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close this bookNeeds and Characteristics of a Sample of Micro and Small Enterprises in Thailand - Working Paper N5 - Micro and Small Enterprise Development and Poverty Alleviation in Thailand - Project ILO/UNDP: THA/99/003 (ILO-ISEP - ILO - UNDP, 1999, 102 p.)
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View the documentForeword
View the documentPreface
Open this folder and view contents1.0 Background
Open this folder and view contents2.0 Survey of selected Thai urban-based MSEs
Open this folder and view contents3.0 Characteristics, problems and needs of Thai MSEs
Open this folder and view contents4.0 Notes on statistical findings
View the document5.0 Recommendations
Open this folder and view contentsAnnexes
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(introduction...)

By Maitree Wasuntiwongse

SERIES EDITOR: GERRY FINNEGAN
July 1999

International Labour Office
ILO East Asia Multidisciplinary Advisory Team
ILO Bangkok Area Office
ILO Regional Office for Asia and the Pacific

ILO International
Small Enterprise Programme

United Nations
Development Programme

This working paper, and the other five in this series, are issued for discussion purposes, in advance of a formal publication drawing on the conclusions of all six. Neither this paper, nor the others in this series, should be considered to represent the position of the Office.

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July 1999

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Foreword

I am pleased to see this series of reports as outputs from the recent collaboration between ILO and UNDP in Thailand in the form of the Micro and Small Enterprise Development and Poverty Alleviation Project in Thailand. As the UN agency with special responsibility for employment matters, the ILO is concerned about employment in all sizes of enterprises, in both the formal and informal sectors. The ILO is equally concerned about the quality, as well as the quantity, of jobs created. This point is well amplified in the recent report on “Decent Work” by the ILO Director-General, Mr Juan Somavia.

From related studies carried out by the ILO following the financial crisis in East Asia, it is apparent that both the level of employment and the quality of employment conditions in Thailand have both adversely affected by the crisis. Consequently, the work being undertaken by this project is most timely, assessing as it does the role of micro and small enterprise (MSE) development in poverty alleviation and employment creation.

Governments are no longer expected to be the principal providers of jobs - jobs are created by successful, well-managed private sector enterprises. However, governments do have a vital role to play in ensuring that the policy environment is ‘enterprise friendly’. The path into enterprise should be smooth, and entrepreneurs should be able to receive relevant advice and support (both financial and non-financial) in a highly effective manner from both government and private sector agencies. The needs of the MSE sector should be clearly identified, and linked with a better understanding of the scale and scope of the enterprise sector and its role in national development.

All of these important aspects are addressed in this set of six working papers. Together they provide a substantial body of knowledge and significant inputs for policy-makers and decision-makers in Government, the private sector, international organizations and the donor community, as well as for entrepreneurs themselves.

Given the prominence of the small and medium enterprises (SME) sector in Government policy, this information is being made available at an appropriate time. It is also highly relevant, coming as it does at a time when the ILO is carrying out a Country Employment Policy Review in Thailand, as well as providing support to make its Start and Improve Your Business (SIYB) training materials available for extensive use in Thailand.

W R Simpson
Director, ILO/EASMAT
Bangkok, Thailand
July 1999

Preface

This working paper, The Needs and Characteristics of a Sample of Micro and Small Enterprises (MSEs) in Thailand, prepared by Maitree Wasuntiwongse, has been produced as part of the ILO/UNDP project on Micro and Small Enterprise Development and Poverty Alleviation in Thailand (THA/99/003). A full description of this project can be found in the project document which is available on request.

This series of six working papers is the combined output from the team of national and international consultants engaged by the ILO in Thailand between March and June 1999. Preliminary findings for each of the reports was shared with a group of key informants at a workshop/consultation, held at the Royal Princess Hotel, Bangkok, in May 1999. We are indeed grateful for all comments and feedback received at that workshop. While every effort has been made to ensure the accuracy of the information in these reports, we regret any omission or error contained herein. These working papers are intended as a means of advancing the public debate on the small enterprise sector in Thailand, and the ILO is eager to share this information with the widest possible audience.

The term “micro and small enterprise” (or MSE) is not commonly used in Thailand, as more frequent reference is made to the designation of “small and medium enterprise”, or SME. Each of the ILO consultants has made some reference to the issue of definitions of micro, small and medium enterprises, and Paper six in the series is dedicated to this topic. Therefore, to facilitate a clear and unambiguous understanding of these working papers, we have been at pains to make distinctions between different categories of small enterprises. We believe that the issue of definitions is not simply one of semantics.

One basic premise of this project is that there is a significant number of smaller enterprises which do not fit into the conventional enterprise support programmes of the Royal Thai Government. With targeted forms of support, these enterprises could improve their productivity and competitiveness, make a greater contribution to generating wealth and alleviating poverty among the families of owners and workers alike, and create more jobs.

The ILO has been supporting micro and small enterprise development for more than three decades. In 1998, in a significant landmark event for the Organization, the ILO’s Conference - at which Thailand was represented - unanimously adopted a new Recommendation 189 on Job Creation and Small and Medium Enterprises. Because of its extreme relevance to the subject of our enquiry, we have reproduced this Recommendation as an Annex. Particular attention is drawn to sections 7, 8 and 12, dealing with collection of data, actions in times of economic difficulties, and relevance and efficiency of support, respectively. In addition, to coincide with this new Recommendation, the ILO launched a global International Small Enterprise Programme (ISEP) to provide technical assistance for member countries, including Thailand. The work carried out under this ILO/UNDP project is also part of the ILO’s ISEP programme.

Gerry Finnegan
Senior Specialist & Series Editor
ILO/EASMAT, Bangkok
July 1999

(introduction...)

Micro and small enterprises (MSEs) are increasingly seen as potential creators of new employment opportunities and additional incomes contributing to improved social and economic well-being, as well as to the alleviation of poverty. Together with the financial and economic crisis of 1997, this has prompted the Royal Thai Government (RTG) to review its policy for promoting and supporting small and medium-sized enterprises (SMEs) in Thailand. In this context the United Nations Development Programme (UNDP) has engaged the ILO in a project to provide Support Services for Policy and Programme Development (SPPD) in the field of Micro and Small Enterprise (MSE) Development in Thailand, in order to provide information and recommendations to the policy formulation of the Royal Thai Government (RTG), as well as to the programme development procedures of international organizations and the donor community.

The SPPD project includes a series of technical inputs prepared by the ILO. They are:

· Working Paper 1: Review of BDS assistance and activities of support agencies for MSE development;

· Working Paper 2: Review of international best practices in business development services (BDS) appropriate to MSE development in Thailand;

· Working Paper 3: Review of policy, legal and regulatory environment for MSE development;

· Working Paper 4: Review of financial support services for MSE development;

· Working Paper 5: Review of problems and needs of MSE operators as experienced at the local level in selected urban areas.

· Working Paper 6: Although not originally planned, a substantial amount of information was gathered in areas including the definitions of MSEs, and their contribution to employment and the national economy. Consequently, this information was put together as working paper 6.

This report, working paper 5 in the series, consists of a review of problems and needs of a number of Thai urban-based MSEs. It is based upon the result of a survey of MSEs made in Bangkok and urban Phetchaburi (a province 120 km. south-west of Bangkok), and carried out during April - June, 1999. Considering the vast experience of the ILO in working with MSEs in developing countries, together with a number of studies previously undertaken by agencies in Thailand, the survey was designed to confirm or verify former knowledge of the MSEs. Hence only a small sample of 100 enterprises was aimed for in the survey, although in effect 104 enterprises were actually surveyed.

1.1 An overview of problems and needs of MSEs

MSEs as referred to in this project are those business enterprises characterized by size, as well as by the way they are operated. They are considered micro and small based on the size of their business volume, the value of assets, and/or the number of people working1. They are usually operated and managed solely by an individual entrepreneur. Unlike medium-sized and large enterprises which usually have a management team to oversee various business functions such as marketing, finance, operation, human resource development, technology management, engineering, and research and development, etc., in MSEs the entrepreneurs normally perform all these functions by themselves. Thus the effectiveness and efficiency of an enterprise of this type would depend solely upon the entrepreneur’s management skills (or the lack of them), unlike in medium and large enterprises where skilled managers are recruited from the labour market. In addition, while most medium-sized and large firms generally posses enough resources to recruit additional specialist services from outside when needed, most MSEs cannot afford this type of support.

1 See Working Paper Number 6, prepared by Maurice Allal.

Thus MSEs, especially when operating in the same environment as the medium-sized and large firms, are usually at a disadvantage when tapping into the normal services provided by both the government and private sector, such as those provided by financial institutions, government agencies, consultants, marketing channels, marketing promotions, etc.

Because of these disadvantages, MSEs - particularly those in developing countries where the service infrastructure and business environment have not yet been well developed - typically face operational problems which make it difficult to start-up and to expand or develop to reach their full potential. These problems can be generalized as follows:

· lack of access to financing;
· lack of access to the market;
· lack of skilled workers, or poor access to skill development for workers;
· lack of access to better technology and equipment;
· the lack of access to information vital to business management; and
· lack of business management skills.

In Thailand, the situation for MSEs is quite similar to that described above. However, when addressing these issues, the RTG usually considers these very small enterprises to be “small and medium-sized enterprises (SMEs)”, while recognizing that microenterprises are included in the lower end of the spectrum. Although quite a few studies and surveys have focused on the nature and problems of SMEs (with microenterprises implicitly included), they are mostly directed toward small and medium industry (SMI) - which means those SMEs operating in the manufacturing sector. In addition, it is not yet known whether a comprehensive study has ever focused exclusively on service or trade enterprises operated by MSEs. The latest comprehensive survey is one commissioned by the Department of Industrial Promotion (DIP) from a consulting company in 1997, which again focused on SMIs. Based on the findings of this survey, the problems facing Thai SMIs have been adequately summarized by the Director-General of the Department of Industrial Promotion (DIP)2 as:

· lack of technical and managerial capabilities;
· lack of access to greater market;
· lack of access to finance;
· lack of skilled workers and skills development; and
· lack of access to information vital to business.

2 Manu Leopairote, DG DIP, Role of SMEs in Reviving Economic Crisis.

As previous studies in Thailand have not clearly or specifically addressed microenterprises, nor did they clearly or specifically cover the service and trade sectors of MSEs, it was deemed necessary for this project to carry out a small survey of some of the urban-based MSEs in Thailand. The purpose of the survey is first and foremost a reality check against which all of the other working papers in this series can be reviewed. The survey was also planned to give a preliminary assessment of the problems and needs of Thai urban-based MSEs. The details of the survey methodology and results are explained in the following sections.

(introduction...)

The survey of selected Thai urban-based MSEs is part of the SPPD project undertaken by the ILO in Thailand as described above. Its objective is to build a framework, based upon which the validity and relevance can be determined for applying accumulated experiences and “best practice” methods in providing Business Development Services (BDS) from the international arena to the Thai MSEs. The survey is thus designed to check or find out information on particular issues, rather than being completely and comprehensively descriptive in nature. It is described as follows.

2.1 Survey methodology

The survey was made by conducting face-to-face interviews with MSE entrepreneurs using a pre-designed questionnaire. The questionnaire (as shown in Appendix A) was designed as a series of questions divided into 9 groups. They are concerned about:

· general information;
· enterprise start-up;
· technology aspects;
· marketing aspects;
· financial aspects;
· legal aspects;
· services received and desired;
· business associations; and
· business prospects and entrepreneurship.

The questionnaire is intended to be predominantly qualitative in nature. Although some of the answers can be tabulated in numerical form, the resulting statistics are not used as the main factor in reaching the conclusions of the survey since it is not designed to be a “scientific” survey. As such, the survey summary is drawn from the qualitative information and impressions gathered from the interviews, as well as the analysis of the tabulated data.

2.2 The survey sample

The microenterprise in this survey is defined as having less than 5 persons, and small enterprise as 5 or more and less than 50 persons working in a normal situation. The enterprises included are in the manufacturing, trade and services sectors. The survey was conducted by interviewing a total of 104 enterprises. It includes 69 microenterprises and 35 small enterprises in Bangkok and Phetchaburi, of which 55 micro and 22 small enterprises are from Bangkok, and 14 micro and 13 small enterprises are from Phetchaburi, as shown in more detail in Table 1. The names of the enterprises surveyed are as shown in the list in Appendix II.

In Bangkok it was found that Department of Public Welfare (DPW) of the Ministry of Labour and Social Welfare (MOLSW), under the Thai Help Thai programme, has supported unemployed people to set up microenterprises. The support was mainly financial to enable the target group to start up a business to earn income. In particular, the Thai Help Thai programme gives a grant of 2,000 Baht per person to be working as a group in a micro business. As of April 1999, 57 microenterprises have been set up under the programme in Bangkok. Of these 17 enterprises in 14 districts of Bangkok were randomly chosen to be interviewed in the survey.

Table 1. The MSE survey sample


Microenterprises

Small Enterprises

Total Enterprises


Supported Enterprises

Independent Enterprises




DPW

UCDO

DIP

Subtotal




Bangkok Area:

Manufacturing

17

6

-

23

4

18

45

Service

-

-

-

-

17

1

18

Trade

-

-

-

-

11

3

14

Subtotal

17

6

-

23

32

22

77

Phetchaburi Province:

Manufacturing

1

-

6

7

2

11

20

Service

-

-

-

-

2

2

4

Trade

-

-

-

-

3

-

3

Subtotal

1

-

6

7

7

13

27

Total Enterprises

18

6

6

30

39

35

104

In addition it was also found that the Urban Community Development Organization (UCDO), a foundation under the National Housing Authority, in cooperation with the Bangkok Metropolitan Administration (BMA), has given financial and other support to people in Bangkok to start up microenterprises in their own communities. At the time of the survey, several microenterprises (around 80 groups) have been set up with this form of support. Many of these have just started, while a few have been inactive. From those that were active, 6 enterprises in 4 districts were also randomly chosen for interview as part of this survey. These enterprises, together with those supported by DPW, are referred to in the analysis as “supported microenterprises” in this survey. Incidentally, all of the enterprises in this group are in the manufacturing sector.

