In many countries, small and medium-sized enterprises based on entrepreneurship make a generator of economic growth and employment, while in the European Union their development is placed in the centre of politics on the highest level of decision making. Statistic Indicators in Croatia show that SMEs play an important role in economic development,which is particularly expressed through their share in the total number of enterprises, number of employees, total income and profit of the companies and exports. Despite this fact, indicators of economic growth,employment and unemployment trends as well as the competitiveness of the national economy in Croatia point to distinct variable trends, especially unfavourable in the period from 2009. to 2017. After taking all these facts into consideration, the following research guestions arise: How to increase the economic efficiency of small and medium enterprises and their share in the creation of the gross domestic product? Can our small and medium enterprises represent the actual potential of economic prosperity? In answer to these questions, some theoretical and empirical researches have been conducted, which resulted in certain understandings about possibilities and contraints of development process of small and medium enterprises. Corresponding recommendations both for managers and owners of small and medium enterprises and for the creators of public policies for entrepreneurship have been created. These recommendations emphasize the importance of education and structural changes in the creation of entrepreneurial climate and regional context, within which small and medium enterprises function, and which are the main determinants of their dynamic development. After defining the goals and methodology of the research, the structure of dissertation was developed, and is made of six chapters: 1.Entrepreneurship, small and medium enterprises and economic growth in an evolutionary process 2.Relevance between the economic growth and regional development 3.The importance of interaction between entrepreneurial environment and conditions of running business as generator of economic growth 4.Business excellence, innovativeness and networking of small and medium enterprises-key to sustainability in global competitiveness 5.Empirical research on entrepreneurship development as well as of small and medium enterprises in the NUTS-2 region Northwest Croatia 6. Key reviews and trends for further researches.