Productivity analyses typically focus on relatively aggregated industries, masking the heterogeneity in productivity among firms within the same sector and, in particular, the contribution of SMEs; these recognised as important drivers of growth as they scale-up. In this sense, firm heterogeneity matters for productivity. To the extent that large firms can exploit increasing returns to scale, productivity tends to increase with firm size. However, new small firms are often found to spur aggregate productivity growth as they enter with new technologies and stimulate productivity-enhancing changes by incumbents.