The importance of small and medium size enterprises (SMEs) for economic development is frequently debated. SMEs have been called “the backbone of the European economy and the best potential source of jobs and growth”. Political intentions are expressed in numerous programmes, strategies, and organizations, all claiming that their objective is to assist SMEs.

The purpose of the thesis is to explore the interaction between political aspirations and adequate solutions to SMEs’ challenges.

The thesis adopts a comparative perspective, using two completely different cultural, institutional and historical contexts, the Italian region Tuscany and the County of Jönköping. The study follows bottom-up logic, starting off with interviewed businesspersons’ and other actors’ narratives on how they organize to face and deal with challenges and opportunities. The challenges and possibilities and the problem solving processes described by SMEs are outlined through the identification and description of four case studies.

Narratives by businesspersons and other actors indicate that only a few of the aspirations and strategies expressed by politicians and decision makers, who elaborate the objectives of SME policy, actually reach enterprises. A gap seems to exist between aspirations and realization. The study suggests that an important part of the explanation to the missing link is found in the different lifeworlds of SMEs, politicians and other decision makers.

How can the gap be bridged? The study concludes that policy is not statements only; it is organizing. For organizing to ensue, individuals with a common definition of challenges need to get together. The concept of lifeworlds cannot be ignored.