It is important to identify sources of industrial investment growth from policy planning perspective, due to importance of manufacturing industries as the engine of economic development. SME formation is one of these sources that its impact on investment process with various methods has been studied. However, each of these studies used their specific angle and in some cases, these studies have reached different conclusions. On the other hand, many of the previous studies have applied statistical approaches and short-term, medium-term and long-term consequences of the solutions that have proposed by these studies has not considered at the same time. Therefore to address this deficiency, the holistic approach (system thinking) used to study impact of SME formation on investment growth. System Dynamics (SD) method used as a tool for implementing system thinking approach in order to use its capabilities in complex systems modeling and for achievng suitable results from simulation model. The population is Fars province in Period of 1360-1410. Vensim software has used for modeling and simulating. The results from the simulation of designed model showed, there is direct and interactive relationship between SME formation and amount of industrial investment.


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