8 - Thailand's SME Participation in ASEAN and East Asian Regional Economic Integration

Summary

Introduction

Thailand's small and medium-sized enterprises (SMEs) have played a pivotal role in the country's economic and social development (OSMEP 2014). They constituted 99 per cent of all enterprises in the country and contributed 73 per cent of total employment during the period 2007 to 2012. During this period, they contributed 33 per cent of total exports on average and approximately 38.8 per cent of total GDP at current prices on average (OSMEP 2013). Of the total SMEs over the period 2007 to 2012, almost one-third were in the manufacturing sector. Manufacturing SMEs employed around 27.1 per cent of the private sector workforce on average over the period 2007 to 2012 and their contribution to total SME GDP was 28.7 per cent over the same period.

The contribution of SMEs, especially manufacturing SMEs, is indicated in Table 8.1. While the contribution of SMEs to total business numbers remained stable, accounting for approximately 99.5 per cent of total enterprises over the period 2007–12, the contribution of manufacturing SMEs to total SMEs and the contribution of manufacturing SMEs to total enterprises declined from around 28.2 per cent and 28.2 per cent in 2007 respectively to around 17.7 per cent and 17.4 per cent in 2012, respectively.The contribution of SMEs to employment has gained a high level of importance due to their employment of more than 78.8 per cent of total workers over the period 2007–12. In terms of the contribution of manufacturing SMEs to the economy, around one-third of total workers employed by SMEs are in manufacturing SMEs which was equivalent to 26 per cent of total employment in 2012 (OSMEP 2007–13).

From Table 8.1 it can also be observed that SMEs accounted for around 37.5 per cent of GDP, at current prices, over the period 2007–12. These figures imply that large enterprises accounted for only 0.5 per cent of business establishments in the country over the period 2007–12, but contributed around 62.5 per cent of GDP over the same period. Punyasavatsut (2008, p. 294) pointed out that the contribution of SMEs to GDP remained restricted due to numerous common limitations on their operations, such as a lack of management capabilities, limited access to market information and promotional support from government agencies, a shortage of financial support or working capital, inadequate access to skilled labour, and uncertainties in government support programmes.