Exploring relationship between the development of small and medium scale enterprises and the employment of universities graduate

BACKGROUND AND OBJECTIVES: Over recent years the employment creation discussion was massively raised especially about university graduates and demands from Iran s government increased. The prediction of the youth unemployment rate during the period from 2015 to 2021 showed that with an annual growth rate of 5%, in the last year of the period, the unemployment rate for youth would be equal to 9.36%, and for university graduates will be 36%. Therefore, the main purpose of this research is to provide an applied model for small and medium-sized enterprise (SME) development and university graduates’ employment in Iran. METHODS: In this regard, an appropriate model was defined by studying the literature about small and medium enterprises development models and extracting effective factors according to Iran’s situation.  In the second stage, after selecting a sample of 60 small and medium enterprises in Iran, in order to quantitatively testing the model, the data were collected by a questionnaire and were analyzed with the help of PLS ​​software. In the third stage, the relative importance of factors were tested from the perspective of 10 experts in the field of entrepreneurship with more than 15 years of work experience with the help of ANP and PROMETHEE methods. FINDING: The results shows the preference value (Φ) of these factors respectively include the parameters of: Technology, innovation, and competitiveness (Φ=0.72); Financial support programs (Φ=0.63); Education and consultancy services (Φ=-0.38); Cooperative relationships (Φ=-0.41); and Export development (Φ=-0.55). CONCLUSION: Changing market conditions enable SMEs to respond more agile and faster to customer needs, improve the quality of their products, reduce the cost of their production, and their tendency to recruit university graduates.