The fall in employment in UK, as stated by the DBIS is estimated at 0.74 percent to 13.6 percent million workers. It has likewise estimated a decrease in private sector employment in UK by 309,000, or 1.3% as compared to its 2008 employment figures.
Reasons for employment reduction in the SME sector will be investigated to provide information that could be used as basis for government policy decisions. Since the problems of SMEs lead to failure and eventually employment reduction, it is also important that that these problems be pinpointed as well.
The European Commission and McQuaid (2003) gave distinctions to a small and medium sized enterprise. In this respect, SME is categorized as