The role of small and medium enterprises in regional development: special reference to Jaffna divisional secretariat

Abstract

Small and medium enterprises (SMEs) constitute an important part in economic development of any country and contribute considerably to regional development by creating new job opportunities, providing investment opportunities and forming the economic capital and potential required for sustainable economic growth. It is observed that whether developed country or developing country, SMEs are the back born of economic development. These enterprises are playing a major role in decrease of poverty, and unemployment. This study aims to evaluate the role of SMEs in regional development with in the area of Jaffna Divisional Secretariat. For this purpose 200 SMEs are selected for this study. SME development projects can play in serving the economic and social development process in such a way of developing and increasing the volume of exports, contribution to regional development, incubator of new skills and innovations, assisting social and political stability, provide support services for large industries. Improvement of Small and medium enterprises increasing living standard of Labour force in this sector. Data were analyzed through SPSS Software using correlation and regression analysis. The result shows that there is strong positively relationship between the role of SMEs and regional development within the study area. The regression analysis also appears with the R2 value of 0.627 which explain that the role of SMEs impact 62% on the regional development of the study area.