The Influence of Small-Scale Business Enterprises on Economic Growth

Abstract

This research aims to investigate the influence of small and medium-sized enterprises (SMEs) on economic growth. Through a comprehensive literature review, the study analyzes the role of SMEs in job creation, fostering innovation, and contributing to gross domestic product (GDP). Various factors affecting the development of SMEs are identified, including access to capital, supportive government policies, and the availability of adequate infrastructure.

A qualitative literature review method is employed to collect and analyze data from reliable sources, such as academic journals, government reports, and research institutions. The study also examines case studies from various countries that have successfully developed the SME sector as a driver of economic growth. The findings indicate that SMEs play a significant role in promoting economic growth through job creation, income generation, and economic diversification. However, challenges need to be addressed, such as limited access to capital, lack of training and skills, and regulatory barriers. In conclusion, SMEs are the backbone of many economies and have substantial potential to contribute to sustainable economic growth. To optimize the role of SMEs, governments need to develop supportive policies and programs, as well as promote a conducive business environment for SME development.