Small and Medium-sized Enterprises (SMEs) are crucial to the global economy, acting as catalysts of economic growth, employment, and innovation.
SME’s in most economies are the largest employers, especially in marginalized groups which account for 50% of employment.
In terms of a country’s GDP contribution, SME’s contribute 55% or more in developed countries, up to 40% contribution in developing countries, and even higher when informal SME’s are included.
SME’s are often more agile and flexible than large enterprises, adapting new technologies, driving competition, introducing new ideas to the market, and having the ability to respond quickly to market changes.
A diverse SME sector reduces the reliance on having a few large industries making the economy more resilient to external shocks and fluctuations, strengthening the economic ecosystem, while simultaneously supporting large enterprises and acting as suppliers and service providers contributing to the overall productivity of the economy.
Despite the vital role of SME’s, they are often faced with challenges such as limited access to finance and to international markets. Many governments prioritize policies and initiatives aimed at supporting SME growth for these reasons.
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