Micro and Small Enterprises in Turkey: Uneasy Development

The role played by Micro and Small Enterprises (MSEs) in the Turkish economy has attracted a considerable attention in recent years, but mainly from two sources. The first, originated from the emergence of new technologies and restructuring of the production processes in the world since the late 1970s, which favors MSEs in comparison with the larger enterprises. In this context, there is a growing recognition of MSEs innovative character, their flexibility in adapting to unstable and unpredictable situations, and their ability to integrate to global production chains. As such, MSEs are perceived as engines of growth in the economy. This standpoint also conforms with the importance given to Small and Medium-sized Enterprises (SMEs)2 in the European Union (EU). EU considers SMEs as “a key source of jobs, business dynamism and innovation”.3 The second position, on the other hand, emphasizes the potential of MSEs in employment generation and poverty alleviation, in an environment of increasing unemployment and widening income inequalities. However, the real level of knowledge about MSEs in Turkey is surprisingly low. This study attempts to make an essential contribution to the knowledge of MSEs in Turkey by investigating both the internal conditions and the dynamics of MSEs as well as examining the external economic and social conditions pertaining to their performance and development.