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It is widely known that Thailand's economy is highly dependent on exports of products and services. For almost the past two decades, industrial products have accounted for over 70% of overall export revenues. Since then, local support industries have helped rebuild the country's industrial sector. Small and medium-sized businesses (or SMEs) are essential to supporting industries. Thai SMEs have developed in response to government development policies and the evolution of the global economy (Sumipol, 2018). Currently, it is commonly acknowledged that small and medium-sized enterprises (SMEs) are crucial to the nation's economy. According to Kamunge, Njeru, and Tirimba (2014), SMEs are gaining importance in terms of employment, wealth creation, and innovation development. They are very important to national economies all over the world because they create jobs and income, contribute to innovation and the spread of information, meet new or niche social needs, and help bring people together (OECD, 2017).
In addition, they are recognized as the most effective economic growth engines. Moreover, SMEs create the largest profit margins for the nation when compared to larger firms, which spend a significant amount of their earnings on imported machinery, technologies, and supplies. In addition, SMEs contribute to the growth of wealth and prosperity in rural regions of the nation. According to a recent research undertaken by the Office of Small and Medium-Sized Enterprises Promotion (OSMEP) of the Ministry of Industry, Thailand has 2,9 million SMEs, representing 99 percent of the country's total number of businesses. This resulted in the creation of 9.7 million jobs and additional revenue of 3,400,000,000 baht. They contributed 37.2% to the nation's gross domestic product and earned 1.59 quadrillion baht in exports. OSMEP also claimed that in 2019, micro enterprises and small and medium-sized businesses (MSMEs) created 5,963,156 million baht in GDP, or 35.3% of the national GDP. It climbed by 34.6 percent at a rate of 3.0 percent, a decrease from the previous year's rate of 5.5 percent. Micro enterprises (Micro) contributed 496,187 million baht (2.9%) to GDP, while small enterprises (SE) contributed 2,575,443 million baht (15.3%), and medium enterprises (ME) contributed 2,891,526 million baht (17.1%). Their growth rates were 8.6 percent, 0.7%, and 3.9 percent, respectively (The Office of SMEs Promotion, 2021).
There is a lot of competition among SME owners and entrepreneurs in Thailand because of the country's fast-paced business environment. For example, external elements like socio-culture, technology, the economy, politics, and the law have an inevitable impact on the success of SMEs, yet internal factors such as organizational infrastructure and strategy have an undeniably tremendous impact. According to Aas and Breunig (2017) and Yoo and Kim (2015), businesses must be able to effectively manage change in increasingly volatile and complex service eco-systems in order to prosper in the globalized and hyper-speed business climate of the present day (Crossan & Apaydin, 2010; Francis and Bessant, 2005). Nevertheless, according to Arinaitwe (2002), SMEs are frequently confronted with several difficulties that hinder their long-term survival and growth. Small company development research reveals that the failure rate in underdeveloped countries is substantially greater than in industrialized nations. In addition, Kamunge, Njeru, and Tirimba (2014) affirm that SMEs are increasingly encountering competition not only from direct competitors but also from major enterprises operating in specialty areas that were formerly thought to be exclusive to small businesses. According to Amyx (2005), one of the most significant barriers is a negative perception of small and medium-sized businesses. Prospective clients believe that small enterprises lack the capacity to provide high-quality services and are incapable of simultaneously completing many vital tasks. Frequently, larger companies are selected and awarded contracts solely on the basis of their brand recognition (Bowen, Morara and Mureithi, 2009). Inadequate planning, inadequate money, and inefficient management have been mentioned as the leading causes of small business failure (Longenecker, 2006).