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The aim of the article is to define the relationship between local development and small and medium enterprises. The first part of this paper presents the main role of this sector in economy. The second part of this article is an attempt to identify factors, activities and behaviours that are essential for social and economic development. The next part presents barriers of development of this sector and changes in the legislation which can improve the functioning and position of SMEs. One can also notice that entrepreneurs are undoubtedly seen as the ones who contribute to local and regional development and, in this way, to socioeconomic development of a country.
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