Apart from those supported enterprises, Bangkok has numerous independent individually-owned microenterprises. To narrow down the work of the survey, the districts of Yannawa, Sathorn, and Bangkholeam (formerly Yannawa and Klong Toey districts) were chosen as the main areas. Interviews were then conducted with microenterprises randomly found on the streets in these districts. The survey carried out 31 interviews from this group, and 1 interview with a trading microenterprise in Bang-Na district. Of these, 4 enterprises are in manufacturing, 11 in services, and 17 in trading businesses. These enterprises are referred to as “independent microenterprises” in the survey.

As for the small enterprises, since the manufacturing sector is seen as a higher potential creator of jobs, the Phasicharoen district outside of the inner Bangkok area was chosen for the survey, as it has a proliferation of many different types of enterprises. In this district, using the same method applied to the independent microenterprises, small enterprises were selected randomly for interview from the streets of the district. A total of 22 small enterprises in this group were interviewed. They include 18 enterprises in manufacturing, 1 in services and 3 in trading.

In Phetchaburi it was found that the work of the Department of Public Welfare (DPW) under the Thai Help Thai programme had just been started in earnest. One microenterprise which was interviewed had been successfully set up by the programme, while several others were in the process of being formed. At the same time, no enterprise under the support of UCDO has been found. However, there are 7 enterprises receiving financial support from the Provincial Industrial Office under the Department of Industrial Promotion’s (DIP) revolving fund scheme. All of these 7 microenterprises were interviewed and reported on, together with one in the DPW’s programme, as “supported microenterprises”.

Phetchaburi is a small province 120 kilometres south-west of Bangkok. It has a population of 453,391 people, and 2,528 registered enterprises, of which 669 are manufacturing enterprises. Thus the interviews with “independent microenterprises” in Phetchaburi were carried out with randomly chosen enterprises found on the streets of the city of Phetchaburi. A total of 7 interviews were drawn from this group, involving 2 manufacturing enterprises, 2 in services, and 3 trading businesses. Apart from that, 13 interviews were carried out with small enterprises in Phetchaburi. This was done in collaboration with the Phetchaburi Provincial Industrial Office (PIO) by choosing randomly from the list of 66 enterprises provided by the PIO. Of the 13 enterprises interviewed, 11 are in manufacturing and 2 are in services.

2.3 Results of the Bangkok survey

As described above, the Bangkok survey includes 23 supported microenterprises, 32 independent enterprises, and 22 small enterprises. The results of the survey, as formatted according to the design of the questionnaire, are given below, and the corresponding tables can be found in the annex to this report.

2.3.1 General information

The general information on the enterprises interviewed is shown in Tables 2, 3, 4, 5 and 6 in the annex to this Working Paper. Table 2 outlines entrepreneurs’ gender, age, and educational background. The survey shows that most of the supported microenterprises, assisted through both DPW and UCDO, are owned and operated by women. Their age ranges from 25 to 60, with a slight majority in the 30-40 age range. Their education is mainly at elementary level, with a few having high school education. One entrepreneur in this group has a university degree.

In comparing the supported microenterprises to independent microenterprises, the profile shifts slightly. Although females still dominate the group, there is a higher portion of male entrepreneurs in the independent microenterprises group, while the age profile is similarly concentrated around the 30-40 and 40-50 ranges. However, the educational profile shows a much higher number with a higher level of education in independent microenterprises than supported microenterprises. From the independent microenterprises, the educational level is spread quite evenly from elementary to high school to university levels.

In the small enterprises category, the age and education profiles are quite similar to those of the independent microenterprises. However the gender profile changes significantly. Unlike in the supported microenterprises and independent microenterprises, male entrepreneurs in this group clearly outnumber the females as can be seen in Table 2.

Table 3 shows the type of business carried out by the enterprises interviewed. Incidentally, all of the supported microenterprises are in manufacturing and concentrated in food and garment products, while the independent microenterprises and small enterprises are more diverse both in terms of sector and product type.

The number of workers employed in the enterprises interviewed is shown in Table 4. By the definition used in the survey, microenterprises (MEs) would have 5-10 or even less workers, while the small enterprises have between 10-50 workers. Most of the enterprises fit this definition, with only 3 exceptional cases. They are:

i) Three of the supported microenterprises have more than 20 workers. These are community enterprises with around 30 and 50 members. Although their businesses are conducted on a group basis, the manufacturing of products is done by the members individually, and the proceeds are returned to the members according to their output. Moreover, their operations are “micro” in nature when compared with the small enterprises. Therefore they are treated as microenterprises.

ii) One of the independent microenterprises (in the service sector) has 11 workers, which is at the threshold of the definition. It is a silk-screen printing shop which is enjoying good business and on the brink of expanding to become a small enterprise. However, at present its operation is still seen as “micro” in nature.

iii) There are 2 small enterprises with 4 workers, and 11 small enterprises with 10 or less workers. These enterprises reported that they normally employed more than 10 workers, but in recent times they had been operating with fewer workers. They had laid off some of their regular workers because the economic crisis had affected business. Even so, because of the size of the establishments and the way business was conducted, they are treated as small enterprises in this survey.

Table 5 shows the value of assets of the enterprises interviewed, as well as the ownership of the business premises. As expected, the profile of the value of assets of supported microenterprises is rather lower than for independent microenterprises, and that of small enterprises is even higher. It is also noted that the profiles of asset value of UCDO-supported microenterprises is slightly higher that those of their DPW - supported equivalents, and indeed it is quite close to the profile of the independent microenterprises. Table 5 also shows that while most of the microenterprises are operating from rented premises, most small enterprises own their business premises. This may explain the higher profile of asset value in the small enterprises, and may suggest that they are even more mature enterprises.

In the case of supported microenterprises, besides working at home, their business transactions take place either in a community hall, on community ground, or in temples which they neither rent nor own. It can be said that their business premises are not yet really established. Thus these are not reported in the Table 5.

Finally, commercial registration of enterprises is shown in Table 6. It was found that most of the supported microenterprises do not have commercial registration, while about half of the independent microenterprises and the majority of small enterprises are registered. The main reason why enterprises register is to acquire a legal identity. One UCDO-supported enterprise (the brassware manufacturer) was an exception - it was told to register for pollution control purposes, and an independent microenterprise (a barber shop) was a controlled occupation and had to be registered. Of those who registered, most reported that the procedure was simple and easy, while a few reported the procedure to be moderately difficult, or complicated (Table 6).

2.3.2 Enterprise start-up

All of the enterprises interviewed started their businesses with their own business ideas. The reasons these entrepreneurs gave for starting up their businesses can be summarized as:

i) To have a business of his/her own: Usually, these entrepreneurs had previously been working as an employee in an enterprise. They had learned and developed skills from their earlier employment. Although they may not have aimed for self-employment when they started their career, when they spotted the opportunity they were ready - both financially and adequately skilled - and they resigned and set up a business of their own. The businesses that they set up are usually the same or related to that of their former employer.

ii) To create a career for themselves. Entrepreneurs of this type seek no other career than self-employment. In several cases this way of thinking has been influenced by a tradition of self-employment among their family or society. Thus, right after completing their formal education - although they could have sought employment elsewhere - they sought an opportunity to set up a business of their own. This category of entrepreneur usually has little or no training prior to the start-up, and learned about the business on the job.

iii) To earn their living. These entrepreneurs started up their businesses because they had no other employment choices. They may have been laid-off or have been forced to resign from their former employment, or are not adequately trained (such was the case with several housewives) to gain employment elsewhere. Thus, in order to earn their living they have no alternative to self-employment.

As would be expected, the survey found that most of the entrepreneurs in the third category (above) are from the supported microenterprises. In the independent microenterprises and small enterprises, the responses were a mixture of all three, with the first category having the highest proportion, while the second and third types had smaller shares respectively.

As shown in Table 7, in starting up a business most microenterprises made use of their own money - except for the supported microenterprises which started up with the assistance of loans from the government (DPW, UCDO), or from cooperatives. Most microenterprises reported that they have had no access to commercial bank loans due to their lack of assets which can be used as collateral. Only one UCDO-supported enterprise and one independent microenterprise started up their business with loans from banks. It should be noted that the survey found that most supported microenterprises, especially those assisted by DPW, would not have been able to begin in business if the government support had not been made available to them.

On the other hand, Table 7 shows that most small enterprises started up with loans from banks. Less than one-third started their business relying solely on their own capital. Care should be taken in interpreting this information as this only means that capitalization of these enterprises involved loans from banks when they started or became small enterprises. In fact most of these enterprises did not start up their business as small enterprises. They usually started as microenterprises, and expanded to become small enterprises. However, at the microenterprise stage, they, too, had no access to bank loans. The start-up capital (as reported in Table 7) is the capitalization when they reached the “small enterprise” classification, by which time they would have accumulated considerable assets to be used as collateral.

Table 7 also shows the number of years that the interviewed enterprises have been in business. It can be seen that since the government’s special support programmes have just been started, most supported microenterprises are less than 1 or 2 years old. And while the age of independent enterprises is quite evenly distributed, most small enterprises have been established for between 5 to 10 years. This supports the observation above that small enterprises are generally more mature firms than the microenterprises.

Table 8 demonstrates the difficulties experienced in starting-up, as reported by the entrepreneurs. It suggests that funding is the greatest difficulty for both micro and small enterprises. Next in order of priority, microenterprises seem to experience more difficulties in finding premises for their business than the small enterprises. This seems to conform to the observation above that most microenterprises have to operate from rented premises, while small enterprises own their own business premises. Unlike the microenterprises in which the operations are mainly done by the entrepreneurs themselves, the small enterprises had more difficulties in finding skilled workers for the start-up of their business as seen in Table 8.

2.3.3 Operational aspects

Table 9 shows the responses of Bangkok-based MSEs when questioned about the operational aspects of their business. As may be expected, since most enterprises are not engaged in businesses that require a high level of operational technology, they seem satisfied with their present technology. Most claim that their quality is satisfactory to their customers. Of the enterprises that expressed areas of dissatisfaction, the main concern is with their equipment which is old and inadequate. The next problems are inadequate premises, lack of information about technology, and poor raw materials, respectively. The problems of premises and raw materials mainly involve the microenterprises, while the small enterprises are more concerned with the lack of information about technology.

On the issue of workers’ skills, most of the microenterprises expressed their satisfaction on this point, while more than half of the small enterprises felt that their workers’ skills are inadequate, as shown in Table 9. However, many micro-entrepreneurs wished to further develop their workers’ skills. Thus, when asked about the possible improvements in their operations, skills development comes first for both micro and small enterprises. Next are improvements to equipment, premises, raw materials, technology, and product design respectively. In addition, the survey has noticed that when technology was discussed, most entrepreneurs were concerned only with that technology affecting their principal operations. They are either not aware of or not interested in technology as it relates to their supporting activities, such as materials handling, information technology, etc. which could also have helped them to improve their efficiency.

2.3.4 Marketing aspects

The monthly sales income of the enterprises interviewed is shown in Table 10. As many enterprises feel that their sales figures are sensitive information, they refrained from giving detailed answers. This, together with the fact that proper accounting is not widely practised in many MSEs, may contribute to making the replies as reported in the table not very reliable. Most figures - especially those of the small enterprises - seem to have an over-emphasis towards a lower sales value. However, as many enterprises reported that their businesses have been quite seriously affected by the financial and economic crisis, they may be quite accurate.

Table 11 shows the market for the enterprises interviewed, as well as their assessment of the adequacy of their income. It was found that most Bangkok-based MSEs market their products and services in nearby areas and/or within Bangkok. Only a few manage to achieve some sales outside Bangkok, and only three of the small enterprises export their products. Of these, it was reported that the export market was developed and handled by their customers, and not administered or managed by the small enterprises themselves. On the adequacy of sales income, quite a large proportion of the enterprises interviewed (almost half) said that the level of their sales income was not adequate. This inadequacy is more evident with the supported microenterprises, than with the independent micro and small enterprises (Table 11).

It was also noted from the survey that most enterprises surveyed are passive in relation to their marketing activities. Most enterprises do not have any market development or promotional activities. Their marketing activities generally rely on their customers approaching them with orders.

2.3.5 Financial aspects

Table 12 shows the sources of funds for the operation of the enterprises interviewed. It can be seen that supported microenterprises have no sources of external financing, other than the original funds received at their start-up. Similarly, the majority of the independent microenterprises do not use external financing for their operations either. However, a few managed to obtain financing from suppliers, friends and relatives, and cooperatives. Only 4 out of 55 microenterprises used bank loans. On the other hand, the majority of the small enterprises have been able to use bank loans to finance their operations. None use any other form of external financing. This may support earlier observations that small enterprises seem to be more “formal” and mature than microenterprises, and consequently have less difficulty obtaining support from the banks.

It was noticed in the survey that most enterprises interviewed do not use any proper accounting systems, except for a few enterprises in which a spouse or relative is well-trained in accounting. Many of the small enterprises seem to hire an outside accountant to make bookkeeping entries for them. This book-keeping is used only for registration and tax purposes, and most of the time is not very reliable. These records are seldom used in the financial or operational management of the enterprises. Other enterprises - especially microenterprises - may only have book-keeping records for their cash and at best their inventory transactions, or indeed maybe not at all. As a result, most of these enterprises pay tax on an estimated basis, rather than on an actual calculation of net income. From time to time, interviewees said, Revenue Department officials visit and observe the business of the enterprises, make estimates on the volume of business and net income, and dictate to the entrepreneurs the amount of tax that they have to comply with. The entrepreneurs interviewed generally have no idea whether their tax bill would have been higher or lower if they had kept proper accounting records and prepared objective net income statements.

2.3.6 Legal aspects

The results of the legal aspects of the Bangkok survey are shown in Table 13. Most of the entrepreneurs do not have a great deal of knowledge about the civil laws governing the legal aspects of their business. Among those enterprises that are registered, most did so only to avoid complications involving government officials, rather than independently wanting to receive benefits from being “legal”. Under these conditions relating to the legal requirements, five out of the 32 independent microenterprises interviewed felt that tax was too high. One DPW-supported microenterprise had problems with food and drugs regulations when it wished to get approval to distribute its food products in the wider market. One computer system analysis consulting microenterprise said that patent laws made its business more difficult because it had to pay a high price for software. Other than these, the enterprises interviewed stated that no law or regulation was seen as a constraint to their business. Likewise, most enterprises do not see any law or regulation that is helpful to their business, except for a few who feel that the value added tax (VAT) reduction announced recently seems to be helpful to their business (Table 13).

