deal about what underpins an entrepreneurial economy. it involves both the public and private sectors, and most importantly successful partnership between the two. a prime example of this is the nurturing of an enterprise culture through an alliance of the higher education system with initiatives, like business incubation, which often involve the private sector. you have heard today of the important contribution that can be made by both formal and informal venture capital, as well as the role of financial institutions such as the london stock exchange. the accountancy profession itself also has a key role to play. as the governor said in his speech to the institute ’ s annual dinner on 28 march - i hasten to add in the serious part - we could not do without accountants. the accountancy profession provides financial information and frequently more general company advice to small firms. alongside this there are various channels of government support. as outlined by david irwin, the small business service - in partnership with others - will provide this service in england and wales. the role of small firms in creating the entrepreneurial economy it is now widely acknowledged small firms are a source of dynamism, wealth creation and employment. as such, they have not only made a significant and direct contribution to uk growth in the last 10 years but also to the development of a more flexible labour market, and the introduction of new technology and ideas. market failures in the provision of finance to small firms could potentially, therefore, have far reaching consequences for economic performance. all firms need to work hard to overcome the information asymmetry which is inherent in any bank lending relationship, but which is especially challenging perhaps for the small company sector. while market failures in provision of small company finance will never wholly be removed, there is very little evidence to show that at least in the united kingdom they are important in practice today. nonetheless, it can only be helpful to improve the flow of information between business owners and finance providers, thereby ensuring a better appreciation by both of the relevant risks and rewards attached to particular business plans. the bank has long been interested in the financing needs of small and medium - sized enterprises. going back some way, an example of the bank ’ s early involvement was our instrumental role following the second world war in the formation of the industrial and commercial finance corporation - which evolved into 3i. we would not have described that then as seeking to promote the entrepreneurial economy, but that is precisely what it was. our role has, of course, evolved since then, in particular

improving their human capital skills, including presentational skills, to instil confidence in potential investors. the bank hopes to produce, before the end of the year, a follow up to the 1996 report. we expect to be able to demonstrate encouraging progress in a number of areas ( particularly the provision of seed, start - up and early stage new capital ). closing remarks much of the focus of today ’ s conference has been on high - growth, entrepreneurial firms - the gazelles. it is important also to remember the great majority of small firms that are not intent on breaking speed limits and are quite content driving in the middle lane, do not have. com in their names, but are steadily contributing to output and employment. these firms are important. nonetheless, it is the high growth firms that will continue to remain at the leading edge of the creation of an entrepreneurial economy. continued public and private sector support for these firms is vital. the bank of england will seek to continue to play its part, both in maintaining macroeconomic stability and in encouraging the better financing of growing businesses.