Micro, small, and medium enterprises (MSMEs) contributed more than one-third to
in the second quarter of 2023. The sector's significant contribution to Thailand's output also drives the rise of other key economic indicators, most notably job creation and foreign commerce. In recent years, most of the MSMEs hiring were in the service sector. Moreover,
has been gradual since 2017, except for a significant decline due to the COVID-19 pandemic in 2020. Despite the downturn, the sector significantly recovered its international trade growth and expanded its exports to key trade partners such as China, the United States, and Japan. From manufacturing to offering trade and services, whether food, agriculture, or small hotels, MSME businesses have embedded themselves comprehensively and are, without a doubt, an important foundation of Thailand’s economic system.
Journey of MSMEs in Thailand
MSMEs in Thailand resulted from foreign direct investment impacting agricultural enterprises and causing them to migrate into the manufacturing and services sectors. Given that the agricultural businesses dispersed throughout the country were largely held by families and small independent entrepreneurs, small agricultural firms later grew into small and medium enterprises (SMEs) that expanded their reach into other industries due to the transformation. The Office of Small and Medium Enterprises Promotion (OSMEP) of Thailand categorized SME businesses into micro, small, and medium enterprises (MSMEs). Meanwhile, manufacturing, agriculture, service, and trade are the
main sectors of Thai MSMEs. MSMEs in Thailand are usually run by independent entrepreneurs and operate on tangible assets. With low investment required, business owners invest their capital or take out bank loans. Technological spillover from international investment such as the rise of
Thai e-commerce market value, promotes the creation of SMEs, contributing to overall production growth and transforming Thailand's economic system into a capitalistic free market. Moreover, most of
MSMEs in Thailand incorporate online platforms such as Facebook and LINE in their operations. As a result, market entry for firms is nearly frictionless, allowing SMEs to thrive and contribute considerably to Thailand's economic growth.
Business support and financing as an MSME
The OSMEP oversees market entry and policies for MSMEs in Thailand. The organization primarily pushes MSMEs to reach specific goals, such as reaching a desirable level of liquidity, integrating digital platforms, and educating MSME personnel. The OSMEP has put effort into moving Thai MSMEs into the digital economy and introducing smart systems among entrepreneurs. The Thai Government also applied the Bio-Circular-Green Economy (BCG) concept on MSME businesses to achieve both growth and sustainability. Apart from governmental organizations, commercial banks have also acknowledged the significance of MSMEs and provided loans to attract corporate customers in this sector. Banks provided credit assistance and debt restructuring for MSMEs in times of need, especially during the COVID-19 pandemic. In terms of the
entrepreneurial sentiment index, the result shows that entrepreneurs still had business confidence in the third quarter of 2023. MSMEs in Thailand have received continuous support in recent years to maintain the sector’s growth and stability.
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