2.3.7 Business development services (BDS)

Table 14 shows the range of business development services (BDS)3 received by the enterprises interviewed. Of the supported microenterprises, those under the UCDO reported receiving marketing advice and assistance from the “support” organization, while those under the DPW also received marketing assistance by attending fairs organized by government agencies. Few reported receiving any information, while one from each group reported receiving training. However, almost half of each group said no assistance had been received in business development services. Among independent microenterprises and small enterprises, most reported that no services had been received at all. Two independent microenterprises reported receiving training from suppliers of equipment, and one small enterprise received training from the Federation of Thai Industry (FTI) - of which it is not even a member. One independent microenterprise (in silk screen printing) is a member of the Silk Screen Association, and it receives information from the association’s journal regularly. Other than that, a few enterprises received information and marketing assistance from customers, suppliers and friends.

3 This term is now widely used to cover all forms of support for enterprise development other than financial support. It includes training, marketing assistance, information, advice, etc.

Even if BDS are to be made available or more accessible, the survey found that more than half of the enterprises surveyed do not feel that that these services will be helpful (as shown in Table 14). The impression gathered from the interviews was that most enterprises are not using the BDS because they do not believe that these services will be effective for their particular enterprises, rather than because they do not need the services.4 Of those who do wish to use these services, it was found that marketing assistance is needed most, especially for the microenterprises. Other needs are for skills development, product development, supplier information, market information, technology information and premises, respectively. Some enterprises interviewed - especially those supported by the DPW, as well as a few independent microenterprises and small enterprises - expressed their desire for financial assistance (this is not categorized within “BDS”- see footnotes 3 and 4), as also shown in Table 14.

4 Editor’s Note: As has been seen in related Working Papers, the provision of BDS in Thailand is not well developed. Therefore, the lack of awareness of both the services and related benefits is to be expected.

2.3.8 Business associations

Apart from the supported microenterprises which have to be members of a cooperative or a women’s group to qualify for the support (Table 15), the survey found that most enterprises are presently not members of any association or organization. Incidentally, only one microenterprise (in silk screen printing) is a member of an association (the Silk Screening Association), and one small enterprise (the environment consultant) is a member of an association (the Association of Environment Consultants).

Likewise, most enterprises interviewed are indifferent to, or do not feel that associations would be useful to their businesses, while only 25 out of 77 enterprises feel that an association would be useful. Especially, there were no small enterprises that felt that an association would be useful at all. This attitude towards associations seems to be based upon their experiences and observations concerning the existing associations, which they see as either ineffective or irrelevant. All of the entrepreneurs agreed that an “ideal” association would be useful, if it were properly established and run. However, they did express doubts about such associations being possible in Thailand. Of the enterprises which feel that an association is useful, the supported microenterprises reported preferring a cooperative structure, while the independent microenterprises preferred associations of businesses within the same sector (Table 15).

2.3.9 Business prospects and entrepreneurship

Table 16 reports on the entrepreneurship commitment and business prospects of the enterprises interviewed. The entrepreneurial commitment is measured by asking whether the entrepreneur would abandon the business if a steady job with comparable income were available. It was found that almost half the DPW-supported microenterprises would abandon their businesses, while a small proportion of independent microenterprises and an even smaller proportion of the small enterprises would do so. Likewise, the profile is quite similar when asked whether they would advise others to become self-employed. Negative attitudes towards business were found to be based mainly on the poor performance of their businesses, and the uncertainties of sales due to the financial and economic crisis.

The business potential of the enterprises interviewed (Table 16) is based on an assessment made by the surveyor. “Questionable”, means that the business is not doing well and might fail in the near future if no radical change takes place. “Struggling” means those enterprises which are still viable but not yet stable, and this makes their future quite uncertain at this time. “Sustainable” means those businesses that are stable and quite secure. However, their potential to grow further than at present seems to be limited. Finally, “good potential” means those enterprises reporting good business performance and showing good potential to grow. From the survey, a high proportion of the enterprises are in the “sustainable” and “struggling” categories, with a smaller proportion in the “good potential” category, and a few of “questionable” status. Table 16 shows that the small enterprises are probably in a better state than the microenterprises. It should again be noted that such profiles are obviously affected by the financial and economic crisis since many of these enterprises have reported adverse effects.

2.4 Results of the Phetchaburi survey

The Phetchaburi survey includes 7 supported microenterprises, 7 independent enterprises, and 13 small enterprises. The results of the survey formatted according to the design of the questionnaire are shown below.

2.4.1 General information

The general information on the enterprises interviewed is shown in Tables 17, 18, 19, 20 and 21 in the annex to this Working Paper. Table 17 shows the information about the entrepreneurs regarding gender, age, and educational background. Similar to Bangkok, the survey shows that all of the supported microenterprises - both under DPW and DIP - are owned and operated by women. Their age range is between 30 to 60 with a majority in the 30-50 range. Their education is mainly at elementary and vocational level. When comparing the supported microenterprises to independent microenterprises, the profile shifts considerably. In the group of independent microenterprises there are almost as many female as male entrepreneurs. Their age profile is quite similar, concentrating at around the 30 to 40 and 40 to 50 ranges. However, the education profile shows a greater proportion at the higher level of education in independent microenterprises than supported microenterprises. It spreads quite evenly from elementary to high school to university levels, with the same concentration at high school and vocational levels.

In the small enterprises, the age and educational profiles are quite similar to those of independent microenterprises. However, the gender profile changes slightly. In this group, male entrepreneurs clearly outnumber the female, as can be seen in Table 17.

Table 18 shows the type of business of the enterprises interviewed. In the same manner as Bangkok, all of the supported microenterprises are in manufacturing and concentrated in food and garment products, while the independent microenterprises and small enterprises are more diverse both in terms of sector and product type.

The number of workers in enterprises interviewed is shown in Table 19. The definitions used in the survey, classify enterprises with less than 10 workers as microenterprises, while the small enterprises have between 10 and 50 workers. Most of the enterprises fit this definition, with exceptions in two areas. They are:

i) One of the supported microenterprises has more than 20 workers. This is a women’s group formed within a cooperative, with 28 members making woven hats and bags. Although the business - especially the marketing and procurement - is conducted as a group, the manufacturing of products is done by the members individually and proceeds are returned to the members according to their output. Moreover, their operations are “micro” in nature, when compared with small enterprises. Therefore they are treated as microenterprises.

ii) There are 4 small enterprises with 10 and less workers. These enterprises reported that they normally employed more than 10 workers, but in recent times they had been operating with fewer workers. They had laid off some of their regular workers because the economic crisis had affected business. Even so, because of the size of the establishments and the way business was conducted, they are treated as small enterprises in this survey.

Table 20 shows the value of assets of the enterprises interviewed, as well as the ownership of business premises. Similar to that reported in Bangkok, the profile of value of assets of supported microenterprises is rather lower than independent microenterprises, and that of small enterprises is even higher. It also shows that while most of the microenterprises are operating from rented premises, most small enterprises own their business premises. This may explain the higher profile of asset value in the small enterprises, and suggests that they are more mature enterprises. As for supported microenterprises, other than working from home, their business transactions take place either in a community hall, on a community ground, or at temples which they neither rent nor own. It can be said that their business premises are not yet established. Thus it is not reported in the Table 20.

The commercial registration of enterprises is shown in Table 21. It was found that most supported microenterprises do not have commercial registration, while about half of the independent micro and all of the small enterprises have registered. Most enterprises said they registered to become a legal entity. Of those who registered, most reported that the procedure was simple and easy, while a few reported moderate difficulties, and only one saw it as complicated.

2.4.2 Enterprise start-up

Similar to the Bangkok survey, all of the enterprises interviewed started their business with their own business idea. The reasons they gave for starting up their businesses were as follows:

· have a business of his/her own;
· create a career; and
· earn a living.

As might be expected, the survey found that most of the entrepreneurs who quoted the third reason were in the supported microenterprises category. However, rather than having been laid-off from jobs as in Bangkok, the supported micro-entrepreneurs in Phetchaburi are those who have no job or no other better means of earning a living. As the DPW has not yet contributed as much to these enterprises as is the case in Bangkok, the Provincial Industrial Office (PIO) has been supporting these enterprises under a DIP programme of which is targeted specifically at the provinces.

Among the independent micro enterprises and small enterprises, the reasons for start-up are spread between the three statements, with a slight emphasis on the second. Many independent micro-entrepreneurs interviewed in Phetchaburi seem to have been determined to become self-employed right from the start of their career. After finishing formal education, they went to work with other enterprises for a few years with the clear aim of learning, gaining experience, and in some cases, earning money in order to be able to establish their own enterprises. One entrepreneur reported that in order to acquire the necessary skills, he paid money to become an apprentice in an enterprise of his choice.

As shown in Table 22, when starting up in business, most microenterprises used their own money, except for the supported microenterprises which began with government loans (DPW, DIP). However, unlike the Bangkok survey, almost half of the independent microenterprises interviewed reported that they had access to commercial bank loans. The proportion of small enterprises using bank loans for start-up is about the same as for the independent microenterprises.

The Phetchaburi survey suggests that finance from commercial banks in the provinces is probably more accessible than in Bangkok. This may suggest that while microenterprises and even some small enterprises in Bangkok seems to be rather “informal” and insignificant, in Phetchaburi - and presumably similarly elsewhere in other provinces of Thailand - they are considered quite significant within the local society. The results seen from the survey seem to indicate that micro as well as small enterprises in the provinces are considered more prestigious and more creditworthy than their equivalents in Bangkok. On the other hand, since many entrepreneurs interviewed are natives of Phetchaburi, they may have inherited assets or have access to family assets which can be used as collateral for loans. This could explain their comparatively better access to bank loans. Thus, while business opportunities may be better in Bangkok due to the greater market size, the means for starting up a business in Phetchaburi (and presumably in other provinces) are more accessible as indicated by the survey.

Table 22 also shows the number of years that the enterprises interviewed have been in business. As the support programme offered by the DIP has been available for several years for needy entrepreneurs here, it was found that the supported microenterprises are older than those in Bangkok. And while the number of years in business of the independent microenterprises is quite well distributed, with a concentration around 3-5 years, most small enterprises have been established for more than 5 or 10 years. This supports the prior observation that small enterprises are generally more mature firms than the microenterprises.

Table 23 shows the difficulties experienced in starting up, as reported by the entrepreneurs. It suggests that funding is still the greatest difficulty for both micro and small enterprises. In addition, difficulties in finding skilled workers, especially for small enterprises, are reported to be as significant as the funding issue, and more serious than in the Bangkok survey. This suggests that skilled workers and presumably skills development are more scarce in the provinces than in Bangkok. At the same time, difficulties in finding premises in Phetchaburi are much less severe than in Bangkok as seen from the survey (in Table 23).

2.4.3 Operational aspects

Table 24 shows the responses of the Phetchaburi micro and small enterprises on the operational aspects of their business. Similar to the Bangkok survey, since most enterprises are not engaged in businesses that require a high degree of operational technology, most enterprises seem satisfied with their present technology. The majority also claim that the quality of their outputs satisfies their customers.

Among the enterprises that expressed dissatisfaction with operational aspects, old and inadequate equipment was the main concern. Only a few are concerned about the lack of information about technology, or poor raw materials, which mostly affect small manufacturing enterprises. Hence, when asked about the possible improvements in their operations, only equipment improvements are cited (Table 24).

On the issue of workers’ skills, most of the enterprises interviewed expressed their satisfaction, as shown in Table 24. Relating this to the reasons why skilled workers for small manufacturing enterprises are difficult to find, it was explained in the interviews that most newly recruited workers were unskilled. They had to be trained on the job. Thus as the enterprises mature, workers’ skills are developed to the satisfaction of the entrepreneurs.

In common with the Bangkok survey, it was noted that when technology was discussed, most entrepreneurs were concerned only with that of their principal operations. They are either not aware of, or not interested in technology for their supporting activities, such as materials handling, information technology, etc., which could have helped improve their efficiency.

2.4.4 Marketing aspects

The monthly sales income of enterprises interviewed is shown in Table 25. As occurred in Bangkok, many Phetchaburi enterprises feel that their sales figures are sensitive, and refrained from giving answers. This, together with the fact that proper accounting systems are not commonly found in many micro and small enterprises (MSEs), may make the replies as reported in the table not very reliable. Most figures, especially those of the small enterprises, seem to be a little skewed towards the lower sales values. However, many enterprises reported that their business have been quite seriously affected by the financial and economic crisis, and therefore they may not be too far from being accurate.

Table 26 shows the market for the enterprises interviewed, and their assessment of the adequacy of their income. It is found that most Phetchaburi MSEs market their products and services within Phetchaburi, in nearby provinces and/or in Bangkok. In addition, four enterprises interviewed reported that their products are exported. They include one DIP-supported microenterprise making woven hats and bags (and which has also been assisted under a Royal initiated project); one palmwood products manufacturing microenterprise which has been approached by customers from abroad; one noodle factory (small) which is more than 20 years old, and a plastic-chip shipping-tray factory which moved from Bangkok to invest in Phetchaburi to take advantage of the Board of Investment’s (BOI) Zone 3 promotion. Of these, it was reported that the export market was developed and handled by their customers and not managed by the enterprises themselves.

On the adequacy of sales income, although most enterprises said that they had been quite severely affected by the financial and economic crisis, their sales income was still reported to be adequate. Only one of the supported microenterprises, two independent microenterprises (one trading and one services), and one manufacturing small enterprise reported that their sales income is inadequate. In all of these cases, the inadequacy is seen as being caused directly by the financial and economic crisis, which has reduced their sales income by more than 50 per cent.

In the same manner as the Bangkok enterprises, it was also noted from the Phetchaburi survey that marketing activities in most of the enterprises surveyed are passive in nature. Most enterprises do not have any market development or promotional activities. Their marketing generally relies on customers approaching the enterprises to create sales.

