S MEs are considered to be the engines of economic growth and development as they foster entrepreneurship, employment and innovation. This is mainly due to the flexibility that the SMEs can afford. While large companies mostly focus on improving old products and services to produce in large quantities, SMEs have the choice to innovate and come up with new products and solutions. This allows the SMEs to adapt quicker to the changing market requirements. This is also attributed to the fact that decision-making is faster and simpler in SMEs. Due to the lack of official hierarchy, changes in the markets are followed through and decisions are made quickly without being delayed by a multitude of approvals. Furthermore, this flexibility and easy decision- making also let SMEs create more competition in the market in terms of product, price, and efficiency, thereby creating a healthier economy by challenging large companies and preventing them from holding a monopoly in the market.

As opposed to large companies and corporates, a notable advantage of SMEs is the heightened team spirit that is fostered within them. Large enterprises with multi-floored offices do not allow one-to-one interaction of employees, office politics and differences in departments being the reason for this. This lack of directness and ease of working together create a chasm between the employees and indirectly affects the performance of the company. In the case of an SME, the person in charge acknowledges each employee, their contribution and importance. Additionally, the employees in SMEs are cross trained, which ensures that the work happens even in the absence of someone, giving the employees more freedom and time to breathe.