In Quest of SME-Conducive Policy Formulation

Abstract

Objective: The article focuses on the role of SMEs in the national, regional and global environment. The main objective of the article is to present the economic and social importance of SMEs in the context of policy formulation for their support and development. Research Design & Methods: The article reviews the theoretical and empirical literature on SMEs and their role in business environment. Then the paper develops a set of questions and propositions to guide future research and policy. Findings: The article describes a significant role of SMEs for job creation and economic dynamics. Over the economic considerations, relevance of SMEs is to be viewed also from a more broadly based socio – economic perspective; that is, SMEs being seen as a driving force of structural change on the one hand, and as stabilising factor for safeguarding a given economic setting with its institutional framework in the dynamics of change on the other. Implications & Recommendations: The complexity and dynamics of market processes determine the diversification of SME policy. Identifying contemporary challenges faced by SMEs are ‘building stones’ for specific policy formulation in the future. Contribution & Value Added: The study highlights the need to deepen the understanding of the current role of SMEs for the labour market and welfare. What is more, the SMEs policy should be articulated more offensively as a key component of the economic policy in general.