2.4.5 Financial aspects

Table 27 shows the source of funds for the continuing operation of the enterprises interviewed. It can be seen that most supported microenterprises still have no external financing other than the original funds received at their start-up, except for two supported microenterprises which are members of cooperatives and have obtained loans from these cooperatives.

However, unlike in Bangkok, more than half of the independent microenterprises in Phetchaburi use bank loans to finance their operations. Moreover, the majority of the small enterprises also use the bank loans, while one manufacturing independent microenterprise borrowed from a cooperative. This supports earlier observations that finance is probably more accessible to enterprises in Phetchaburi - and presumably in the provinces - than in Bangkok.

It was also noticed in the survey that most enterprises interviewed do not use proper accounting procedures, except for a few enterprises in which spouses or relatives are well-trained in accounting. Many small enterprises use outside accountants to make book entries for them. These book-keeping records are used only for registration and tax purposes and most of the time are inaccurate. They are seldom used as information for the financial or operational management of the enterprises. Other enterprises, especially microenterprises, may have at best only cash and inventory records, or none at all. As a result most of these enterprises pay tax on an estimated basis, rather than on the statement of their net income. Interviewees said that from time to time Revenue Department officials would visit and observe the business of the enterprises, make estimates on the volume of business and net income, and calculate the amount of tax that they have to pay. Similar to the Bangkok survey, the entrepreneurs interviewed had no idea whether the tax would have been higher or lower if they had had proper accounting procedures and records.

2.4.6 Legal aspects

The results of questions about legal aspects of business from the Phetchaburi survey are shown in Table 28. As stated earlier, most of the entrepreneurs know very little if anything about the civil law governing the legal aspects of their business. Even when the enterprise is registered, most have done so only registered only to avoid complications from government officials, rather than to receive any benefits from being legal. In these circumstances, four of the enterprises felt that taxes were too high. Of the group of 11 small manufacturing enterprises interviewed, two thought that labour laws were counter-productive; one had problems with the land use laws which had delayed his factory registration for several months; one truck/trailer body assembler has had difficulties with ambiguous transportation regulations, and one door/window panel business has had difficulties with laws controlling the manufacture of wooden products. Other than these, the majority of the enterprises interviewed responded that no law or regulation was a constraint to their business.

Likewise, most enterprises do not identify any law or regulation that is helpful to their business, except for one small enterprise which reported that the value added tax (VAT) reduction announced recently seems to be helpful to business (Table 28).

2.4.7 Business development services (BDS)

Table 28 shows the business development services (BDS) support received by the enterprises interviewed. Supported microenterprises reported receiving training, marketing advice and assistance when they attended fairs organized by government agencies. Still, four out of six DIP-supported enterprises said they had not received any assistance other than financial assistance. Of the independent micro and small enterprises, most reported that no BDS services have been received at all. Two independent microenterprises reported receiving support in the form of training and information from suppliers of equipment. One small enterprise received training from the Federation of Thai Industry (FTI) - the entrepreneur is the president of the provincial chapter - and one received training from Thai Productivity Institute, of which it is a member. In addition, two other small enterprises received training from equipment suppliers. Altogether 18 out of 27 enterprises interviewed have never received any BDS support service or assistance.

If the BDS as well as financial assistance were available or more accessible, the survey found that most of the enterprises did not feel that that these services would be helpful (Table 29). Again, the impression gathered from the interviews is that the reason most enterprises do not use the BDS is that they do not believe that these services will be effective for their particular enterprises, rather than not needing the services themselves. For example, most enterprises - especially manufacturing ones - feel that workers’ skills can be more effectively developed internally on the job, rather than from outside.

Among those who expressed a wish to use the BDS services, marketing assistance was identified as the greatest need, especially for the supported microenterprises. Other needs are for product development and premises respectively. There was no mention skills development needs. No enterprises interviewed expressed a desire for financial assistance (Table 29).

2.4.8 Business associations

Similar to Bangkok, with the exception of a few supported microenterprises which are obliged to be members of cooperatives or women’s groups, the survey found that most enterprises are not presently members of any association or organization. However, a higher number of Phetchaburi enterprises are members of the provincial chamber of commerce and provincial chapter of the Federation of Thai Industry (Table 30).

Again, most enterprises interviewed are indifferent to, or do not feel that an association would be useful to their business, while only 5 out of 27 enterprises feel that an association would be useful. In particular, no supported microenterprises feel that an association is useful at all. This attitude towards associations seems to be based upon their experiences and observations of the existing associations, which they feel to be ineffective or irrelevant. All of the entrepreneurs agreed that an “ideal” association would be useful if it were properly established and run. However, most of them doubted whether such an association is possible in Thailand. Among the enterprises which feel that an association can be useful, a sectoral association of the same businesses was the preferred format (Table 30).

2.4.9 Business prospects and entrepreneurship

Table 31 reports on the entrepreneurship commitment and business prospects of the enterprises interviewed. Similar to the Bangkok survey, the commitment is measured by asking whether the entrepreneur would abandon the business if a steady job with comparable income were available. Only one supported microenterprise and one independent microenterprise reported that they would abandon their business, while no small enterprises would wish to do so. Likewise, the profile is quite similar when asked whether they would advise others to become self-employed. Although showing similar trends towards self-employment, these responses show a significantly stronger and more positive attitude than in Bangkok.

The business potential of the enterprises interviewed (as reported in Table 31) is an assessment made by the surveyor in the same fashion as in the Bangkok survey. The “questionable” response means that the business is not doing well and might fail in the near future if no radical improvement takes place. “Struggling” applies to those enterprises which are still viable but not yet stable, making their future quite uncertain at this time. “Sustainable” means those businesses that are stable and quite secure. However, their potential to grow further than at present seems limited. Finally, “good potential” means those enterprises with good business performance and which show good growth potential. A large proportion of the surveyed enterprises are in the “sustainable” and “struggling” categories, with a good proportion in “good potential”, and a few of “questionable” status. Table 31 shows no significant differences among each group of enterprises, and also no significant difference when compared with the Bangkok survey. It should again be noted that such profiles are affected by the financial and economic crisis in Thailand, since many of these enterprises have reported adverse effects.

(introduction...)

From the results of the small field survey, combined with the past experience and accumulated knowledge of the consultant, the characteristics, problems and needs of Thai micro and small enterprises (MSEs) can be summarized as shown below.

3.1 Characteristics of Thai MSEs

3.1.1 Supported microenterprises

The entrepreneurs: The entrepreneurs in this group are mainly individuals or groups of laid-off workers, or some of the unemployed local population, who have their own ideas about income generation. They have approached the various agencies for financial support to establish their enterprises. Most already have the skills needed to operate their business, acquired either through previous employment or training. However, most of them do not have experience in marketing or financial management. In general they are aged between 30 and 50 years, with education at the elementary, high school or vocational school level. Although no discrimination is evident in the support policies and programmes, there are significantly more women than men in this group of supported microenterprises. This gender aspect will be dealt with in more detail later.

The enterprises: Most of supported microenterprises are found in the manufacturing sector. All of them are new enterprises, only one or two years old. They are mostly very small, even smaller than typical independent microenterprises.

Start-up: As stated above, this category of entrepreneurs already have their own business ideas and operational capabilities. However, start-up would not be possible without the financial support received from the various government agencies. No other funding seems to be accessible. The capital needed for the start-up may vary between 20,000 and 200,000 Baht. Apart from financial difficulties, finding proper premises for business seems to be the most significant problem. Most end up using community facilities or their residences as business premises, which in many cases can hinder or limit business activities.

Production or operations: Production operations in supported microenterprises are generally relatively simple, labour-intensive and use traditional technology. Given that most entrepreneurs’ skills lie in the production or operational part of the business, this should be the strongest characteristic of the enterprises. However, enterprises are found to be complacent about their production operations and use of technology. They do not seem to look for better methods, improved effectiveness or enhanced efficiency.

Marketing: Sales are usually made in the area close to the business premises with customers coming to the enterprise to make purchases. Occasionally these enterprises are called on to join trade fairs organized by government agencies to assist their marketing. Significant sales are made at these fairs. Some enterprises even rely on the fairs for a good proportion of their income.

Finance: As financial support from agencies is given as a lump sum when the businesses start up, many enterprises later find that these funds are not adequate to meet their working capital needs. Because few, if any, other external sources of finance are available, business activities have to be limited and as a consequence these enterprises face certain financial disadvantages. Basic book-keeping is used for cash and inventory records only.

Legal environment: Legal aspects seem to be scale-neutral for these supported microenterprises. They appear to be neither a constraint nor helpful to the business. Besides, most entrepreneurs know very little about the commercial law, tax law or regulations related to or governing to their business. At present, the benefits allowed by the regulations, such as tax exemptions, have very little or no effect on these enterprises.

Business development services (BDS): At present no formal BDS are found for supported microenterprises. Some advice or marketing assistance (mainly fairs or flea markets) is provided, normally based on the initiative of individual officials. If possible, the enterprises would want to obtain marketing assistance.

Associations: The enterprises are not members of business associations. They are not represented as members operating in the private sector of the country. They do not understand the important role of representative associations and they do not see the usefulness of such associations.

Entrepreneurship: Entrepreneurship is not a precondition, a criterion or qualification required in order to be able to receive assistance through the programmes provided by the Government. Some entrepreneurs and government officials alike even see these programmes as temporary measures to solve social and economic problems, rather than as support for business creation

3.1.2 Independent microenterprises

The entrepreneurs: The entrepreneurs in this group are individuals who have gained experience from their former employment, are unemployed, or else have never been employed. They have adequate resources and wish to create an enterprise of their own. They are seekers of opportunities and resourceful enough to realize their entrepreneurial ambition. They can be either male or female, and aged around 30 to 40 years. Their educational background may be at elementary, high school, vocational, or university level.

The enterprises: The independent microenterprises are operating as manufacturing, service, or trading firms. Most of them are new enterprises, between one and five years old.

Start-Up: In general, the independent microenterprises are started up with the entrepreneurs’ own financial resources. They may get some assistance from relatives or friends, but seldom from financial institutions. The amount of start-up capital needed may vary between 100,000 and 500,000 Baht. Apart from financial difficulties, finding proper premises - especially for service and trading businesses - seems to be the most significant problem. Most operate from rented premises, rather than owning their own premises.

Production or operations: The production operations in independent microenterprises are generally simple, using traditional technologies. And again, as most entrepreneurs are skilled in the production or operations area, this should be the strongest part of their enterprises. Again, the enterprises are found to be complacent about their operations and technology. They do not seem to look for better methods, effectiveness or efficiency. Only very few enterprises are found to be interested in seeking the most appropriate technology for their business. Marketing: Sales are usually made in the area of the business premises, with customers coming to the enterprise to make purchases.

Finance: Access to funding from financial institutions for independent microenterprises is limited due to the lack of assets for collateral. In many cases, the working capital is financed by suppliers. Book-keeping is restricted to cash and inventory records. The enterprises generally use an external accountant to perform official book-keeping and tax filing functions.

Legal environment: The legal aspects of their businesses are scale-neutral for these enterprises. Laws and regulations appear to be neither a constraint nor helpful to business. In addition, most entrepreneurs know very little if anything about the commercial law, tax law or regulations related to or governing to their business. At present the benefits allowed by the regulations, such as tax exemptions for professional services, etc., have very little or no effect on these enterprises.

Business development services (BDS): At present no formal BDS exists for these independent microenterprises. Some advice or information is received from friends, customers, and suppliers.

Associations: The enterprises are not members of business associations. They are not represented in the private sector of the country. They do not understand the role of associations, and do not see the usefulness of associations.

Entrepreneurship: Entrepreneurship is strong in this group. These business people had to invest their own resources in the business and overcome many obstacles in order to establish an enterprise of their own. However, many entrepreneurs view their enterprises as an occupation or income-generation activity, rather than as a real business. They generally feel complacent after the enterprise has reached a certain level of operation, and will not seek or do not feel the need to seek further opportunities to grow or expand, especially when any degree of risk is involved. Some even turn down opportunities that have been offered to them in order to avoid the accompanying risks.

3.1.3 Small enterprises

The entrepreneurs: The entrepreneurs in this group are individuals who have gained experience from former employment, or have never been employed, or who were unemployed. They have adequate resources and wish to own an enterprise of their own. They are seekers of opportunities and resourceful enough to achieve enterprise ownership. In fact many of them are successful microenterprises which have been continuously expanded to become small enterprises. There are more males than females in this category, and they are aged between 30 and 60 years. Their educational background may be at elementary, high school, vocational, or university level.

The enterprises: The small enterprises are engaged in manufacturing, service, or trading activities. Most of them are relatively ‘old’ enterprises, and have been established for five to 15 years.

Start-up: As stated above, most of the small enterprises began as microenterprises and expanded. By the time they reached the “small” category, they had already accumulated considerable assets. Thus, when they expanded to small enterprise level, they were usually able to access loans from financial institutions. Since many entrepreneurs prefer to accumulate wealth in the form of hard assets rather than as cash or short-term investments, the expansion of these enterprises is most often financed by bank loans using those assets as collateral. The value of assets of small enterprises varies quite widely from 50,000 to 500,000 Baht, to more than 20,000,000 Baht. And, unlike the microenterprises, most operate from their own premises.

Production or operations: The production operations in small enterprises are generally simple with mainly traditional technologies, but they can be more sophisticated and/or involve more hired skilled workers than in microenterprises. Thus, operational efficiency relies more on the workers’ skills than on the entrepreneurs’ own operational skills. The technology used in the operations of these small enterprises is generally selected on the basis of the past experience of the entrepreneurs, or from information provided by suppliers of equipment. Again, the enterprises tend to be complacent about their operations and use of technology, and are quite confident that their customers are satisfied with their product quality. They either do not seem to look for better methods, effectiveness or efficiency, or do not know where to search for the relevant information. Only a few enterprises are found to be interested in seeking the most appropriate technology for their business.

Marketing: The principal market for these small enterprises is their local province. However, they also have to make sales in the wider market represented by other provinces, and a few are involved in exports in order to create adequate income. Still marketing is seen as a passive activity, relying on customers approaching the enterprise to make purchases. As such, they have problems attracting or reaching out to customers or potential customers in areas further away from the nearby area.

