The Impact of the Business Environment on the Growth of Small and Medium-Sized Enterprises: The Manufacturing Industry in Oman

Abstract

Small and medium-sized enterprises (SMEs) manufacturing hold particularly significant potential when it comes to bolstering the country’s competitiveness in global markets and advancing the strategic goals outlined in Oman Vision 2040. However, this potential is held back by a wide array of entrenched challenges ranging from limited access to finance and high operational costs to inadequate infrastructure and a lack of skilled labour. The manifold links between these barriers have limited manufacturing SMEs’ ability to make a meaningful contribution to the country’s sustainable growth, as they have been prevented from capitalizing on their full potential. This study explores the environmental factors behind the growth and development of Omani manufacturing SMEs to address a critical gap in the literature regarding the dynamics of such growth in emerging economies generally and Oman specifically. This research’s academic contribution lies in its refinement of established theoretical frameworks (e.g., the resource-based view, the life cycle model) to account for the complexities associated with operating an SME in the Omani manufacturing sector. The study identifies various recurring themes (e.g., social-culture, the role of economy, and technology) by collecting qualitative data through semi-structured interviews with SME managers and representatives from SME-supporting organisations. This study’s qualitative analysis offers in-depth insights into the challenges currently facing Omani manufacturing SMEs. The thematic analysis of interview data revealed a rich range of sub-themes, derived from individual responses. These sub-themes served as a foundation for identifying main barriers and facilitators to SME development, thereby answering the primary research question: What factors influence the growth and development of Omani manufacturing SMEs? It was noted that societal norms, oil prices volatility, and regulatory policies were identified as barriers within the Omani context. The research findings offer actionable recommendations for both policymakers and stakeholders looking to bolster the growth and development of manufacturing SMEs in Oman and other emerging markets while laying the groundwork for future research on systemic inefficiencies and inclusive development.