ECON
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Although developed countries such as the united

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industrial employment declined, as the income distribution disparity was reduced. Although developed countries such as the United States have managed to sustain low unemployment rates through high investment in the industrial sector, inequality in income distribution is also one of its major social constraints. The gap between the high income and low- income households remains relatively high. Although unemployment is one of the causes of social constraint, other measures such as discrimination and overexploitation by employers are the major hindrances. Markedly, ethnic and racial discrimination in the United States is alarmingly high. Members of the minority groups experience resource distribution disparity because of their ethnic or racial group. Therefore, the high poverty rate is not caused by lack of growth opportunity but due to discrimination factor. Discrimination is also one of the main factors that lead to an increment of income distribution disparity. In this case, reducing overreliance on industrial employment and supporting the entrepreneurial culture will aid in reducing high discrimination metrics. Markedly, success in SMEs is not regulated by a system or institution but by the market demand, consumer
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ROLE OF SMES IN PROMOTING SOCIAL ECONOMIC GROWTH 8 rationality, and economic variables. In this case, boosting the SME sector will enable the developed economies to reduce inequality rates that are triggered by discrimination constraint. Implications of SMEs in Economic Growth and Prosperity From Adamowicz and Machla’s (2016) perception, SMEs increase a higher growth value to a given economy than the large and multinational enterprises. One of the factors that made the research to make such conclusions is the influence of SMEs in reducing the dependency ratio and improving living standards. Although after starting a business one earns a low-income return in the short-term, entrepreneurs enjoy high-profit margins, which are relatively higher than the wage rates of high paying jobs. In this case, the small and medium-sized enterprises raise the living standards by increasing the net income statements. Given that income per capita is one of the commonly used metrics of gauging economic performance, poverty rates, and living standards, SMEs provide a more sustainable and efficient platform for enhancing economic growth of individuals in an economy. Apart from the high-income rates, SMEs offer higher economic growth and prosperity potential to individuals than the corporate jobs. Notably, the highest employment rank is considered a CEO position, which only 1% of the employees become CEOs. In addition, the wage rates of high earning personnel are relatively lower than the profit realized by a majority of medium-sized enterprises in one financial year. The highest growth opportunity of SMEs is becoming a multinational corporation. Markedly, a majority of large and iconic firms began as SMEs. For example, McDonald's began as a cafeteria and after four decades, the restaurant became a multinational corporation. Additionally, Nestle began as a small baby food company and after 4 decades of operations, its products were being sold in multiple national markets.
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