Investigating the firm life-cycle theory on Australian SMEs in the ICT sector

Four points of major criticism can be identified regarding the application of firm life-cycle theory on SMEs: inconsistency of empirical validation; descriptive nature of the model; regression in the cycle is neglected; and linear, sequential life-cycle model. Data was collected on Australian SMEs in the ICT sector, using an established quantitative methodology. Propositions were formulated based on critical literature, and were evaluated using the data. It was found, that the life-cycle classification was possible and meaningful. Progression along the life-cycle path was predominant, but regression could also be identified. An idle life-cycle stage could not be clearly identified using clustering. However, when investigating the shift between life-cycle stages, a substantial group of idle firms has been shown