The Importance Of SMEs On World Economies

The importance of SMEs to world economies is well reported. SMEs (firms with 200 or less employees) construct the biggest business sector in each global economy therefore governments around the world are increase the effort to promote and support SME expansion as their national development strategy. Micro firms and SMEs are forming the majority of firms in most countries (which 95% on average) and for the large majority of jobs. While SMEs are dominating of very great numbers, SMEs are significant due to their importance as priority drivers to employment, economic growth and innovation. According to the World Trade Organization SMEs represent over 90% of the business population, 60-70% of employment and 55% of GDP in developed economies. SMEs held for around 20% of patents, one measure of innovation, in biotechnology-related fields in the Europe. As the world economy faces with prevailing challenges, governments increasingly start to turn on SMEs as a significant element of sustainable and inclusive economic growth. The importance of SMEs to; economic growth, poverty reduction, innovation and job creation also social cohesion are major key.