The SME sector adds to the economic growth of a country through employment generation and overall sustenance of the economy locally, nationally and globally. Therefore, survival of SMEs needs to be discussed with high priority on developing such strategies that help in the growth of SMEs at regional, national and global level.
The world economy depends to a significant extent on the success of small and medium business, which necessitates the urgency of making an inquiry into the reasons of collapsing of small and medium business firms. The research question motivates analysis of the issue from different perspectives like what efforts the SME entrepreneurs are making for their survival, what guidance and financial help the governments and banks are providing worldwide for the survival of the SME industry and a number of other survival strategies. Curiosity arises on the causes of not surviving in the market place due to the associated risks. SMEs are not fighting a lone battle against odds; active government support is provided to them as they are the backbone of a country’s economy. This is the reason why so much attention is paid to the growth of SME sector in all industries.
In comparison to small business, medium enterprises are in somewhat better position; they accept the challenges but small entrepreneurs’ market position is very critical due to high cost of raw material, energy, inflation and lack of ready finance. Taking the example of Canada where small business represents 98% of all business, the government is playing a leading role in clearing the roadblocks to survival and growth of small business and leaving no stone unturned in its efforts for SMEs survival. The government is promoting SME by celebrating Small Business Week 2009 and introducing Canada’s Economic Action Plan, providing the mechanism to small and medium businesses to come soon out of the repercussion