Introduction

During the course of development, small and medium-sized enterprises (SMEs) are seen as the cornerstone of a national economy and significant contributors to the prosperity of a country. SMEs play an important role in a wide spectrum of industries in a country. The number of SMEs dominates that of large and very large enterprises. They contribute significantly to a country's economic growth and employment creation of most countries. Most governments view the SME sector as a key engine of the economy and a source of employment creation (Harvie 2010).

The role of SMEs, however, was not recognized until the mid-1970s. Before that concentration and centralization of economic activities were seen as the main evidence of a firm's competitiveness and large firms received much attention. SMEs’ contributions to economic activity only began to be a priority after the Bolton Report in the UK (1971) and the Wiltshire Report in Australia (1971) on the role of SMEs in the economies of the UK and Australia, respectively were published (Al-Qirim 2004).

In Europe, two-thirds of all new jobs are created by SMEs and more than 99 per cent of all enterprises are SMEs. In the United States, more than 99 per cent of all independent enterprises employ fewer than 500 employees, which is the definition of an SME in the United States. These SMEs employ 52 per cent of all U.S. workers (Devos et al. 2014).

In Australia, SMEs is a substantial sector, making up 95 per cent of all enterprises (Chau and Turner 2004). These enterprises contribute A$530 billion to the economy in 2010–11, more than half of private sector economic activities, and employed over 7 million people, generating more than two thirds of private sector employment (Deloitte 2013).

In East Asia, SMEs account for about 98 per cent of all enterprises, equivalent to between 20 and 30 million businesses. In the three largest economies of East Asia — Japan, China and Korea — SMEs account for 70 per cent of enterprises in the region (China: 8 million; Japan: 5 million; and Korea: 2.6 million). The intensity ratio of SMEs is only 20 people per SME in developed countries.