Finance: For these small enterprises, access to funding from financial institutions is highly probable. However, most of the time the amount of funding is strictly limited to the value of assets to be mortgaged, and sometimes this is not adequate. As such, the growth or level of operations is sometimes determined (or limited) by the amount of credit given. Book-keeping is still one of the small enterprises’ weaknesses. Proper accounting is seldom practised, and most use an external accountant to carry out official book-keeping and tax filing functions. The entrepreneurs themselves have only a vague grasp of the actual performance of their enterprises, which they judge on the basis of their cash position.

Legal environment: The legal aspects also have a rather neutral impact on these small enterprises. They seem to be neither a constraint nor helpful to the business. However, the level of involvement with laws and regulations is more evident with the small enterprises than with the microenterprises. This is, perhaps, because the small enterprises are more visible, or because they have a greater impact on society. The legal aspects which touch these enterprises are mostly specific regulations governing particular sectoral activities, such as the Food and Drugs Administration (FDA) regulations, forestry regulations governing timber transportation, transportation regulations affecting trucking firms, etc. These aspects have created some problems or difficulties for some enterprises, depending upon the type of their operations. Besides, most entrepreneurs know very little if anything of the commercial law, tax law or regulations related to or governing their businesses. At present, benefits allowed by the regulations, such as BOI privileges, tax exemptions for professional services, etc., have very little or no impact on these enterprises.

Business development services (BDS): At present the BDS support for small enterprises is mostly in the form of training provided by government agencies, trade associations, or other organizations. However, the proportion of small enterprises benefiting from such training is still very small and almost insignificant. Enterprises also received some training, technology transfer, and information from suppliers, as well as receiving some advice or information from friends and customers.

Associations: Most of the enterprises are not members of business associations. A few, especially those in the provinces, are members of chambers of commerce or the Federation of Thai Industry. Still, most of them are not represented in the private sector of the country. They do not understand the role of associations and do not see the usefulness of associations.

Entrepreneurship: Entrepreneurship is strong in this group. They have invested their own resources in their businesses, and overcome many obstacles in order to reach the small enterprise level. However, many entrepreneurs view their enterprises as having attained their goal. They generally feel complacent and do not seek or do not feel the need to seek further opportunities to grow, especially when any degree of risk is involved. Some even turn down opportunities that have been offered to them in order to avoid any accompanying risks.

3.2 Problems and needs of Thai MSEs

From the results of the survey and the characteristics of Thai micro and small enterprises (MSEs) as described above, the problems and needs of the enterprises can be summarized as shown below.

3.2.1 The lack of or limited access to credit financing

This problem was found to affect most of the micro and small enterprises in the survey. Most of the supported and independent microenterprises which did not have substantial assets which could be used for collateral, did not have access to credit financing at all. In the case of most small enterprises, and a few microenterprises, although they have access to credit financing, the amount of funding is very much limited to the value of assets available as collateral. This has limited and sometimes denied these enterprises the opportunity to grow or expand to their real level of potential.

3.2.2 The lack of access to wider markets

As entrepreneurs in MSEs generally have to perform all of the management functions in the enterprise, they usually do not have time and/or resources to reach out or to develop access to the markets beyond their immediate location. Given the absence of business development services (BDS), they generally do not have knowledge or information about other markets. This has limited the ability of the MSEs to market their products to larger groups of customers and expand their business. This problem was found to be more serious in the microenterprises included in the survey, than in small enterprises.

3.2.3 The lack of capability for business planning

Most entrepreneurs have not been trained in business management. Most had started and operated their enterprise without proper business planning. As a result, many enterprises had encountered problems such as inadequate funding, inadequate marketing, inappropriate equipment and technology, inadequate access to skills and skilled workers, etc. These factors have combined to cause the MSEs many difficulties and contributed to their poor return on investment. Had the business been properly planned, many of these problems could have been avoided by these entrepreneurs.

3.2.4 The lack of or limited skills of workers

This problem was found more in the small enterprises surveys, as their operations rely on more and better skilled workers than is the case for the microenterprises. With the very limited skills development services that are available, especially in the provinces, most enterprises hire unskilled workers and then train them on the job. This has adversely affected their productivity and has been an added burden for these enterprises.

3.2.5 The lack of knowledge or information on technology

The equipment and technology employed by the enterprises surveyed are typically based upon the limited exposure and past experiences of the entrepreneurs themselves, as well as on information provided by suppliers, friends and relatives. These enterprises have hardly any agencies that they can contact to acquire relevant information. This has made their choices of equipment and technology, and their chances of upgrading for greater efficiency, very limited. Furthermore, the information received is frequently dependent on accepting a proposal from one particular supplier or another. This problem seems to be more serious in the province (Phetchaburi) than in Bangkok.

3.2.6 The lack of skills in financial management and simple accounting

As reported above, most enterprises do not have any proper internal book-keeping system to provide them with the financial information that is vital for effective management. This is because of the lack of or inadequate skills of the entrepreneurs in financial management and accounting, and because the enterprises cannot afford to hire a full-time accountant. It was found that this problem was as serious in the microenterprises as in the small enterprises. However, judging from the consequences arising from this problem, it is more urgent to address this issue in small enterprises than in microenterprises.

3.2.7 The lack of knowledge or information on other markets and on business opportunities

At present and in the absence of BDS, the MSEs have virtually no sources of information on other markets or opportunities outside their immediate surroundings. Most enterprises lack the knowledge or ideas needed to develop their products or services in order to capture wider markets. This has made market expansion too heavily dependent upon speculation, sometimes too costly for the enterprises, and thus limited the new market opportunities to grow or to expand their businesses.

3.2.8 The lack of knowledge or information on tax laws, and other commercial laws and regulations

As reported above, most micro and small enterprises (MSEs) operate with little or no knowledge of the laws governing their business practices. When conflicts arise or when they are required to do so by law, these enterprises - especially microenterprises - are usually dictated to by government officials who may not fully understand or appreciate their businesses. This has created difficulties and problems which could have been avoided if the enterprises had had a greater knowledge and understanding of the laws and regulations.

3.3 Possible solutions to problems

In order to overcome these problems, proper financial and business development services (BDS) and improved access to these services should be made available to the micro and small enterprises (MSEs). In particular, the services needed by the MSEs can be summarized as shown below:

· Non-collateral credit or non-loan financing scheme, particularly for start-up and for expansion;

· Marketing and networking assistance, especially for markets outside of the enterprises’ immediate surrounding area;

· Training focusing on simple accounting and financial management, including budgeting;

· Advisory and information services on technology management, taxes, laws and regulations, market opportunities, and product development;

· Access to skilled workers, as well as to skills development for existing workers;

· Training in business concepts, business environment and business planning;

· Training in entrepreneurship development and opportunity identification.

As can be expected, the findings from the survey as described above are not totally unique. Although its target groups were quite different, the 1997 survey of Small and Medium Industry commissioned by the Department of Industrial Promotion (DIP) drew quite similar conclusions about the problems facing the enterprises, including5:

· The lack of technical and managerial capabilities;
· The lack of access to wider markets;
· The lack of access to finance;
· The lack of skilled workers and skills development;
· The lack of access to information vital to business.

5 Advanced Research Group Co., Ltd., Report on the Survey of Small and Madium Industry (SMI) submitted to DIP August, 1997; and Manu Leopairote, Role of SMEs in Reviving after the Economic Crisis.

In addition, a study report was conducted in 1996 with funding from ILO, as part of the Rural Income Opportunities Programme (during the Investigation and Planning Phase). This involved microenterprises created in the rural areas within the assistance program of the Ministry of Agriculture and Cooperatives. The study’s findings were quite similar, and showed that the needs for support services to these microenterprises were6:

· group formation and organization;
· business ideas and technology transfer;
· business management training and advisory services;
· marketing assistance;
· access to capital; and
· a coordinating referral mechanism for access to additional expertise.

6 David Lamotte and Maitree Wasuntiwongse, Report of the Investigation and Planning Phase, Rural Income Opportunities Programme THA/93/002, March 1996.

Thus, it can be concluded from the results of this particular ILO/UNDP survey that the characteristics, problems and needs of Thailand’s urban-based micro and small enterprises (MSEs) appear to conform with previous information and knowledge relating to the small enterprise sector. Consequently, it can be confirmed that past experiences and “best practices” which had been suggested earlier for MSE development are still highly relevant and applicable.

(introduction...)

As described above, this survey was designed to be qualitative for use with small samples. Statistical analysis is not intended or included in the interpretation of the survey results. However, as some of the issues from the survey are quantifiable, there appear to be some indicative trends or norms that could be useful in guiding future studies in this field. The observed trends and norms are discussed in this section, without any reference to their statistical significance since only a small sample was used (104 interviews in total).

4.1 Gender issues for entrepreneurs

The survey found that most of supported and independent microenterprises in both the Bangkok and Phetchaburi surveys are owned and managed by females, while males dominate the small enterprises, as shown in Figures 1 and 2.

As a small enterprise is usually considered a more “formal” or more “serious” business, this may suggest that these “formal” opportunities are more accessible to male entrepreneurs than to female entrepreneurs. In the other words, as microenterprises are typically considered “informal” or “not serious” businesses, the male population might have more opportunities and try to avoid them altogether, preferring instead to engage in other non-enterprises activities. Hence it can be seen that the female entrepreneurs are dominant in the microenterprises. [This can also be as a result of women’s unequal access to important skills, information and resources, such as vocational training, information on markets and technologies, and access to sources of business finance, respectively - Editor’s note.]

4.2 The educational level of entrepreneurs

As shown in Figures 3 and 4, which are plotted in the same manner as Figure 1, the survey found that the majority of the entrepreneurs in the supported microenterprises have only an elementary education. This category would also presumably include those workers who would be vulnerable to being laid off during a time of recession due to financial and economic crisis. Therefore, this type of situation would seem to adequately reflect and justify the government’s policies and programmes and the assistance provided to laid-off workers.

Considering the fact that many of the independent microenterprises and small enterprises are businesses which were established independently without much support from government agencies, this may suggest that “real” business opportunities are more accessible to those people with higher levels of education.

4.3 The age of entrepreneurs

As can be seen from Figures 5 and 6 which are plotted in the same manner as Figure 1, the age of most entrepreneurs is in the range of 30 to 40 years in both the Bangkok and Phetchaburi surveys, with a few in the range of 40 to 50. It was found that very few entrepreneurs are below 30 years of age. This may suggests that Thai entrepreneurs typically start their business after reaching 30 years of age.

4.4 The relationship between sales, asset value and number of workers

The sales of the enterprises interviewed are plotted against asset value and number of workers, as shown in Figures 7 and 8 respectively. The sales, which are plotted on the vertical axis, have to be shown on a logarithmic scale because of the wide variations. Figure 7 gives a slight indication that firms with smaller asset value (less than 1 million Baht) would also have a smaller amount of sales, and firms with larger asset value would have a higher sales figure. The figure also shows that the group of small enterprises seems to be concentrated around sales figures and asset values of around 1 million Baht.

The relationship between sales and number of workers, as shown in Figure 8, shows that the smaller enterprises with 10 or less workers tend to have sales figures of about 100,000 Baht or less, while enterprises with more than 10 workers would have higher sales figure.

The relationship between asset value and number of workers seems to be quite diverse. Although there is a concentration around 10 or less workers and asset values of 1 million or less, firms with a more workers do not clearly possess a higher asset value (as can be seen in Figure 9).

Considering the purpose of this survey, and the fact that only a small sample was used, the discussion above is by no means conclusive. As the nature of the businesses is markedly different between manufacturing, services, and trading enterprises, their characteristics as discussed above should be addressed both separately, as well as collectively.

Therefore, it is recommended that a more comprehensive and detailed study be conducted on these issues, in order to establish an accurate information and knowledge base about Thai entrepreneurs and micro and small-scale enterprises.

5.0 Recommendations

Although the main purpose of this working paper is to present the results of the small-sample survey, which serves as a form of “reality check” to confirm or verify former knowledge of MSEs, the information gathered from the survey has been analyzed and several issues have become apparent which have implications for the development of MSEs. These issues have been used to make recommendations for urban-based MSE development as follows:

Recommendation 1: Provision of business development services (BDS)

Since most enterprises reported that no business development services (BDS) have been made available to them, it is recommended that a BDS delivery framework is developed to ensure that MSEs are benefiting effectively from these services. As part of this effort, various agencies or organizations should be identified in terms of the particular services that they can effectively make available to MSEs, both in Bangkok and in the provinces. An action plan should then be developed to ensure that these agencies and organizations are well-equipped and capable of reaching the designated target groups, and delivering the services to the micro and small enterprises in need. Following on from the results of this ILO/UNDP survey, the services to be provided should cover at least the following:

· marketing assistance;

· networking assistance;

· training in simple accounting and financial management, including budgeting;

· advisory and information services on technology management and productivity improvement;

· advisory and information services on taxes, laws and regulations;

· advisory and information services on market opportunities and product development;

· access to the market for skilled workers, as well as skills development services for existing workers;

· training in basic business concepts, the business environment and business planning;

· training in entrepreneurship development; and

· training in opportunity identification.

Recommendation 2: Provision of alternative financing

As reported earlier, most MSEs have problems with the present system of credit financing using collateral. Therefore, it is recommended that a non-collateral credit or a non-loan-financing scheme be developed and made available to the MSEs. The financing scheme should be based upon the merits and viability of the business proposals submitted by the entrepreneurs, and should not impose heavy burdens on the enterprises. It is also recommended that the delivery of the scheme should be through local agencies or organizations which have the potential to effectively reach out to the existing enterprises and potential entrepreneurs. It is also recommended that the provision of the financial services be performed in close cooperation with the BDS provision, in order to ensure that the entrepreneurs are capable of preparing their business proposals, and that the enterprises receiving the financial services will have a high probability of being successful.

Recommendation 3: Further studies

As this survey has been carried out with only a small sample, and is not comprehensive, it is recommended that more a comprehensive and detailed study be conducted to examine specific characteristics of the MSEs, such as their need for and access to BDS support; the relationship between MSEs’ sales, asset value and number of workers; appropriate age of potential entrepreneurs to start a business; the impact of education levels on business prospects; and identifying and addressing a range of gender issues affecting micro and small enterprise development in Thailand. Such a study should provide an accurate basis upon which various policies and support measures regarding MSEs can be established.

