Smes in asia and the pacific

Enterprise 
category
Headcount
Turnover
(in euros)
Balance sheet 
total (in euros)
Medium-sized
< 250
≤ 50 million
≤ 43 million
Small
< 50
≤ 10 million
≤ 10 million
Micro
< 10
≤ 2 million
≤ 2 million
Table 2. Just for comparison: the European Union definition of an SME
Source: European Commission Recommendation 2003/361/EC of 6 May 2003 concerning the definition 
of micro, small and medium-sized enterprises, available at http://ec.europa.eu/enterprise/
enterprise_policy/sme_definition/index_en.htm.

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firms, fourth by permitting greater specialization in manufacturing, and fifth by 
raising productivity and employment in both the modern and traditional sectors. 
(Gries and Naudé 2008a, 25)
This is not to dismiss the crucial role played by foreign-invested enterprises, and 
large domestic firms too, in advancing a developing economy. But it does recognize the 
important role played by more innovative SMEs, and acknowledges that they are not 
passive spectators sitting on the sidelines of an economic development exercise from 
which they are largely divorced. 
However, the ability of more innovative SMEs to perform this economic function is 
significantly determined by the business environment in which they are obliged to operate. 
Without conducive conditions—the right kind of business enabling environment—in which 
to develop and grow, SMEs are likely to remain: (a) bonsai-like in stature; and (b) much 
less dynamic in their actions. This explains in large part why attention is often placed on 
various global indices and indicators that attempt to measure and compare the business 
environments in different countries. The better indices have a genuine benefit in identifying 
issues and comparing them across countries, as a basic form of diagnostic analysis.