Who do some small firms grow faster than others?  If there was a clear-cut answer to this question bank managers would have a better idea of which firms to back and the government would be in a better position to channel its advice and support towards the firms that were going to contribute most strongly to the economy. 

Someone who is helping to solve this complex issue is Professor David Storey, director of research at the Centre for Small and Medium Sized Enterprises, part of Warwick Business School.  Together with other academics, he has been trying to isolate the characteristics that distinguish fast-growth firms from those with more modest track records. 

A study he conducted in the north of England "matching" high performance firms with also-rans uncovered some useful data.  It revealed, for example, that fast-growth firms tend to invest heavily to facilitate further growth and that they were usually prepared to accept lower profit margins to accelerate sales growth. 

The study also threw up the importance of marketing.  Ninety four per cent of the surveyed fast-growth firms had a marketing expert on the management team or had access to a good marketing consultant, compared with only 37 per cent of the "match" firms.  Fast-growth firms consistently showed a greater awareness of their marketing strengths and weaknesses in relation to their competitors. 

Some unexpected findings have emerged from a second survey.  One is that the managing directors of fast-growth firms tend not to worry about the status symbol of having their own office.  "The first ten minutes of the interview are often spent searching for an empty office", says Storey.  In his view, this is not as surprising as it seems.  Such firms are constantly expanding and often the managing director is the first to sacrifice his office space.  He also believes that sharing space with his subordinates helps him to get around the premises and see what is going on. 

"The irony was", adds Storey, "that in many ways the fast growers were less obviously structured than the smaller type of company which is not going anywhere in particular, but where there was a fairly strict sense of hierarchy".