This paper provides a comprehensive review of factors affecting the growth and development of SMEs in Bhutan. As far as possible regional literatures have been referred to analyze the challenges Bhutanese SMEs currently face. It is hoped that some suggestions made during the analysis of each of the factors/key challenges become useful indicators and guidelines for the government, and other relevant stakeholders and SMEs themselves to enhance growth of Bhutanese SMEs. It is hoped that case studies on successful SMEs entrepreneurs in Bhutan are studied to take as role models for entrepreneurial development in Bhutan. The ultimate success and effectiveness of the national SME program in turning the Bhutanese transition economy into one of the vibrant one in the region will depend on the level of commitment and the degree of co-operation between all these organizations including the SME itself.
The methodology used for this paper to collect holistic information of the SME in the Bhutan is through publications and papers. All the information in this paper is secondary statistical data from publications of different government agencies as well as international organizations. In addition, research papers on SMEs in the neighboring countries were referred to.
Table of Contents
1. BACKGROUND AND INTRODUCTION
1.1 Literature Review
1.2 Key Issues and Challenges for SMEs in Bhutan
2. CONCLUSION AND RECOMMENDATION
Objectives and Topics
This paper aims to provide a comprehensive review of the factors affecting the growth and development of Small and Medium Enterprises (SMEs) in Bhutan, identifying the primary barriers to their success and proposing strategies to mitigate these challenges in order to foster economic growth and alleviate poverty.
- Analysis of the current economic status of SMEs in Bhutan.
- Identification of critical constraints such as access to finance and skilled labor.
- Evaluation of the role of infrastructure and bureaucratic processes in SME development.
- Assessment of the nascent entrepreneurial culture within the Bhutanese population.
- Recommendation of strategic interventions for government and institutional stakeholders.
Excerpt from the Book
Key Issues and Challenges for SMEs in Bhutan
There is need to find out where exactly lies the drawbacks when it comes to the growth of SME by creating an inviting environment for investment in SMEs.
i. Limited access to finance for SMEs
Access to finance is found to be a constraint in 34.6 % of the 500 SMEs surveyed. According to Dalberg Global Development Advisors (2011) SMEs are strongly restricted in accessing the capital that they require to grow and expand, with nearly half of SMEs in developing countries rating access to finance as a major constraint. Lack of financial resources was identified as the most important barrier for developing and implementation of sustainable innovations in Luthuanian SMEs (Vasilenko & Arbaciauskas, 2012). Carter & Allen (1997) in Teoh & Chong (2008) stresses that having access to financial resources and emphasizing the financial aspects of the business had stronger effects on growth than did intention or choice.
Summary of Chapters
BACKGROUND AND INTRODUCTION: This chapter contextualizes the role of SMEs in the Bhutanese economy, highlighting their potential for poverty reduction and economic diversification despite current developmental hurdles.
Literature Review: This section examines global perspectives on SME contributions to economic growth and identifies recurring bottlenecks such as financial constraints and technological gaps.
Key Issues and Challenges for SMEs in Bhutan: This chapter provides an in-depth analysis of specific obstacles in the Bhutanese context, including limited access to finance, labor skill shortages, infrastructure deficits, and administrative burdens.
CONCLUSION AND RECOMMENDATION: This chapter synthesizes the findings and emphasizes the necessity for in-house business research and improved decision-making capacity to ensure the sustainability of SMEs.
Keywords
Small and Medium Enterprises, SMEs, Bhutan, Economic Growth, Poverty Alleviation, Access to Finance, Entrepreneurship, Infrastructure, Business Development, Labor Market, Innovation, Policy, Licensing, Industrialization, Sustainability
Frequently Asked Questions
What is the core focus of this research paper?
The paper focuses on the current state of Small and Medium Enterprises (SMEs) in Bhutan, analyzing the factors that impede their growth and potential to contribute to the national economy.
What are the central thematic areas covered?
The central themes include financial accessibility, human resource development, infrastructural limitations, bureaucratic hurdles, and the evolving nature of entrepreneurial culture in Bhutan.
What is the primary objective of this study?
The primary objective is to identify the causes of SME failure in Bhutan and to suggest actionable strategies for stakeholders to enhance their competitiveness and growth.
Which methodology was applied to conduct this research?
The study employs a secondary research methodology, utilizing statistical data from government publications, international organization reports, and comparative studies on SMEs in neighboring countries.
What topics are discussed in the main body of the work?
The main body covers the economic importance of SMEs, a review of existing literature, a detailed breakdown of developmental constraints, and the significance of fostering an innovative entrepreneurial mindset.
Which keywords best characterize this publication?
The paper is characterized by terms such as SMEs, Bhutan, poverty alleviation, economic development, and business constraints.
Why is the 11th Five Year Plan mentioned in the context of job seekers?
It highlights the massive influx of educated youth into the labor market and underscores the urgent need for SMEs to absorb this workforce through appropriate development policies.
How does the author propose to address the issue of skilled labor shortages?
The author advocates for strengthening vocational institutions, increasing their intake, and ensuring training programs are contextually relevant to the specific needs of SMEs.
What impact do bureaucratic processes have on new business registrations?
The paper notes that traditionally long and cumbersome administrative processes acted as a significant deterrent, although recent efforts to decentralize and simplify these requirements are expected to improve the situation.
Why does the author argue for in-house research within SMEs?
Because SMEs often lack the resources to hire external consultancies, the author argues that conducting in-house research using statistical tools is essential for informed decision-making and market competitiveness.
- Quote paper
- Tshewang Dorji (Author), 2017, Privatization Gap in Bhutan. A Study on Small and Medium Enterprises in Bhutan, Munich, GRIN Verlag, https://www.hausarbeiten.de/document/355491
