http://bmr.sciedupress.com Business and Management Research Vol. 10, No. 1; 2021 Published by Sciedu Press 33 ISSN 1927-6001 E-ISSN 1927-601X The Micro, Small, and Medium-Sized Enterprises and Its Role in the Economic Development of a Country Jorge Morales Pedraza 1 1 Senior Researcher and Co-founder, Morales Project Consulting, Vienna, Austria Correspondence: Jorge Morales Pedraza, Morales Project Consulting, Vienna, Austria. E-mail: jmorales47@hotmail.com; jmp@moralesconsulting.at Received: January 3, 2021 Accepted: February 10, 2021 Online Published: February 20, 2021 doi:10.5430/bmr.v10n1p33 URL: https://doi.org/10.5430/bmr.v10n1p33 Abstract Undoubtedly, micro, small, and medium-sized enterprises (MSMEs) play a central role in many countries’ economic development. They are a major source of entrepreneurial skills, innovation, and employment account for most businesses worldwide. MSMEs are important contributors to job creation and global economic development, representing 90% of businesses and more than 50% of employment worldwide. Keywords: micro enterprises, small enterprises, medium-sized enterprises, large corporation, large companies, emerging economies, developed economies, developing country, emerging economies, developed country 1. Introduction The micro, small, and medium company or MSME is an independent firm with specific working and financial boundaries established by the states or group of states with particular logics, cultures, interests, and a business spirit. According to Liberto (2020), MSMEs are firms that maintain incomes, assets, and several workers below a certain threshold established by law in each country or group of countries. Each country has its own definition of what constitutes an MSME. This type of firm is often considered to be the heartbeat of both developing and developed economies. Many people in developing economies are working in MSMEs, contributing roughly 45% of total employment and 33% of GDP in these countries, according to the Organization for Economic Co-operation and Development (OCED). Undoubtedly, MSMEs play a central role in many countries’ economic development. They are a major source of business skills, innovation, and employment (The new SME definition. User guide and model declaration, 2018). What is the importance of MSMEs? Through the MSMEs, which represent more than 95% of all companies in most countries, opportunities can be found to promote the development of the country’s economy. If the MSMEs have the elements to maintain themselves and grow, they will contribute significantly to their economies. Compared with large corporations, MSMEs have great advantages. These advantages are, among others, the following: • Agility in decision-making. While large companies, the bureaucracy, and coordination between different area make the decision-making process slow, MSME companies can do it much faster; • Closer to customers. MSMEs can better understand their client’s needs, increase satisfaction, and, therefore, loyalty; • Greater flexibility and adaptability. Due to their size, MSMEs can adapt more easily to eventual market changes, modifying their structure and processes depending on the needs of the new market; • Relationship and work environment. While in large companies, the worker is only a number, in MSMEs, each worker is fundamental to the company’s exit, and due to their size, it is easier to generate and strengthen ties among them. • Horizontal communication. In MSMEs, it is possible to establish direct and transversal communication between all of the company’s workers, something impossible to achieve in a large company due to the hierarchical levels and the existence of various departments; • Their possibility of specializing in each market niche offers direct attention.