Over the last decades, there has been an increasing awareness for the potential of technology in the acceleration of development. However, so far, the literature has concentrated mainly on large firms. Very little has been done concerning the importance of technology for the Small and Medium Enterprises (SME's) especially for the Small Island Economies. This study attempts to take this factor into consideration and is thus a contribution to the literature. An attempt is made to find the importance of technology policies for the survival of SMEs. The scope of this study is limited to the SMEs engaged in the manufacturing sector in Mauritius. The introduction of new technologies to SMEs is essential to increase their competitiveness. In contrast to large enterprises, SMEs have a greater flexibility to change their production capabilities at a faster rate. As such, the SMEs can react faster to any change that might occur. If good use of this capability is made, SMEs would thus have an advantage over the large firms. Recently there has been a shift from mass production to mass customisation. Technology is the major gateway to industrial development. Competition requires the employment of new updated technologies. The technology that was previously used is no longer competitive. In order to avoid growing external dependency, there is a need to allocate resources to establish a comprehensive framework for technological innovation capabilities.In fact, the latter is nowadays more important than technology itself. This is particularly important since technological capacities tend to become easily outdated.