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Fostering Innovation in Small and Medium Enterprises in the Arab Region

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This report explores the intersection of MSMEs, innovation and technology against the background of the Sustainable Development Goals. Micro, small and medium enterprises (MSMEs) targets the largest share of economic actors in the Arab region, both in terms of employment and of contribution to economic added-value. Innovation and technology have become key to finding solutions to the most pressing and persistent social, economic and environmental needs and challenges communities face today. Practice and research have shown the impact of innovation and technology on human welfare, economic growth, industrial efficiency, and environmental protection.

The report discusses SDGs focus on SMEs and innovation, especially in SDG 8 and SGD 9, while assessing the size and the role of MSMEs in Arab countries, based on existing literature and an analysis of selected indicators. The narrative further describes the role of innovation policies in enhancing MSMEs and defines various approaches to foster innovation in these enterprises, highlighting the distinction between rural and urban ecosystems. The report ends with conclusions and recommendations stressing the critical need to promote innovation within MSMEs for economic and social development in the Arab countries.