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Synopsis The small-scale industries are viewed as an important vehicle for meeting both growth and equity objectives of developing economies. The last two decades have witnessed the steady re-emergence of small-scale industries in both industrialized and industrializing countries, reducing the importance of economies of scale in mass production. Small and medium-sized enterprises (SMEs) need to continually innovate and seek competitive advantages in order to exist, sustain and grow. They are faced with pressures to slash production costs, increase productivity and have to be necessarily more knowledge-driven. Globalisation has created more pressures on the one hand while on the other, greater incentives and opportunities have opened up giving access to overseas markets and knowledge sources. This enables leveraging of these multifarious options to build lasting competitive advantages and to support continuous innovation. In most developing countries SMEs constitute the bulk of the industrial base and contribute significantly to their exports as well as their GDP and GNP. For instance, India has nearly three million SMEs which account for almost 50% of industrial output and 42% of India’s total exports. SMEs play a crucial role in the development of all developing economies. SMEs are considered to be the base of every national economy, generating about 50 percent of the countries’ gross national product. The main reasons are that they are capable of quickly adapting to exacting customer demands as also they are capable of generating large employment potential.