INTRODUCTION

New manufacturing firms have in the last few years become an increasingly important focus of academic debate and government policy, in Britain as in other advanced capitalist industrial countries. Indeed, in terms of job generation and through their postulated role in fostering healthy and diverse local economies, notably through the introduction of new technology, they have been viewed by some commentators as a key to national economic recovery in the long run. In the context of the current recession recent published work suggests an increase in the number of new company registrations in Britain (Binks and Coyne, 1983; Ganguly, 1982c) which has been optimistically interpreted by some as indicating a revival of free enterprise entrepreneurship and the first step towards economic regeneration in the 1980s. Moreover, studies of such areas as the East Midlands (Fothergill and Gudgin, 1982) and Northern England (Storey, 1983) have found that employment in small establishments, which include many new firms, grew during the 1970s notwithstanding high small firm closure rates, whereas large plants recorded heavy job losses. Country-wide evidence on this point is however less clear-cut (Macey, 1982).

Until recently the relatively few British studies which have examined spatial variations in new manufacturing firm formation have dealt predominantly with the role of conurbations and large cities in generating new enterprise (Firn and Swales, 1978; Ho wick and Key, 1979; Lloyd, 1980; Lloyd and Dicken, 1979, 1982; London Industry and Employment Group, 1979; Nicholson and Brinkley, 1979).