Micro, small, and medium-size enterprises (MSMEs—enterprises that typically have fewer than 250 employees)1 contribute significantly to economic development. This is particularly evident in developing countries, where formal MSMEs represent approximately 45 percent of employment and approximately 33 percent of GDP.2 This contribution to economic development is even greater when informal MSMEs—that is, enterprises that are not formally registered—are included.
1 Excluding farms and including nonemployer firms (i.e., firms that do not have paid employees and are operated by their owners). Throughout the paper, nonemployer firms are grouped with informal enterprises.
2 Meghana Ayyagari, Thorsten Beck, and Asli Demirguc-Kunt, “Small and medium enterprises across the globe: A new database,” 2003.
By: Peer Stein, Tony Goland, Rober Schiff
Full Article: Link