Small wheels are used primarily to reduce the overall length of long wheelbase designs, and to improve heel clearances on short wheelbase designs. But it turns out there are other advantages to small wheel designs. Road racers using 700C rims are quick to point out that smaller rims have higher rolling resistance. At around 20 mph, aero drag becomes a bigger factor than rolling resistance. So small wheels contribute to higher top speeds.
Smaller wheels are also lighter weight, and lighter wheels make a bike accelerate faster.
Recumbents are now being manufactured in sufficient quantities that tire makers have started making high quality tires in suitable sizes for recumbents. As a result, Rotator is using the ERTO 406 rim size as a standard on its bikes. Most recumbent designs use a small front, and a large rear wheel. Since the rear wheel is behind the rider's body, aerodynamic drag is not as much of a concern. We solved the gearing problem by developing a mid-drive system with two freewheels.