In the business world, small and medium-sized enterprises have a long history of serving in providing employment opportunities to the country's population. It increases people's ability to become more innovative and cope with the employment crisis. Small and medium-sized enterprises (SMEs) are seen as a key to economic growth, innovation and job growth, with significant employment potential, revenue generation and technological advancement in most economies. It is a very important industry in both developed and developing countries. In Pakistan, SMEDA defines small and medium enterprises, as approved in the SME Policy 2007, as an enterprise having up to 250 employees or a paid-up capital of INR 25 million. or an annual sale of up to PK 250 million rupees. The Federal Government, in line with the economic development of Pakistan, may, from time to time, amend the eligibility criteria as it deems fit. All service providers that receive government funding can define narrower scopes for specific objectives (Smeda, 2007). In developing countries like Pakistan SMEs play a very important role by providing employment opportunities. SMEs provide a platform for people to start businesses with minimal capital. The development of SMEs depends on many factors such as infrastructure, finance, manpower, location and market, political, legislative and law enforcement situation. The structure of SMEs changes in size, workforce, market and outcomes as they develop. Recently in the literature there is a question about the existence of SMEs with increasing economic development of developing countries. Another issue that requires research is the amount of public support needed for SME development (Tambunan, 2008). This study aims to address both issues in...... half of the paper ......c Studies, 4 (2). pp.ÿ113-136.ADB (2004), ADB to Help Foster Development of SME Sector in Bangladesh, Asian Development Bank, Mandaluyong, available at: www.adb.org2004. SMEs. Washington DC: World Bank Group Review of Small Business Activities. Narain, S. (2003), “Institution capacity building for the promotion and development of small and medium enterprises”, Investment Promotion and Enterprise Development Bulletin for Asia and the Pacific, no. 2.Quddus, M. and Rashid, S. (2000), Entrepreneurship and economic development: the extraordinary story of garment exports from Bangladesh McDowell, S.D. (1997). Globalization, liberalization and political change: A political economy of the Indian communications sector. Minton, A.A. (2006), “SMEs in Bangladesh Harvie, C. (2003), The contribution of microenterprises to economic recovery and poverty reduction in East Asia