A Scoping review of construction SMEs: global vs local

Abstract

The small and medium-sized enterprises (SME) sector is a significant driver of economic growth, significantly contributing to employment and gross domestic product (GDP) worldwide. However, Sri Lankan construction SMEs are lagging behind compared to those in other countries, where innovative legal frameworks and good practices have supported SME development and competitiveness. Learning from these global practices presents an opportunity to strengthen the local SME sector. Therefore, this study aims to investigate SMEs in local and global contexts comparatively. It explores SME definitions, legal provisions, and their role in economic development, while examining international best practices to enhance SME performance and resilience in Sri Lanka. A scoping review, supplemented by manual data analysis, reveals the absence of a universal SME definition and dedicated legislation, particularly in the construction sector. A comparative analysis of SME definitions across India, Japan, Europe, and Sri Lanka highlights varying approaches, often based on multiple criteria. Sri Lanka lacks dedicated SME act, relying instead on a policy framework and general legislation, with no specific provisions for construction SMEs. The study emphasises the vital role of SMEs in economic development as incubators for larger firms, drivers of employment and innovation, and contributors to social mobility and international trade. Their significance in economic recovery is examined, along with a review of legal frameworks, comparing dedicated SME acts with broader policies, including the current strategy of Sri Lanka. To support SME growth, the study proposes targeted legal provisions, digital transformation, e-commerce promotion, innovation support, and improved access to global markets.