SMEs throughout the globe play an important role for the growth of every Nation and contribute immensely to the industrial development and output, exports, forex earnings and creation of employment opportunities. They constitute more than 90% of all enterprises in most of the countries and employ more than one third of the total working population in emerging economies. They are also driving force behind large number of innovations, stimulate private ownership, entrepreneurial skills and help diversify economic activity.
Globalization and subsequent opening up of various economies have created plenty of opportunities for the SMEs; however, at the same time it has given rise to a number of challenges. The challenging global markets and highly integrated economies have imposed the necessity of coping up with local and international competitors. In this highly integrated global economy, SMEs are faced with two fold problems: On one hand they face severe asset constraints and limitations on their access to critical resources which restrict their capacity to compete in the competitive global environment; on the other hand their local advantage is being wiped off by powerful international organizations capturing their local markets and niches.
Despite the initiatives taken by economic policy experts across the globe to support the SMEs and create a platform to enable them to play a larger role in the globalized economy, it is very evident that new path of economic reforms and policy development are required in order to enable these small units to become competitive, integrate them successfully and operate fully in the globalised industry.