 Hi students, we are discussing cross-border alliances and in cross-border alliances, we have discussed different forms of cross-border alliances which are mergers and acquisitions and international joint ventures. Now another form of cross-border alliance because mergers and acquisitions as well as international joint ventures, they usually take place in multinational enterprises. There is another form of enterprises existing in the economy which play a very important role in the economy of the entire world as well as the economy of individual nations. And these are SMEs, small and medium enterprises. Regarding how to define an SME, there is no strict definition of an SME. The European Commission definition of 2005, it defines SMEs by three criteria. So SME can be defined by using a headcount, how many people are working in that organization, secondly on the basis of annual turnover and third annual balance sheet total. So according to the European Commission definition of 2005, medium-sized enterprise is that which is employing 250 or less people or has an annual turnover of 50 million euros or less or has an annual balance sheet total of 43 million euros or less. That is a medium-sized enterprise or a small-sized enterprise is the one which employs 50 or less people, has an annual turnover of 10 million euros or less or has an annual balance sheet total of less than 10 million euros or less. In Pakistan, the definition of SME, the cut off values for SMEs are a little bit different and in rupee amount. According to the SME policy 2007, an enterprise is considered a small or medium enterprise if it has up to 250 employees or up to rupees 25 million paid up capital or up to rupees 250 million annual sales. So that is the criteria of an SME and in European Commission policy you saw that a medium enterprise and a small enterprise is differentiated whereas in Pakistan the SME is considered as one category so small and medium enterprise only one criteria is there, 250 or less employees and 250 million paid up capital or 250 million annual sales up to that number. So for Pakistan an SME is considered, an organization is considered to be an SME on these criteria. SMEs they play a very important role in the entire economy of the world. So in European area and Sweden 99% of 16 million enterprises in EEA and Sweden are SMEs. So 99% enterprises in Europe are SMEs and two thirds of the jobs are provided by the SMEs. In Asia Pacific region 90% of all enterprises are SMEs and about 32 to 48% of employment is provided by the SMEs. Similarly in America 80% of the employment is provided by the SMEs with enterprises having less than 20 employees. So 20 employees have become key organization of firms they are providing 80% of employment in the Americas. In Pakistan the figures are 70% of employment is provided by the SMEs and 80% of the enterprises are SMEs. So you can see that SMEs they hold a huge importance in economy of the entire world and also for Pakistan. So that is how you define an SME and that is the importance of SME for the entire world.