Startsups and Smes in Thailand … Dissertation
Pages: 55 (15471 words) | Style: Harvard | Sources: 65
Business Development of Start-Ups and SMEs with the use of Technological Advancement in Thailand
Factors affecting business success of small and medium enterprises (SMEs)
Definitions of key terms
Factors affecting business success of SMEs
Virtual and augmented Reality impact on SMEs
Challenges Faced by SMEs in a Virtual World
Selected research method
This study aims to investigate both internal and external elements that hamper the growth and development of Small and Medium Enterprises located in Thailand. This study is critical, especially in present times, due to not only the economic turbulences created by global economic giants but also the vital role this section plays in the Thai economy. While Small and Medium Enterprises in the developed economies integrate and adapt well to changing technological interface, Small and Medium Enterprises in the developing economies, like Thailand, struggle to do the same. This study uses qualitative interviews to gauge the problems being faced by Thai Small and Medium Enterprises in terms of accessing loans and adapting to new technology, like Virtual Reality and Augmented Reality. The results indicate that accessing necessary finance is a problem for Small and Medium Enterprises in Thailand as is the case in other developing economies. Furthermore, adapting to new technology is also problematic for Thai Small and Medium Enterprises. Furthermore, there is lack of talented and skilled labor that complicates the problems further and reduces productivity and efficiency. Adoption to new technology like augmented reality and virtual reality requires new and innovative solutions to be implemented that can help reduce the problems of change and transformation at the organizational level.
There are different definitions of small and medium enterprises (SMEs). This is because of the diversity of small business, thus every simple definition of what an SME is, is subject to criticism. According to Institute For Small and Medium Enterprises Development in Thailand enterprises have been defined in three broad categories:
1. Service sector
2. Trading sector (encompassing retail and wholesale)
3. Production sector (manufacturing and agricultural processing)
The types of small and medium sized businesses in Thailand have been defined based on the following:
1. Value of assets that each enterprise is worth
Service sector: small sized companies are those worth less than 50 million baht, while medium sized companies are worth between 50 and 200 million baht.
Trading sector: has been broken down into two: retail and wholesale. For retail small sized enterprises are those worth less than 30 million baht while medium sized are those worth between 30 and 60 million baht. While for wholesale small sized enterprises are those worth no more than 50 million baht while medium sized are those worth between 50 and 100 million baht.
2. The number of employees employed in each type of enterprise
Service sector: small sized enterprises are those with no more than 50 full-time employees while medium sized are those with no more than 200 employees.
Trading sector: for retail small sized enterprises are those with no more than 15 full-time employees while medium sized are those with no more than 30 employees. While for wholesale medium sized enterprises are those with no more than 50 employees.
Production sector: small sized enterprises are those with no more than 50 full-time employees while medium sized are those with no more than 200 employees (Norlaphoompipat, 2008).
Research reveals that small and medium sized enterprises play a huge role in the growth of the economy of any country. Subsequently, the growth of the sector is closely linked with the economic performance of the nation. In Thailand, for instance, SMEs form significant parts of various sectors of the economy. In the manufacturing segment, for example, SMEs account for 93.8% of all companies. Furthermore, of the total number of SMEs in this segment of the Thai economy, small enterprises account for 76% while medium enterprises account for 17.8% of all manufacturing companies. More than 90% SMEs in Thailand employed approximately 868,000 workers, or about 38.9% of the total workforce in the manufacturing segment. Past studies in the country like in many other growing economies have greatly focused on large firms and with little or no research being done in the SMEs sector. This is despite the fact that changes in the economy usually result in more severe impacts in the SME sector than in the large manufacturing firms (Chittithaworn, et al., 2011).
It is obvious to many observers that SMEs play a critical part in the economy of Thailand. In the year 2012, for example, Thailand had some 2.7 million small and medium enterprises which accounted for about 98.5% of all the companies in the country. Still, during the same year the SMEs generated about 37% of the Thai GDP (gross domestic product) and about 80.4 of its total workforce. In terms of total imports and exports, the SMEs accounted for 31.9% and 28.8% of the two respectively. In Thailand, the percentage of workers employed in the SME sector grew from 76% in 2007 to 80.4% in 2012. In the same year the number of people employed in the manufacturing, trade and service sectors of the SME segment accounted for about 30% workforce in the segment. During the same period of time, employment in the SME trading sector increased by approximately 5%, while the figure in the overall manufacturing segment of the economy were down by 6.2%, which was accounted for by a decline in the growth of SMEs in that sector. The total growth rate of small and medium enterprises in the Thai economy declined from a high of 8.3% 2010 to a low of 7.3% in 2012. According to the researchers, the contribution of the small and medium enterprises to the Thai total GDP stood at 37% which was far higher than that of its neighbor Malaysia where SMEs accounted for 32.7%. However, compared to Indonesia, the Thai SME sector lags far behind, since SME's in Indonesia accounted for a substantive 59.1% of its gross domestic product in 2012. The contribution of SMEs to the Thai GDP dropped by 1.7% from 2007 to 2012, while the two neighbors Indonesia and Malaysia saw a rise in the contribution of small and medium enterprises to their GDPs in the same period of time (Yoshino, et al., 2015).
Since the year 2010, the exports in the Thai SME segment have been far less than imports. Import growth, which stood at negative 8.8% further declined to negative 21% in 2009 but recovered to 3.5% in 2012. The greater number of imports recorded in 2012 were due to the decline in the number of manufacturing SMEs in the country. The growth rates of both exports and imports stood at roughly 3.5% in 2012. To stimulate growth the Thai government started looking into SME development plans and policies, they then identified and financed major SMEs mostly in the agricultural and manufacturing sectors. However, research has shown that such SMEs development plans and policies cannot achieve the desired economic growth; this is because based on the financial management theory only business investments of high risk result in high returns. The agricultural SMEs that were selected for the plan were low risk businesses and thus they could only bring about low returns. Thus, if the government of Thailand wanted to stimulate economic growth, there was a need for investments in high risk sectors. And thus the foundation of this research is based on one of such high risk investments i.e. high technology businesses. The discussion of high technology particularly IT SME development, performance and strategies will be the foundation of this research. Such information will be beneficial to the government of Thailand's SME development policies (Yoshino, et al., 2015).
The goals of this study are to: identify the strategies used by high --tech firms to innovate and; discuss and form a guideline that can be used by SMEs interested in gaining a foothold in the high-technology sector. The objectives of this study are to identify and discuss business start-up factors and performance via carrying out research in 5 of Thailand's top SME's in the high technology sector and to also investigate their growth patterns in the last three years. Case studies are helpful in cases like this one since they provide a comparative tool that allows us to compare the growth patterns and factors in one company against those of another (Intrama, n.d.).
These days augmented reality in smartphones attracts plenty of attention since the technology uses special software that allows users to turn their phones into virtual displays. Customers that use mobile applications anticipate a captivating experience that is attractive and useful. Leveraging augmented reality can improve existing businesses and even help develop fresh businesses (Infosys, n.d.).The lack of communication between enterprises and peripheral decision makers like the customers can be significantly reduced through the implementation of IVR (Immervise Virtual Reality). Studies indicate that IVR support SMEs in several areas of their external and internal decision making processes and IVR's superiority over 2D technology in carrying out communication (Eisenhardt, 2007;… [END OF PREVIEW]
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