Recommendation 4: Representative associations

It is recommended that business associations among MSEs be promoted in Thailand, as these have been proven to be highly beneficial elsewhere. Entrepreneurs should be made more aware of the importance and usefulness of these associations, and urged to participate actively. Initially, the associations should be assisted and strengthened (through targeted government support) in order that their functions can be effectively performed. These functions should cover at least the following:

· representing the MSEs in dealings with government and other parties;
· providing or acting as a vehicle for the provision of BDS to the MSEs; and
· being a focal point in monitoring the development and needs of MSEs.

The associations of MSEs might be established independently, or within the present framework of the Employers’ Confederation of Thailand (ECOT), ECONTHAI, or the Thai Chamber of Commerce.

Based on the findings of this survey, the editor also adds the following two recommendations.

Recommendation 5: A study on the factors affecting women entrepreneurs.

It is recommended that a further detailed study be carried out to determine the existing barriers and constraints (including physical, procedural and psychological) facing first-time women entrepreneurs in Thailand. In addition, the study would be expected to recommend practical and tangible remedial actions which can lead to greater economic empowerment of women engaged in micro and small enterprise activities. [Editor’s addition]

Recommendation 6: Access to skills upgrading for MSEs

It is recommended that appropriate forms of educational upgrading and skills training programmes be provided for owners and workers in the micro and small enterprise sector. This would be a substantial contribution to human capital development, and it would also help to elevate vulnerable groups and enable them to identify less marginal economic activities, as well as contributing to the overall competitiveness of the MSE sector and Thai industry in general. [Editor’s addition]

Annex I: Tables 2 - 31

Table 2. General Information on Entrepreneurs - the Bangkok Survey

Issues

Microenterprises

Small Enterprises

Total


Supported Microenterprises

Independent Microenterprises

All ME




DPW(M/f.)

UCDO(M/f.)

M/f.

Services

Trading

All Ind. ME


M/f.

Services

Trading

All SE


Number:

17

6

4

18

10

32

55

18

3

1

22

77

Sex:












Female

15

5

3

12

5

20

40

7

-

-

7

47

Male

2

1

1

6

5

12

15

11

3

1

15

30


17

6

4

18

10

32

55

18

3

1

22

77

Age:













20-30

2

1

1

1

-

2

5

2

-

2

7

31-40

6

2

3

12

3

18

26

6

2

1

7

33

41-50

5

-

-

4

3

7

12

5


-

7

19

51-60

2

3

-

1

1

2

7

2

1

-

3

10

>60

2

-

-

-

3

3

5

3

-

-

3

8


17

6

4

18

10

32

55

18

3

1

22

77

Education:



Elementary

13

3

-

6

5

11

27

6

1

-

7

34

High school

3

3

1

5

3

9

15

3

1

-

4

19

Vocational

-

-

-

-

-

-

-

5


-

5

5

University

1

-

3

7

2

12

13

4

1

1

6

19

17

6

4

18

10

32

55

18

3

1

22

77

Table 3. General Information on Type of Business - the Bangkok Survey

Issues

Microenterprises

Small Enterprises

Total

Supported Microenterprises

Independent Microenterprises

All ME




DPW(M/f.)

UCDO(M/f.)

M/f.

Services

Trading

All Ind. ME


M/f.

Services

Trading

All SE


Manufacturing

17

6

4

-


4

27

18

-

-

18

45

Products:



Food

8

2

1

-


1

11

-

-

-

-

11

Garments/Cloths

3

2

1

-


1

6

4

-

-

4

10

Herbal shampoo and insect repellent

2

1

-

-


-

3

-

-

-

-

3

Flower garlands

2

-

-

-


-

2

-

-

-

-

2

Funeral flowers

2

-

-

-


-

2

-

-

-

-

2

Brassware

-

1

-

-


-

1

-

-

-

-

1

Picture Frames

-

-

2

-


2

2

1

-

-

1

3

Shoes

-

-

-

-


-

-

2

-

-

2

2

Wooden furniture

-

-

-

-


-

-

3

-

-

3

3

Keys

-

-

-

-


-

-

1

-

-

1

1

Shades

-

-

-

-


-

-

1

-

-

1

1

Beds (steel)

-

-

-

-


-

-

1

-

-

1

1

Water ducts

-

-

-

-


-

-

1

-

-

1

1

Screens

-

-

-

-


-

-

1

-

-

1

1

Graphite rods

-

-

-

-


-

-

1

-

-

1

1

Oxygen

-

-

-

-


-

-

1

-

-

1

1

Ovens

-

-

-

-


-

-

11

-

-

1

1

Trading

-

-

-

-

10

10

10

-

-

1


11

Newspapers & books

-

-

-

-

4

4

4

-

-

-


4

Shoes

-

-

-

-

2

2

2

-

-

-


2

Kitchenware

-

-

-

-

1

1

1

-

-

-


1

Tyres

-

-

-

-

1

1

1

-

-

-


1

Fish Tank & Accessories

-

-

-

-

1

1

1

-

-

-


1

Stationery

-

-

-

-

1

1

1

-

-

-


1

Water quality testing equipment

-

-

-

-


-

-

-


1


1

Services

-

-

-

18

-

18

18

-

3

-

3

21

Laundry

-

-

-

4

-

4

4

-

-

-

-

4

Barber

-

-

-

3

-

3

3

-

-

-

-

3

Beauty salon

-

-

-

2

-

2

2

-

-

-

-

2

Flowers

-

-

-

2

-

2

2

-

-

-

-

2

Silk screen

-

-

-

1

-

1

1

-

-

-

-

1

Bicycle repair

-

-

-

1

-

1

1

-

-

-

-

1

Muffler

-

-

-

1

-

1

1

-

1

-

1

2

Driving lessons

-

-

-

1

-

1

1

-

-

-

-

1

Xerox copying

-

-

-

1

-

1

1

-

-

-

-

1

Import/export

-

-

-

1

-

1

1

-

-

-

-

1

Environmental consultant

-

-

-

-

-

-

-

-

1

-

1

1

Computer system analyst

-

-

-

1

-

1

1

-

-

-

-

1

Installing aluminum frames

-

-

-

-

-

-

-

1

-

1

1

Grand total

17

6

4

18

10

32

55

18

3

1

22

77

Table 4. General Information on Number of Workers - the Bangkok Survey

Issues

Microenterprises

Small Enterprises

Total


Supported Microenterprises

Independent Microenterprises

All ME




DPW(M/f)

UCDO(M/f.)

M/f.

Services

Trading

All Ind. ME


M/f.

Services

Trading

All SE


1-5

7

3

4

15

7

26

36

2

-

2

38

6-10

9

1

2

3

5

15

9

2

-

11

26

11-20

-

-

-

1

-

1

1

3

-

1

4

5

21-50

-

1

-

-

-

-

1

4

1


5

6

>50

1

1

-

-

-

-

2

-

-

-

-

2

17

6

4

18

10

32

55

18

3

1

22

77

Table 5. Value of assets and premises ownership of MSEs - the Bangkok survey

Value of assets (Baht)

Microenterprises

Small Enterprises

Total

Supported Microenterprises

Independent Microenterprises

All ME



DPW(M/f.)

UCDO(M/f.)

M/f.

Services

Trading

All Ind. ME

M/f.

Services

Trading

All SE


<10,000

2

2

-

1

1

2

6

-

-

-

-

6

10,000-30,000

12

-

-

4

3

7

19

-

-

-

-

19

30,001-50,000

2

1

1

-

1

2

5

1

-

-

1

6

50,001-100,000

1

-

2

4

1

7

8

3

-

-

3

11

100,001-200,000

-

1

1

3

2

6

7

2

-

-

2

9

200,001-500,000

-

1

-

2

1

3

4

1

2

-

3

7

500,001-1,000,000

-

1

-

3

-

3

4

7

-

-

7

11

1,000,001-5,000,000

-

-

-

1

1

2

2

3

-

1

4

6

5,000,001-10,000,000

-

-

-

-

-

-

-

-

-

-

-

-

10,000,001-20,000,000

-

-

-

-

-

-

-

1

-

1

1

>20,000,000

-

-

-

-

-

-

-

1

-

-

1

1

17

6

4

18

10

32

55

18

3

1

22

77

Own premises

.

-

1

3

2

6

6

11

1

1

13

19

Rent premises

-

-

3

15

8

26

26

7

2

-

9

35

-

-

4

18

10

32

32

18

3

1

22

54

Table 6. Commercial registration of MSEs - the Bangkok survey

Issues

Microenterprises

Small Enterprises

Total


Supported Microenterprises

Independent Microenterprises

All ME




DPW(M/f.)

UCDO(M/f.)

M/f.

Services

Trading

All Ind. ME


M/f.

Services

Trading

All SE


No Registration

16

4

2

3

3

8

28

2

-

-

2

30

Registered

1

2

2

15

7

24

27

16

3

1

20

47

17

6

4

18

10

32

55

18

3

1

22

77

To be legal

1

1

2

14

7

23

25

16

3

1

20

45

Forced

-

1

-

1

-

1

2

-

-

-

-

2

1

2

2

15

7

24

27

16

3

1

20

47

Easy

1

1

2

9

6

17

19

7

_

1

8

27

Complicated

-

-

-

4

-

4

4

2

1

-

3

7

Moderate

-

1

-

2

1

3

4

7

2

-

9

13

1

2

2

15

7

24

27

16

3

1

20

47

Table 7. Source of Investment and Years of Establishment of MSEs - the Bangkok Survey

Issues

Microenterprises

Small Enterprises

Total

Supported Microenterprises

Independent Microenterprises

All ME



DPW(M/f.)

UCDO(M/f.)

M/f.

Services

Trading

All Ind. ME

M/f.

Services

Trading

All SE


Own investment only

-

2

3

17

9

29

31

7

1

-

8

39

Loan from government

17

1

-

-

-

-

18

-

-

-

-

18

Loan from cooperatives

-

2

-

-

-

-

2

-

-

-

-

2

Loan from bank

-

1

-

-

1

1

2

11

2

1

14

16

Loan from friends & relatives

-

-

1

1

-

2

2

-

-

-

-

2

Loan from money lender

-

-

-

-

-

-

-

-

-

-

-

17

6

4

18

10

32

55

18

3

1

22

77

Years of establishment

<1 year

13

1

1

6

1

8

22

1

-

-

1

23

1-2 years

3

1

1

-

1

2

6

1

-

-

1

7

3-5 years

-

2

1

6

-

7

9

1

-

-

1

10

5-10 years

1

2

-

3

3

6

9

4

1

1

6

15

>10 years

-

-

1

3

5

9

9

11

2

-

13

22


17

6

4

18

10

32

55

18

3

1

22

77

Table 8. Difficulties in starting-up of MSEs - the Bangkok survey

Issues

Microenterprises

Small Enterprises

Total

Supported Microenterprises

Independent Microenterprises

All ME



DPW(M/f.)

UCDO(M/f.)

M/f.

Services

Trading

All Ind. ME

M/f.

Services

Trading

All SE


No difficulties

9

3

2

7

6

15

27

6

6

33

Difficulties with funding

11

2

1

7

4

12

25

10

2

1

13

38

Difficulties in finding Location

11

3

1

9

4

14

28

5

-

5

33

Difficulties in finding skilled workers

4

1

-

1

-

1

6

4

2

6

12

(More than one factor)

35

9

4

24

14

42

86

25

4

1

30

116

Table 9. The Technology aspect of MSEs - Bangkok survey

Issues

Microenterprises

Small Enterprises

Total

Supported Microenterprises

Independent Microenterprises

All ME



DPW(M/f.)

UCDO(M/f.)

M/f.

Services

Trading

All Ind. ME


M/f.

Services

Trading

All SE


Satisfied with present technology

11

4

2

9

7

18

33

10

-

-

10

43

Not satisfied because of:

6

2

2

9

3

14

22

8

3

1

12

34

Old Equipment

5

2

2

4

3!

9

16

6

3

-

9

25

Inadequate Premises

3

1

1

5

2

8

12

2

1

-

3

15

Poor Raw Materials

1

1

1

3

3

7

9

3

1

-

4

13

Lack of Information

2

-

-

2

2

4

6

5

2

1

8

14

11

4

4

14

10

28

43

16

7

1

24

67

Are workers’ skills adequate

Yes

12

1

3

12

9

24

37

9

1

-

10

47

No

5

5

1

6

1

8

18

9

2

1

12

30

17

6

4

18

10

32

55

18

3

1

22

77

Can be improved by better




Equipment

11

4

1

2

2

5

20

6

2

-

8

28

Technology

6

1

1

3

2

6

13

2

2

1

5

18

Premises

16

1

1

5

1

7

24

1

-

-

1

25

Skills Development

8

3

2

9

2

13

24

10

2

1

13

37

Raw Materials

6

-

1

2

3!

6

12

6

1

-

7

19

Product Design

-

1

1

-

-’

1

2

4

-

-

4

6

47

10

7

21

10

38

95

29

7

2

38

133

Table 10. The Marketing aspect of MSEs - the monthly sales - the Bangkok survey

Issues

Microenterprises

Small Enterprises

Total

Supported Microenterprises

Independent Microenterprises

All ME




DPW(M/f.)

UCDO(M/f.)

M/f.

Services

Trading

All Ind. ME


M/f.

Services

Trading

All SE


Sales per month (Baht)


NA

4

1

-

5

1

6

11

2

1

-

3

14

<2,000

2

-

-

-

-

-

2

-

-

-

-

2

2,001-4,000

3

2

-

2

1

3

8

-

-

-

-

8

4,001-8,000

5

2

1

2

2

5

12

-

-

-

-

12

8,001-20,000

2

-

-

5

2

7

9

1

-

-

1

10

20,001-50,000

-

-

1

-

2

3

3

7

1

-

8

11

50,001-100,000

1

-

2

2

2

6

7

4

-

-

4

11

100,000-200,000

-

-

-

-

-

-

-

2

-

-

2

2

200,001-500,000

-

1

-

1

-

1

2

-

-

-

-

2

500,001-1,000,000

-

-

-

-

-

-

-

-

-

1

1

1

1,000,001-2,000,000

-

-

-

-

-

-

-

-

-

-

-

2,000,001-5,000,000

-

-

-

1

-

1

1

1

1

-

2

3

>5,000,000

-

-

-

-

-

-

-

1

-

-

1

1


17

6

4

18

10

32

55

18

3

1

22

77

Table 11. The Marketing aspect of MSEs - the market and adequacy of income - the Bangkok survey

Issues

Microenterprises

Small Enterprises

Total

Supported Microenterprises

Independent Microenterprises

All ME



DPW(M/f.)

