Before proceeding with analysing the literature associated with the social media adoption and
maturity factors related to this sector, it is important to shed light on the rationale behind
choosing SMEs as the focus of this study.
D'Imperio (2013) stated that SMEs` contribution to economies differs in each country; and
while they play a significant role in high-income countries, they are also vital to low-income
countries. Studies indicate that SMEs contribute up to 45% of employment and up to 33% of
Gross Domestic Product (GDP) in developing economies (International Finance Corporation,
2010). According to Berry (2007) ‘'It is proved that SMEs are vital to almost all economies
around the world; however, they are more important especially in developing countries which
face major employment and income distribution challenges''. Keskin and Senturk (2010) stated
that current experimental studies revealed that SMEs contribute to more than 55% of GDP and
more than 65% of the overall job creation in high-income countries. Also, SMEs and informal
firms are responsible for more than 60% of GDP and more than 70% of the entire employment
in low-income countries while they account for more than 95% of the total employment and
around 70% of GDP in middle-income countries. Stockdale and Standing (2004) revealed that
the contribution of SME sector to local economies is important as it is responsible for 80% of
analysis and events suggest that a dynamic new and small firms sector is critical for growth in
these markets. The small firm sector is a component that is necessary for enhanced economic
well-being''. According to Dalberg Global Development Advisors (2011), more than 95% of
firms in the OECD region are considered SMEs which are responsible for about 60% of the
private sector jobs and make a substantial contribution to innovation as well as supporting the
domestic development and social unity. Moreover, in low-income countries, the SME sector
makes a serious contribution to GDP as well as to job creation. The U.S. International Trade
Commission (2010) revealed that SMEs contribute to the economy of the USA when it comes
to job creation and entrepreneurship as SMEs made around 50% of U.S. non-agricultural GDP.
The report stated that SMEs employment creation and contributions to the economy are mainly
in the sectors of services, manufacturing & mining, as well as construction. According to the
OECD (2018) “In the OECD area, SMEs represent almost the totality of the business
population, account for about 70% of total employment and generate between 50% and 60% of
value added, on average, SMEs contribute to more than one third of GDP in emerging and
developing economies and account for 34% and 52% of formal employment respectively”.
In the Middle East and North Africa region (MENA), Saleem (2013) stated that SMEs form a
high share of the private sector employment where they are responsible for 10 to 40 percent of
the total jobs in that region. Moreover, most enterprises in MENA region are MSMEs (Micro,
small and medium sized enterprises) and they account for 80-90 percent of the overall
businesses in these countries. Wymenga et al. (2012) argued that there is proof in the literature
that SMEs engage in technological innovations in different sectors and that they are essential
resources for jobs and productivity. In Saudi Arabia, Merdah and Sadi (2011) revealed that the
growth of the national economy is one of the critical challenges the Saudi Government face
job creation and building of skills. Table 2 summarises four main contributions of SMEs to the
economy in most countries.
SMEs main contribution to the economy Supporting litterature Job creation: Neumark et al., (2008) examined different sectors within the
economy of USA; the result showed that small firms create more employment chances. According to Kok et al., (2011) "For the EU as a whole, smaller firms contribute on a larger scale towards job creation than larger firms do, Net job creation rates decrease with each firm size class.". The authors state that SMEs contributed 85% of the overall jobs from 2002 to 2010. Also, SMEs have a much higher employment growth rate (1% per year) than large enterprises (0.5% per year). A study conducted by Gide Loyrette Nouel (2010) revealed that SMEs are a vital source of employment and that they are responsible for 67% of jobs in private non-financial sector and have surpassed larger companies by offering 9.4 million jobs from 2002 to 2008.
(Berry, 2007). (de Wit and de Kok, 2013). (Neumark et al., 2008). (OECD, 1997). (Dalberg Global Development Advisors, 2011). (Kok et al., 2011). (Ayyagari et al., 2011). (Wymenga et al., 2011). (Gide Loyrette Nouel, 2010).
Generate Income: According to Edinburgh, (2013) "The contribution of SMEs to economic fundamentals nonetheless varies substantially across countries: from 16% of GDP in low-income countries (where the sector is typically large but informal) to 51% of GDP in high-income countries".
(Berry, 2007). (Edinburgh, 2013). (Dalberg Global Development Advisors, 2011).
Economic growth: Gide Loyrette Nouel, (2010) states that many studies proved the connection between SMEs and general growth of an economy. Also, Stockdale and Standing, (2004) revealed that (SMEs) contribute significantly to local economies and are responsible for 80% of the international economic growth.
(Stockdale and Standing, 2004). (Dalberg Global Development Advisors, 2011). (International Finance Cooperation, 2010). (Acs and Yeung, 1999). (Wymenga et al., 2011). Gide Loyrette Nouel (2010).
Increase innovation: Gide Loyrette Nouel, (2010) states that SMEs are usually innovative. While Jain and Chen, (2013) reveal that SMEs are significant drivers for innovation in the majority of countries.
(Jain and Chen, 2013). (Dalberg Global Development Advisors, 2011). Gide Loyrette Nouel (2010).
Table 2 SMEs main contributions to economy