A growing degree of uncertainty in the world economy–evidenced by rising unemployment levels stalled rate of job creation and muted economic recovery has renewed the focus on Small and Medium Scale business as a prime driver to unemployment generation and economic growth consequently policymakers are paying considerable attention to the specific role of start-ups and high investment in research and development as possible job creation. This paper examined the relationship between Small and Medium Scale business and employment generation and economic growth. The study adopted a survey approach; it covered five randomly selected Small and Medium industries in Lagos State. Description statistical tools (table figures and percentage) were used in presenting and analysing data. Data collected was coded, grouped into frequencies computed and arranged into tables for easy reference and analysis. The main methods of analyzing data collected for the study were a simple percentage for testing the research questions and correlation coefficient for testing the hypothesis. The empirical result reveals that ‘there is a positive relationship between Small and Medium scale business as a prime driver for Employment generation and Economic growth. It was also discovered that Small and Medium scale business played a significant role in the development of a nation’s economy. It was concluded that the future of industrialization process and job creation in developing economies, Nigeria, in particular, is largely dependent on the fortune of Small and Medium scale enterprise. The study, therefore, recommended among others that Small and Medium scale business should try to develop a good relationship with their suppliers, bankers, lawyers, management consultants and indeed all experts and utilize their services.