UCDO(M/f.)

M/f.

Services

Trading

All Ind. ME

M/f.

Services

Trading

All SE


Market

Nearby only

5

4

2

10

7

19

28

-

-

-

-

28

Nearby and Bangkok

11

2

2

6

3

11

24

15

3

-

18

42

Bangkok and provinces

1

-

-

2

-

2

3

-

-

1

1

4

Thailand and exports

-

-

-

-

-

-

-

3

-

-

3

3

17

6

4

18

10

32

55

18

3

1

22

77

Business income adequate?

Yes

7

3

3

14

7

24

34

10

2

-

12

46

No

10

3

1

4

3

8

21

8

1

1

10

31

17

6

4

18

10

32

55

18

3

1

22

77

Table 12. The Financial aspect of MSEs - the Bangkok survey

Issues

Microenterprises

Small Enterprises

Total

Supported Microenterprises

Independent Microenterprises

All ME




DPW(M/f.)

UCDO(M/f.)

M/f.

Services

Trading

All Ind. ME


M/f.

Services

Trading

All SE


Finance received from

-

Bank

-

1

1

2

1

4

5

11

2

1

14

19

Obtaining bank finance easy

-

-

1

2

-

3

3

-

-

-

-

3

Obtaining bank finance complicated

-

-

-

-

1

1

1

-

-

-

-

1

Supplier

-

-

1

2

3

6

6

-

-

-

-

6

Friends & Relatives

-

-

1

3

1

5

5

-

-

-

-

5

Cooperatives

-

-

-

1

-

1

1

-

-

-

-

1

None

17

5

1

11

6

18

40

7

1

-

8

48


17

6

4

19

11

34

57

18

3

1

22

79

Table 13. The legal aspect of MSEs - the Bangkok survey

Issues

Microenterprises

Small Enterprises

Total

Supported Microenterprises

Independent Microenterprises

All ME



DPW(M/f.)

UCDO(M/f.)

M/f.

Services

Trading

All Ind. ME

M/f.

Services

Trading

All SE


Legal Constraints on business

-

None

15

6

3

15

9

27

48

18

3

1

22

70

Tax

1

-

1

2

1

4

5

-

-

-

-

5

Food & drugs regulation

1

-

-

-

-

-

1

-

-

-

-

1

Patent law

-

-

-

1

-

1

1

-

-

-

-

1

17

6

4

18

10

32

55

18

3

1

22

77

Regulations helpful to business

-

None

16

6

2

14

7

23

45

17

3

1

21

66

Tax reduction

1

-

2

4

3

9

10

1

-

-

1

11

17

6

4

18

10

32

55

18

3

1

22

77

Table 14. Assistance (BDS) to MSEs - the Bangkok survey

Issues

Microenterprises

Small Enterprises

Total


Supported Microenterprises

Independent Microenterprises








DPW(M/f.)

UCDO(M/f.)

M/f.

Services

Trading

All Ind. ME

All ME

M/f.

Services

Trading

All SE


Assistance Received


None

7

2

1

13

10

24

33

15

3

-

18

51

Skills development

1

1

1

1

-

2

4

1

-

-

1

5

(Supplier)

(Supplier)

-

-

(Fed Thai Ind.)

-

-

Information

2

1

2

4

-

6

9

-

-

1

1

10

(Friend/Customer)

(Assoc./ Supplier)

-

-

(Supplier)

-

-

Fairs occasionally

12

1

-

-

-

-

13

-

-

-

-

13

Marketing & information

-

4

-

-

-

-

4

2

-

-

2

6

(Friend/Customer)

22

9

4

18

10

32

63

18

3

1

22

85

Assistance Desired:
(including financial)













None

4

2

2

10

10

22

28

13

3

-

16

44

Marketing

10

4

2

4

-

6

20

4

-

-

4

24

Financial

8

1

-

1

2

3

12

2

1

-

3

15

Skills development

1

-

-

3

-

3

4

-

-

-

-

4

R&D, product development

1

2

-

-

-

-

3

-

-

1

1

4

Supplier

-

-

-

-

-

-

-

1

-

-

1

1

Information

-

-

-

1

-

1

1

-

-

-

-

1

Premises

1

-

-

-

-

-

1

-

-

-

-

1

25

9

4

19

12

35

69

20

4

1

25

94

Table 15. Associations of MSEs - the Bangkok survey

Issues

Microenterprises

Small Enterprises

Total

Supported Microenterprises

Independent Microenterprises

All ME




DPW(M/f.)

UCDO(M/f.)

M/f.

Services

Trading

All Ind. ME


M/f.

Services

Trading

All SE


None

-

-

4

17

10

31

31

18

2

1

21

52

Presently member of business association

-

-

-

1

-

1

1

-

1

-

1

2

Member of co-op or women group

17

6

-

-

-

-

23

-

-

-

-

23

17

6

4

18

10

32

55

18

3

1

22

77

Would association be useful?

Yes

13

3

2

6

1

9

25

-

-

-

-

25

No

1

1

1

6

4

11

13

16

2

1

19

32

Don’t know

3

2

1

6

5

12

17

2

1

-

3

20

17

6

4

18

10

32

55

18

3

1

22

77

What kind of association?

Larger cooperatives

8

3

-

1

1

2

13

-

-

-

-

13

Association of same business

5

-

2

5

-

7

12

-

-

-

-

12

(More than single counting)

13

3

2

6

1

9

25

-

-

-

-

25

Table 16. On entrepreneurship and business prospect - the Bangkok survey

Issues

Microenterprises

Small Enterprises

Total

Supported Microenterprises

Independent Microenterprises

All ME



DPW(M/f.)

UCDO(M/f.)

M/f.

Services

Trading

All Ind. ME

M/f.

Services

Trading

All SE


Will quit if can get steady job?

Yes

5

-

-

3

5

8

13

1

1

-

2

15

No

12

6

4

15

5

24

42

17

2

1

20

62

17

6

4

18

10

32

55

18

3

1

22

77

Will advice others for?

Yes

12

6

3

16

5

24

42

16

1

1

18

60

No

5

-

1

2

5

8

13

2

2

4

17

17

6

4

18

10

32

55

18

3

1

22

77

Business potential:

Questionable

2

2

-

-

2

2

6

1

1

-

2

8

Struggling

7

2

-

6

5

11

20

4

1

-

5

25

Sustainable

5

2

3

9

3

15

22

6

-

-

6

28

Good potential

3

-

1

3

-

4

7

7

1

1

9

16

17

6

4

18

10

32

55

18

3

1

22

77

Table 17. General information on entrepreneurs - the Phetchaburi survey

Issues

Microenterprises

Small Enterprises

Total


Supported Microenterprises

Independent Microenterprises

All ME




DPW(M/f.)

DIP(M/f.)

M/f.

Services

Trading

All Ind. ME


M/f.

Services

Trading

All SE


Number:

1

6

2

2

3

7

14

11

2

-

13

27

Sex:

Female

1

6

1

2

-

3

10

5

-

-

5

15

Male

-

-

1

-

3

4

4

6

2

-

8

12

Total

1

6

2

2

3

7

14

11

2

-

13

27

Age:

20-30

-

-

1

-

-

1

1

1

-

-

1

2

31-40

1

2

1

1

1

3

6

6

1

-

7

13

41-50

-

.1

-

1

2

3

6

2

1

-

3

9

51-60

-

1

-

-

-

-

1

2

-

-

2

3

>60

-

-

-

-

-

-

-

-

-

-

-

-

Total

1

6

2

2

3

7

14

11

2

-

13

27

Education:

Elementary

1

3

1

-

-

1

5

3

-

-

3

8

High School

-

1

1

-

2

3

4

4

1

-

5

9

Vocational

-

2

-

2

-

2

4

2

1

-

3

7

University

-

-

-

-

1

1

1

2

-

-

2

3

Total

1

6

2

2

3

7

14

11

2

-

13

27

Table 18. General information on type of business - Phetchaburi

Issues

Microenterprises

Small Enterprises

Total

Supported Microenterprises

Independent Microenterprises

All ME




DPW(M/f.)

DIP(M/f.)

M/f.

Services

Trading

All Ind. ME


M/f.

Services

Trading

All SE


Manufacturing

1

6

2

-

-

2

9

11

11

20

Food

1

3

-

-

-

-

4

3

-

-

3

7

Garments/cloths

-

2

-

-

-

-

2

-

-

-

-

2

Funeral flower

-

1

-

-

-

-

1

-

-

-

-

1

Palmwood ware

-

-

1

-

-

-

-

-

-

-

-

Sticker

-

-

1

-

-

-

-

-

-

-

-

Metal works

-

-

-

-

-

-

-

2

-

-

-

Truck/trailer body

-

-

-

-

-

-

-

2

-

-

-

Wooden door/window panel

-

-

-

-

-

-

-

3

-

-

-

Plastic shipping tray

-

-

-

-

-

-

-

1

-

-

-

Trading

-

-

-

-

3

3

3

-

-

-

-

3

Tire

-

-

-

-

1

1

1

-

-

-

-

1

Car audio

-

-

-

-

1

1

1

-

-

-

-

1

Alternator

-

-

-

-

1

1

1

-

-

-

-

1

Services

-

-

-

2

-

2

2

-

2

-

2

4

Laundry

-

-

-

1

-

1

1

-

-

-

-

1

Beautician school

-

-

-

1

-

1

1

-

-

-

-

1

Body shop

-

-

-

-

-

-

-

-

1

-

1

1

Tractor repair

-

-

-

-

-

-

-

-

1

-

1

1

1

6

2

2

3

7

14

11

2

13

27

Table 19. General information on number of workers Phetchaburi survey

Issues

Microenterprises

Small Enterprises

Total


Supported Microenterprises

Independent Microenterprises

All ME




DPW(M/f.)

DIP(M/f.)

M/f.

Services

Trading

All Ind. ME


M/f.

Services

Trading

All SE


Number of workers

1-5

-

4

1

2

3

6

10

-

-

-

-

10

6-10

1

1

1

-

-

1

3

4

-

-

4

7

11-20

-

-

-

-

-

-

-

2

2

-

4

4

21-50

-

1

-

-

-

-

1

3

-

-

3

4

>50

-

-

-

-

-

-

-

2

-

-

2

2

Total

1

6

2

2

3

7

14

11

2

-

13

27

Table 20. Value of assets and premises ownership of MSEs Phetchaburi

Issues

Microenterprises

Small Enterprises

Total

Supported Microenterprises

Independent Microenterprises

All ME



DPW(M/f.)

DIP(M/f.)

M/f.

Services

Trading

All Ind. ME

M/f.

Services

Trading

All SE


Asset valve

< 10,000

-

-

-

-

-

-

-

-

-

-

-

-

10,000-30,000

-

3

-

-

-

-

3

1

-

-

1

4

30,001-50,000

1

1

-

-

-

-

2

-

-

-

-

2

50,001-100,000

-

-

-

1

1

2

2

1

-

-

1

3

100,001-200,000

-

1

2

-

-

2

3

-

-

-

-

3

200,001-500,000

-

1

-

-

-

-

1

3

-

-

3

4

500,001-1,000,000

-

-

-

-

1

1

1

-

-

-

-

1

1,000,001-5,000,000

-

-

-

1

1

2

2

2

1

-

3

5

5,000,001-10,000,000

-

-

-

-

-

-

-

2

1

-

3

3

10,000,001-20,000,000

-

-

-

-

-

-

-

1

-

-

1

1

>20,000,000

-

-

-

-

-

-

-

1

-

-

1

1

1

6

2

2

3

7

14

11

2

-

13

27

Own premises

-

-

1

1

2

3

4

10

1

-

11

15

Rent premises

-

-

1

1

8

-

10

1

1

-

2

12

-

-

2

2

10

3

14

11

2

-

13

27

Table 21. Commercial registration of MSEs - the Phetchaburi survey

Issues

Microenterprises

Small Enterprises

Total

Supported Microenterprises

Independent Microenterprises

All ME




DPW(M/f.)

DIP(M/f.)

M/f.

Services

Trading

All Ind. ME


M/f.

Services

Trading

All SE


Registration status

No Registration

1

4

2

2

-

4

9

-

-

-

-

9

Registered

-

2

-

-

3

3

5

11

2

-

13

18

1

6

2

2

3

7

14

11

2

-

13

27

Reason for registering

To be legal

-

2

-

-

3

3

5

11

2

-

13

18

Forced

-

-

-

-

-

-

-

-

-

-

-

-

2

-

-

3

3

5

11

2

-

13

18

Ease of registration

Easy

-

2

-

-

-

-

2

6

2

-

8

10

Complicated

-

-

-

-

-

-

-

1

-

-

1

1

Moderate

-

-

-

-

3

3

3

4

-

-

4

7

-

2

-

-

3

3

5

11

2

-

13

18

Table 22. Source of investment and years of establishment of MSEs - the Phetchaburi survey

Issues

Microenterprises

Small Enterprises

Total

Supported Microenterprises

Independent Microenterprises

All ME



DPW(M/f.)

DIP(M/f.)

M/f.

Services

Trading

All Ind. ME

M/f.

