The Developmental Role of SMEs in the Arab Countries

Abstract

Small and medium enterprises (SMEs) have become one of the key instruments to face economic and social problems and achieve development objectives in most industrial and developing countries. SME contributions to employment creation, productivity improvement, and income generation are underutilized in the Arab countries at a time when economic transformation is shifting the onus for productivity from the public sector to the private sector. Population growth and economic restructuring in many Arab countries make the creation of substantial new employment opportunities a necessity. To do so, Arab enterprises must favorably face increased competition in both local and export market through improvements in product quality and work place efficiency. Sheer survival in theses business conditions forces both large companies and SMEs to restructure themselves in order to meet the global competition. Statistics show that SMEs represent 90% of total companies in the vast majority of economies worldwide and provide 40-80% of total job opportunities in addition to contributing largely to GDPs of many countries. The aim of this research is to study The developmental role of SMEs in the Arab countries.