Importance Of SME

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In the Twenty-First century, Small and Medium Enterprises (SMEs) is not a novel term to be heard by people. In regard to having a self-explanatory name, SMEs is used to describe businesses that are small or medium in size; which is understood further by the set features of hiring up to 250 employees, receiving up to £50 million turnover every year as well as having internally autonomous management system and decision making (Analoui & Karami 2003, p. 27). According to the Department for Business Innovation & Skills (2015, p. 9), the number of SMEs in the United Kingdom has experienced a rise of 1.9 million for the past 15 years. Consequently, this significant increase would have played huge role in the UK economy – which mainly is expected to be positive. Therefore, this essay is going to discuss about the importance of SMEs towards the UK economy. It will then be followed by details respecting the challenges that are faced by the SMEs to grow. Afterwards, discussion of several governmental policies to the SMEs and its inference will be added. Finally, the essay will be concluded by summarisation of all discussions done. …show more content…

One of the importance includes their contribution to the UK economy in reducing unemployment. In a briefing paper by Rhodes (2015) and published by the House of Commons, it is disclosed that the business type in the UK is dominated by 5.4 million SMEs, which provided the enormous portion of over 99% against the total. Yet, as mentioned, their domination is not an idle number in the statistic. In 2012, a findings reported that around 367 000 people was no longer unemployed due to the SMEs each year (Urwin & Buscha 2012, p.

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