Problems and Global Challenges of Small and Medium Enterprises (SMEs) in Iran

The development and prosperity of Small and Medium Enterprises (SMEs) are crucial to the development agenda of any economy in the world, be it in developed or developing countries. This is especially so for Muslim countries, most of which fall under low-income countries. Literature is replete with the roles and importance of Small and Medium enterprises in the development of any nation. These include, among others, the creation of employment, source of innovation, export generation, income generation, poverty alleviation, and the source of future medium and large enterprises. There isn’t a unanimous definition of SMEs anywhere in the world, and Muslim countries are not an exception. Thus, there exist various definitions of SMEs in Muslim countries. Small and Medium Enterprises have been defined traditionally based on several indexes: number of employees; amount invested; total assets; sales turnover and production capacity. However, the definition based on the number of employees is common in most of the Muslim nations. The SMEs sectors in Iran play a very vital role in economic development and entrepreneurship growth because the SMEs sector is private. In this paper, we find that the main causes of the problems and issues of the SMEs sector are based on a lack of entrepreneurship talents and training because of the factors hindering innovation. We try to find out the role of government-based training institutes and as well as semi-government institutes in entrepreneurship development in the SMEs sector in Iran.