Outsourcing has traditionally been considered the domain of the larger corporate enterprise but this is changing with the upsurge of new, smaller businesses. According to the EU, SMEs (Small and Medium Enterprises) comprise approximately 99% of all firms and employ between them about 65 million people. In many sectors, SMEs are also responsible for driving innovation and competition. Globally SMEs account for 99% of business numbers and 40% to 50% of GDP. There appears to be a growing trend where smaller businesses are cooperating and collaborating together to win work and share ideas. These groups are termed ‘clusters’ and they can be grouped by geographic location, by sector or by industry. The advantage to all the cluster members is the ability to support each other with ideas and suggestions as well cross sell their skills to each other and provide qualified leads to each other. It is not the traditional idea of outsourcing but it is a different approach that could be useful.
Next time: Why do we start our own businesses? What are the issues?