ABSTRACT
This chapter aims to unveil the changing role of small and medium sized enterprises (SMEs) in local economic growth, with special reference to the case of Denizli, which has experienced and achieved remarkable economic development. It discusses the transformation of the role of SMEs in the economic growth process in four ways. The first two summarize the roots of economic growth and the role of SMEs in this process, from the early years of the Turkish Republic to the 1980s. The third, focuses on the peaceful relations between small and large firms, in order to integrate with the global production networks in the 1980s. In the fourth, the textile boom of the 1990s is analysed as a transformative pressure on the textile production organization and institutional structure. Finally, after revealing the basic characteristics of the transforming nature of the role of SMEs in the growth process, it remarks on some of the issues concerning the future economic growth of Denizli.
