The importance of SMEs in economic development of developing countries

Abstract

Small- and medium-sized enterprises (SMEs) have a crucial role in economic development, especially in the development of developing countries. They represent about 90% of businesses and more than 50% of employment worldwide. Formal SMEs contribute up to 40% of national income (GDP) in emerging economies. This study will discuss how SMEs help building economic stability, their role in creating labor market, and fighting the monopoly. The aim of this research is to identify key issues relating to the role of SMEs in country development. The paper uses different research methods, and it strives to help people with entrepreneurial mindset to obtain deep understanding of the SME market. The results showed the complexity of this issue, different angles and perspectives can be seen on the analysis of different countries. However, from the results it is clear how beneficial the development of SME market is in the developing countries.