Small and medium-sized enterprises: A tool for socioeconomic development

Small and medium-sized enterprises are universally recognized as critical catalysts for socioeconomic development. Therefore, this study explores the empirical relationship between SMEs and economic growth, job creation, income generation, and poverty reduction. Through a cross-sectional research design, data was gathered via a questionnaire from 130 participants, including SMEs owners, operators, and young entrepreneurs who received training from entrepreneurship training programs such as the Next Economy program by SIMAD-Innovation Lab and the Start-Improve Your Business (SIYB) Training program by the International Labor Organization (ILO), as well as the entrepreneurship training program provided by Jamhuriya Incubation Centre (JIC). The study employed partial least square structural equation modeling (PLS-SEM) to test the hypotheses through SmartPLS (v.4.0.9.5). The study found that SMEs significantly contribute to economic growth, job creation, income generation, and poverty reduction. The findings provide significant implications for governments, international organizations, financial institutions, and policymakers, emphasizing integrating SMEs development initiatives into national development plans to improve social and economic development.