Enhancing SME impact on Economic Development in Sultanate of Oman

Abstract

Small and medium-sized enterprises (SMEs) are a significant driving force behind Oman's economic growth. The government, academics, and economists agree that promoting entrepreneurship and small business development is an effective strategy for economic development. The purpose of this study is to investigate the role of SME entrepreneurs in economic development and examine the impact of SMEs on capacity building, employment generation, competitive markets, and technological development in Oman. The research design is empirical, and data was collected from 174 SME entrepreneurs in Oman. Structural Equation Modeling analysis revealed a significant and positive indirect effect of SMEs on economic development, with a path coefficient of 0.274 and a t-value of 2.562. From a socio-economic perspective, SMEs provide various benefits, including job creation, human capacity building, promoting competitive markets, and developing new technologies. Therefore, it is essential for governments to recognize the contributions of SMEs to national economy and wealth creation from the outset and incorporate them into the economic development process. The study's findings will provide guidance for developing new SMEs and understanding the expected role of SME entrepreneurs in contributing to economic development in Oman through capacity building, employment generation, promoting competitive markets, and technological development.