Globalization has changed how small and medium-sized businesses operate. It has made it easier for them to do business internationally and has shifted the focus to knowledge-based activities. This study looks at how globalization has impacted these businesses, their strategies, and their performance. It also explores how clusters and networks help SMEs compete globally, the role of foreign direct investment, and the importance of technology transfer. Additionally, it examines how SMEs in developing countries are affected and suggests policy changes to help them overcome international barriers.