Those who love short-form fiction have had reason to cheer recently: the success of high profile competitions such as the BBC Short Story award, Sunday Times EFG Short Story award and the new Costa Short Story award; and now Alice Munro winning the Nobel after several decades of producing quietly brilliant volumes. A literary form declared dead on the slab a few years ago has proved to have a soft but resolutely pumping pulse.

At first glance, Zadie Smith's new volume might seem part of that resurgence. Numbering 69 small pages with a lot of white space, it's an extended story that first appeared in the New Yorker earlier this year and is now being published simultaneously as an ebook, audio book read by Smith herself and handy, pocket-sized hardback. The Embassy of Cambodia isn't a short story, though. It's a novel in miniature, divided into 21 tiny "chapters", each of which is a brief scene that encapsulates what many writers would take several thousand words to say. Reading it is a bit like having a starter in a restaurant that is so good you wish you had ordered a big portion as a main course, only to realise, as you finish it, that it was exactly the right amount.

It begins in a somewhat disconcerting manner – in the narrative form of the fourth person, or first person plural: "we". "Who would expect the Embassy of Cambodia? Nobody. Nobody could have expected it, or be expecting it. It's a surprise to us, that's all… we, the people of Willesden." At this stage, the reader might suspect Smith of having an in-joke at the expense of those who have stereotyped her as a poster girl for tales of cheery multiculturalism in a particular corner of north-west London.

Later this "we" turns out to be an elderly lady standing on a balcony of an old people's home, "barely covered" in her dressing gown: the kind of distressed yet omniscient figure who appears to command and control many an inner-city street. The main character of the novel is not this one-woman Greek chorus but Fatou, a domestic worker in a residential house who walks by the Embassy of Cambodia as she sneaks away from her servitude on Monday mornings to use a local swimming pool, gaining access with guest passes she has stolen from her employer.

Fatou is a character who really does deserve a full-length novel (or perhaps a film adaptation of this version), a proud and competent young woman in a position of great hardship who lacks any trace of self-pity or even anxiety, quietly performing her job, grateful for the small moments of selfhood she is allowed: her weekly stolen swim, her Sunday morning church visit followed by coffee and cake in a Tunisian cafe with a student, Andrew, whom she has met on a park bench thanks to his attempt to convert her to Catholicism.

When she is put in a disastrous position, it is Andrew who will be her saviour. Her feelings for him are ambiguous but just as she is much more than the classic victimised refugee, Andrew has a depth and a realism deftly sketched by Smith in the few brush strokes of this tiny, poised work: a perfect stocking-filler of a book that shows that short-form fiction can be as vibrant and as healthy as any densely realised full-length novel.

Louise Doughty's most recent novel is Apple Tree Yard (Faber & Faber).