The Role and Challenges of Small and Medium-sized Enterprises (Smes) in Emerging Economies: An Analysis from Turkey

Abstract

Small and medium-sized enterprises (SMEs) form a large part of economy. As SME sector has a crucial role in creating new jobs, economic growth and innovation, these economic units are worldwide acknowledged as the key actors of socioeconomic development. In Turkey, significance of SMEs is relatively higher, caused by not only from their huge share in the economy, amounting to 99.9% of all registered enterprises, but also their “backbone” function in the dynamic but turbulent Turkish economy. As Turkey experienced severe economic crises during the recent decades, SMEs became one of the major elements of the growth and development policies of regulatory authorities. This paper aims to address this critical role of small and medium sized companies by investigating factors behind the rising popularity of SME sector in Turkey, while at the same time pinpointing the major adventageous and problematic areas. Turkey is among major emerging economies, therefore the analysis this expected to make a significant contribution to literature about small business sector in developing economies by taking the factors constraining the growth of Turkish SME sector to the spotlight.