Global Wealth has almost doubled since 1990, but nearly half the world's population subsists on less than US$2 per day. Poverty remains a major challenge to sustainable development, environmental security, global stability and a truly global market. They key to poverty alleviation is economic growth that is inclusive and reaches the majority of people. Improving the performance and sustainability of local entrepreneurs and small and medium enterprises (SMEs), which represent the backbone of global economic activity, can help achieve this type of growth. This Issue Brief explains how governments can help alleviate poverty by focusing on SMEs in their value chains. It describes some of the comparative advantages of SMEs and the challenges they face in developing countries.