Int. J. Hum. Capital Urban Manage., 5(3): 217-230, Summer 2020 *Corresponding Author: Email: y.vakil@semnaniau.ac.ir Phone: +98912231 6247 Fax: +982333654231 Internatonal Journal of Human Capital in Urban Management (IJHCUM) Homepage: htp://www.ijhcum.net/ ORIGINAL RESEARCH PAPER Exploring relatonship between the development of small and medium scale enterprises and the employment of universites graduate S.H. Mesaeli 1 , Y. Vakil Alroaia 2* 1 Faculty of Economics and Management, University of Semnan, Semnan, Iran 2 Entrepreneurship and Commercializaton Research Center, Semnan Branch, Islamic Azad University, Semnan, Iran BACKGROUND AND OBJECTIVES: Over recent years the employment creaton discussion was massively raised especially about university graduates and demands from Iran’s government increased. The predicton of the youth unemployment rate during the period from 2015 to 2021 showed that with an annual growth rate of 5%, in the last year of the period, the unemployment rate for youth would be equal to 9.36%, and for university graduates will be 36%. Therefore, the main purpose of this research is to provide an applied model for small and medium-sized enterprise (SME) development and university graduates’ employment in Iran. METHODS: In this regard, an appropriate model was defned by studying the literature about small and medium enterprises development models and extractng efectve factors according to Iran’s situaton. In the second stage, afer selectng a sample of 60 small and medium enterprises in Iran, in order to quanttatvely testng the model, the data were collected by a questonnaire and were analyzed with the help of PLS sofware. In the third stage, the relatve importance of factors were tested from the perspectve of 10 experts in the feld of entrepreneurship with more than 15 years of work experience with the help of ANP and PROMETHEE methods. FINDINGS: The results shows the preference value (Φ) of these factors respectvely include the parameters of: Technology, innovaton, and compettveness (Φ=0.72); Financial support programs (Φ=0.63); Educaton and consultancy services (Φ=-0.38); Cooperatve relatonships (Φ=-0.41); and Export development (Φ=-0.55). CONCLUSION: Changing market conditons enable SMEs to respond more agile and faster to customer needs, improve the quality of their products, reduce the cost of their producton, and their tendency to recruit university graduates. ©2020 IJHCUM. All rights reserved. ARTICLE INFO Artcle History: Received 1 April 2020 Revised 2 May 2020 Accepted 20 June 2020 Keywords: Small and Medium scale Enterprises Development of Small and Medium Enterprises Employment of Universites Graduate ABSTRACT DOI: 10.22034/IJHCUM.2020.03.04 NUMBER OF REFERENCES 30 NUMBER OF FIGURES 1 NUMBER OF TABLES 7 Note: Discussion period for this manuscript open untl October 1, 2020 on IJHCUM website at the “Show Artcle.