single, or a limited range of markets with similar customer requirements, deliberately restricting their product/service offer. It is important to take note of the particularities of SMEs in sport, because understanding their range of unique challenges and issues (that are not applicable to their larger counterparts) can help to establish a strong case for their study, as well as provide insight into targeted support needs.

With SMEs comprising 99.8% of all private sector businesses in the UK, representing 59.3% of private sector employment and 48.1% of private sector turnover, it is not unreasonable to assume that these figures capture a significant proportion of sport businesses. In employment terms, 95% of non-participants (those individuals entering the private sector from another sector or for the first time, i.e. graduates) securing work in the private sector are more likely to either start-up their own business or start work for an SME. This has interesting business management training and sport management education implications that we must eventually come on to.

Considered against this apparently affluent SME backdrop it would seem reasonable to surmise that the sport SME sector be a significant component in any post-recession growth. However, despite the apparent economic value of SMEs, sport SMEs recurrently escape the purview of mainstream study; this is despite sport being regarded as the archetypal entrepreneurial industry. It is time Sport SMEs stepped into the light as the debate on the importance of small businesses in sport promises to rumble on.

Dr. Sam Elkington is Senior Lecturer in Sport Management at Northumbria University

samuel.elkington@northumbria.ac.uk

Tags: Policy, Sport

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