ABSTRACT
This chapter examines the economic development with focusing on the development of manufacturing sector and its consequences on changing economic structure, inflation rate, unemployment rate as well as the demand for human resource in the country. It discusses the definition of SMEs in Malaysia while characteristic and contributions of Small and Medium Enterprises (SMEs) are reviewed in the fifth and sixth parts respectively. SMEs which are mostly endogenously-based enterprises, their linkages with large-multinational corporations in Malaysia can be seen as a mean or the same goal indirectly by encouraging large firms to foster the growth and expansion of SMEs. Malaysia is rather fortunate having experienced a phenomenal economic growth. Among the factors that have influenced and brought about high demand for manpower at various level of skills and economic sectors are globalisation, economic growth, structural transformation of economy and rapid growth of industrial sector.
