Small and medium enterprises (SMEs) have long been globally recognized as engines of growth. In recent times, a growing emphasis on inclusive development has drawn further impetus on SME development since SMEs' growth contributes to GDP growth, employment creation, poverty alleviation, and vertical and horizontal expansion of firms. These SME enterprises are very dynamic and can adjust better with the changes.

In Germany, 99.4% of the enterprises are micro, small and medium enterprises. It accounts for 63% of all employment and contributes to over 54% to value addition. In emerging economies, SMEs contribute up to 45% of total employment and 33% of GDP. Over 98% of the enterprises are SMEs in Bangladesh. More than 84% of rural non-farm employment was generated through cottage and micro-enterprises in 2013.