Small and medium enterprises (SMEs) are the backbone of the economic development of any country.
They have proven to be strategic drivers for multiple industries and continue to play an integral role in any economy's future.
SMEs contribute greatly to the growth, innovation, and job creation of the economy, essentially making them the engine of economic development.
On top of that SMEs are not location dependent, giving them the additional advantage of being able to function both in rural areas, suburban as well as urban areas without a hindrance as long as there’s a need for the product or service they provide.
Some of the key reasons why SMEs are important for the growth of an economy are:
Innovation and creativity
Innovation and Creativity
SMEs give entrepreneurs the opportunity to come up with creative ideas that help reshape an already saturated market or find a new subsection of an established market and create a unique business within that market.
SMEs are playing a big role in the vitalization and development of a nation's economy because they are creating job opportunities, promoting stability, and developing new markets that fuel economic progress, promoting competition, in turn, producing high-value products.
SMEs are highly prone to unexpected changes that occur in an industry, as such they have to factor in how those changes affect them and how they will adjust their approach or actions in response to those changes.
SMEs sector can bring great benefits to developing countries however emerging economies private sectors tend to be dominated by large enterprises or micro-enterprises which employ 5 to fewer people creating substantial barriers to SME growth.