Small and Medium-Sized Industrial Enterprises and Their Role in Strengthening Economic Securit

Abstract

This study aims to analyze the role of small and medium-sized industrial enterprises (SMEs) in strengthening industrial and economic security, drawing upon the South Korean experience—a development model that prioritized the expansion of the industrial base, the enhancement of productive and technological capabilities, and the increased participation of SMEs in economic activity. The study is premised on the hypothesis that the significance of these enterprises extends beyond job creation and increased output; they also bolster economic resilience, diversify the production base, develop local supply chains, and mitigate vulnerabilities stemming from an over-reliance on imports and external sources of supply.

The study addresses the extent to which SMEs contribute to building an integrated system for industrial and economic security, while identifying the policies and mechanisms that can enhance this role, informed by the South Korean experience. To achieve its objectives, the study employs a descriptive-analytical approach alongside a case study methodology. It examines the evolution of SMEs in South Korea and analyzes the industrial, technological, and financial policies that have supported them—focusing specifically on their role in boosting domestic production, enhancing competitiveness, fostering innovation, and strengthening the economy’s capacity to withstand external shocks and challenges.

The significance of this study lies in its attempt to link the development of SMEs with the concept of industrial and economic security, both of which are fundamental to achieving economic stability and fostering a degree of independence in the provision of strategic goods and production inputs. It also seeks to derive lessons from the South Korean experience and to identify the institutional, legislative, financial, and technological requirements necessary for developing this sector within Arab economies.

The study concludes, within its analytical framework, that the effectiveness of small and medium-sized industrial enterprises in supporting industrial and economic security depends on the extent to which they are integrated into the national industrial strategy; their access to finance, technology, and markets; their incorporation into value and supply chains; and the efficiency of government policies in fostering innovation, enhancing productivity, and improving product quality. Accordingly, the study emphasizes the importance of adopting comprehensive industrial policies that strengthen the capacity of these enterprises to contribute to the diversification of local production, bolster inter-firm linkages, and reduce economic vulnerability to external shocks—while accounting for the differences in institutional and economic conditions between South Korea and Arab nations.