Services

Trading

All SE


Own investment only

-

-

2

1

1

4

4

6

1

-

7

11

Loan from government

1

6

-

-

-

-

7

-

-

-

-

7

Loan from cooperatives

-

-

-

-

-

-

-

-

-

-

-

-

Loan from bank

-

-

-

1

2

3

3

5

1

-

6

9

Loan from friends & relatives

-

-

-

-

-

-

-

-

-

-

-

-

Loan from money lender

-

-

-

-

-

-

-

-

-

-

-

-

1

6

2

2

3

7

14

11

2

-

13

27

Years of establishment

<1 year

-

-

-

-

-

-

-

1

-

-

1

1

1-2 years

1

-

-

-

-

-

1

-

-

-

-

1

3-5 years

-

3

1

2

1

4

7

1

1

-

2

9

5-10 years

-

2

-

-

-

-

2

3

1

-

4

6

>10 years

-

1

1

-

2

3

4

6

-

-

6

10

1

6

2

2

3

7

14

11

2

-

13

27

Table 23. Difficulties in starting-up of MSEs - the Phetchaburi survey

Issues

Microenterprises

Small Enterprises

Total

Supported Microenterprises

Independent Microenterprises

All ME




DPW(M/f.)

DIP(M/f.)

M/f.

Services

Trading

All Ind. ME


M/f.

Services

Trading

All SE


No difficulties

-

2

1

1

-

2

4

2

1

-

3

7

Difficulties with funding

1

2

-

-

1

1

4

3

1

1

5

9

Difficulties in finding location

-

-

-

-

-

-

-

2

-

-

2

2

Difficulties in finding market

-

2

1

-

2

3

5

-

-

-

-

5

Difficulties in finding skilled workers

-

1

-

1

1

2

3

5

-

-

5

8

(More than single counting)

-

7

2

2

4

8

15

12

2

1

15

31

Table 24. Technology aspect of MSEs - the Phetchaburi survey

Issues

Microenterprises

Small Enterprises

Total

Supported Microenterprises

Independent Microenterprises

All ME



DPW(M/f.)

DIP(M/f.)

M/f.

Services

Trading

All Ind. ME

M/f.

Services

Trading

All SE


Satisfied with present technology

-

5

-

2

3

5

10

7

2

-

9

19

Not satisfied because of:

1

1

2

-

-

2

4

4

-

-

4

8

Old equipment

1

1

2

-

-

2

4

2

-

-

2

6

Inadequate premises

-

-

-

-

-

-

-

-

-

-

-

-

Poor raw materials

-

-

-

-

-

-

-

1

-

-

1

1

Lack of information

-

-

-

-

-

-

-

1

-

-

1

1

1

1

2

-

-

2

4

4

-

-

4

8

Are workers skills adequate

Yes

1

5

2

2

2

6

12

10

2

-

12

24

No

-

1

-

-

1

1

2

1

-

-

1

3

Total

1

6

2

2

3

7

14

11

2

-

13

27

Can be improved by better

Equipment

1

1

1

-

-

1

3

-

-

-

-

3

Technology

-

-

-

-

-

-

-

-

-

-

-

-

Premises

-

-

-

-

-

-

-

-

-

-

-

-

Skills development

-

-

-

-

-

-

-

-

-

-

-

-

Raw materials

-

-

-

-

-

-

-

-

-

-

-

-

Product design

-

-

-

-

-

-

-

-

-

-

-

-


1

1

1

-

-

1

3

-

-

-

-

3

Table 25. The Marketing aspect of MSEs - the monthly sales - the Phetchaburi survey

Issues

Microenterprises

Small Enterprises

Total


Supported Microenterprises

Independent Microenterprises

All ME




DPW(M/f.)

DIP(M/f.)

M/f.

Services

Trading

All Ind. ME


M/f.

Services

Trading

All SE


Sales per month (Baht)

NA

-

-

1

1

2

4

4

8

1

-

9

13

<2,000

-

-

-

-

-

-

-

-

-

-

-

-

2,001-4,000

1

1

-

-

-

-

2

-

-

-

-

2

4,001-8,000

-

-

-

1

-

1

1

-

-

-

-

1

8,001-20,000

-

3

-

-

-

-

3

-

-

-

-

3

20,001-50,000

-

1

-

-

-

-

1

-

1

-

1

2

50,001-100,000

-

1

-

-

1

1

2

2

-

-

2

4

100,000-200,000

-

-

-

-

-

-

-

-

-

-

-

-

200,001-500,000

-

-

1

-

-

1

1

1

-

-

1

2

500,001-1,000,000

-

-

-

-

-

-

-

-

-

-

-

-

1,000,001-2,000,000

-

-

-

-

-

-

-

-

-

-

-

-

2,000,001-5,000,000

-

-

-

-

-

-

-

-

-

-

-

-

>5,000,000

-

-

-

-

-

-

-

-

-

-

-

-

1

6

2

2

3

7

14

11

2

-

13

27

Table 26. The marketing aspect of MSEs, the market and adequacy of income - the Phetchaburi survey

Issues

Microenterprises

Small Enterprise

Total

Supported Microenterprises

Independent Microenterprises

All ME



DPW(M/f.)

DIP(M/f.)

M/f.

Services

Trading

All Ind. ME

M/f.

Services

Trading

All SE


Market

Nearby only

1

3

1

2

3

6

10

5

-

-

5

15

Nearby and Bangkok

-

2

-

-

-

-

2

4

2

-

6

8

Bangkok and provinces

-

-

-

-

-

-

-

-

-

-

-

-

Thailand and exports

-

1

1

-

-

1

2

2

-

-

2

4


1

6

2

2

3

7

14

11

2

-

13

27

Business income adequate?

Yes

1

5

2

1

2

5

11

10

2

-

12

23

No

-

1

-

1

1

2

3

1

-

-

1

4

1

6

2

2

3

7

14

11

2

-

13

27

Table 27. The Financial Aspect of MSEs - the Phetchaburi Survey

Issues

Microenterprises

Small Enterprises

Total

Supported Microenterprises

Independent Microenterprises

All ME




DPW(M/f.)

DIP(M/f.)

M/f.

Services

Trading

All Ind. ME


M/f.

Services

Trading

All SE


Financial Received from


Bank

-

-

-

1

3

4

4

10

1

-

11

15

Easy

-

-

-

-

3

3

3

-

-

-

-

3

Complicated

-

-

-

-

-

-

-

-

-

-

-

-

Supplier

-

-

-

-

-

-

-

-

-

-

-

-

Friends & Relatives

-

-

-

-

-

-

-

-

-

-

-

-

Cooperatives

-

2

1

-

-

1

3

-

-

-

-

3

None

1

4

1

1

-

2

7

1

1

-

2

9

Total

1

6

2

2

3

7

14

11

2

-

13

27

Table 28. The legal aspect of MSEs - the Phetchaburi survey

Issues

Microenterprises

Small Enterprises

Total

Supported Microenterprises

Independent Microenterprises

All ME




DPW(M/f.)

DIP(M/f.)

M/f.

Services

Trading

All Ind. ME


M/f.

Services

Trading

All SE


Legal constraints to business

-

None

1

5

2

2

3

7

13

5

2

-

7

20

Tax

-

1

-

-

-

-

1

3

-

-

3

4

Labor law

-

-

-

-

-

-

-

2

-

-

2

2

Land use law

-

-

-

-

-

-

-

1

-

-

-

Others

-

-

-

-

-

-

-

2

-

-

2

2

Total

1

6

2

2

3

7

14

13

2

-

14

28

Regulations helpful to business

-

None

1

6

2

2

3

7

14

11

1

-

12

26

Tax reduction

-

-

-

-

-

-

-

-

1

-

1

1

Total

1

6

2

2

3

7

14

11

2

-

13

27

Table 29. Assistance (BDS) to MSEs - the Phetchaburi survey

Issues

Microenterprises

Small Enterprises

Total

Supported Microenterprises

Independent Microenterprises

All ME




DPW(M/f.)

DIP(M/f.)

M/f.

Services

Trading

All Ind. ME


M/f.

Services

Trading

All SE














-

Assistance Received

-

None

1

3

-

2

2

4

8

9

-

-

9

17

Skills development

1

1

1

-

-

1

3

2

2

-

4

7

(Supplier)

-

-

(FTI, TPI)

(Supplier)

-

-

Information

-

1

-

-

1

1

2

-

-

-

-

2

(Friend/Customer)

(Supplier)

-

-

-

Fairs occasionally

1

1

-

-

-

-

2

-

-

-

-

2

Marketing & information

1

2

-

-

-

-

3

-

-

-

-

3

4

8

1

2

3

6

18

11

2

-

13

31

Assistance Desired:
(including financial)













None

-

2

2

2

3

7

9

10

2

-

12

21

Marketing

1

2

-

-

-

-

3

1

-

-

1

4

Financial

-

-

-

-

-

-

-

-

-

-

-

-

Skills Development

-

-

-

-

-

-

-

-

-

-

-

-

R&D, Product Development

-

2

-

-

-

-

2

-

-

-

-

2

Supplier

-

-

-

-

-

-

-

-

-

-

-

-

Information

-

-

-

-

-

-

-

-

-

-

-

-

Premises

1

-

-

-

-

-

1

-

-

-

-

1

Total

2

6

2

2

3

7

15

11

2

-

13

28













Table 30. The issues of associations of MSEs - the Phetchaburi survey

Issues

Microenterprises

Small Enterprises

Total

Supported Microenterprises

Independent Microenterprises

All ME




DPW(M/f.)

DIP(M/f.)

M/f.

Services

Trading

All Ind. ME


M/f.

Services

Trading

All SE


None

-

3

2

2

2

6

9

6

1

-

7

16

Presently Member of Business Association

-

-

-

-

1

1

1

5

1

-

6

7

(Prov. CoC)

(Prov. CoC, FTI, TPI)

Member of co-op or women group

1

3

-

-

-

-

4

-

-

-

-

4

Total

1

6

2

2

3

7

14

11

2

-

13

27

Would association be useful?

Yes

-

-

-

-

1

1

1

3

1

-

4

5

No

-

-

2

-

-

2

2

2

1

-

3

5

Don’t know

1

6

-

2

2

4

11

6

-

-

6

17

Total

1

6

2

2

3

7

14

11

2

-

13

27

What kind of Association?

Larger cooperatives

-

-

-

-

-

-

-

-

-

-

-

Association of Same business

-

-

-

-

1

1

1

3

1

-

4

5

(More than single counting)

-

-

-

-

1

1

1

3

1

-

4

5

Table 31. On Entrepreneurship and business prospect - the Phetchaburi survey

Issues

Microenterprises

Small Enterprises

Total

Supported Microenterprises

Independent Microenterprises

All ME




DPW(M/f.)

DIP(M/f.)

M/f.

Services

Trading

All Ind. ME


M/f.

Services

Trading

All SE


Will quit if can get steady job?

Yes

-

1

-

1

-

1

2

-

-

-

-

2

No

1

5

2

1

3

6

12

11

2

-

13

25

Total

1

6

2

2

3

7

14

11

2

-

13

27

Will advise others to go into business?

Yes

1

5

2

1

3

6

12

11

2

-

13

25

No

-

1

-

1

-

1

2

-

-

-

-

2

1

6

2

2

3

7

14

11

2

-

13

27

Business potential:

Questionable

-

-

-

1

-

1

1

-

-

-

-

1

Struggling

1

2

-

1

-

1

4

6

-

-

6

10

Sustainable

-

3

1

-

3

4

7

4

-

-

4

11

Good potential

-

1

1

-

-

1

2

1

2

-

3

5

Total

1

6

2

2

3

7

14

11

2

-

13

27

Annex II: Figures 1 to 9


Figure 1. Gender in MSEs - Bangkok survey


Figure 2. Gender in MSEs - Petchaburi survey


Figure 3. Education level of entrepreneurs - Bangkok survey


Figure 4. Education level of entrepreneurs - Petchaburi survey


Figure 5. Age of entrepreneurs - Bangkok survey


Figure 6. Age of entrepreneurs - Petchaburi survey


Figure 7. Sales versus Assets


Figure 8. Sales versus Workers


Figure 9. Assets versus Workers

Annex III: List of enterprises surveyed

No.

Q.No.

name

company

Product

Bus. Type

Sponsor

Size

Province

1

1

Tawin Tammada

readymade clothes

Garments

Manufacturing

DPW

micro

BKK

2

6

Buopai

funeral flower

Funeral Flower

Manufacturing

DPW

micro

BKK

3

9

Chanchai Promnat

chumchon pahon 46

Rug

Manufacturing

DPW

micro

BKK

4

24

Janya Tongpang

Garment

Manufacturing

DPW

micro

BKK

5

25

Somyong

samakkee thai cheuy thai

Snack(peanuts)

Manufacturing

DPW

micro

BKK

6

31

Somchai
Sengswang

banana cake

Banana Cake

Manufacturing

DPW

micro

BKK

7

32

Kanya Ponluey

dokmai chumchonbangbao

Flower Garland

Manufacturing

DPW

micro

BKK

8

33

Somkuan
Tawinpong

dokmaisod

Flower Garland

Manufacturing

DPW

micro

BKK

9

35

Mali Samartkul

thaisweet

Thai Sweet

Manufacturing

DPW

micro

BKK

10

36

Jitchamnong

chilipaste

Chilipaste

Manufacturing

DPW

micro

BKK

11

42

Puangpen
Tanomwong

thaisweet

Thai Sweet

Manufacturing

DPW

micro

BKK

12

48

Porntip

samunprai rajburana

Herbal Shampoo

Manufacturing

DPW

micro

BKK

13

49

Lek

kaehatonburee

Processed Pork

Manufacturing

DPW

micro

BKK

14

50

Saiyud Srisombat

funeral flower

Funeral Flower

Manufacturing

DPW

micro

BKK

15

54

Chalong
Sukontasap

thaisweet

Thai Sweet

Manufacturing

DPW

micro

BKK

16

56

Nantiya

maeban bangpanieng

Dried Shrimp

Manufacturing

DPW

micro

BKK

17

58

Udom

chomchonwatboapan

Herbal Shampoo

Manufacturing

DPW

micro

BKk

18

5

sermkit bakery

Bakery

Manufacturing

Own

micro

BKK

19

7

Chaniwan

rosemary

Dress Maker

Manufacturing

Own

micro

BKK

20

46

Purita Wiriyanakin

miss crosstich

Picture Frame

Manufacturing

Own

micro

BKK

21

20

Manoch

so

Picture Frame

Manufacturing

Relatives

micro

BKK

22

2

Pracha Nawanil

rice coop

Garments

Manufacturing

UCDO

micro

BKK

23

3

Chawala
Bunyaratapan

satri payathai

Processed Pork

Manufacturing

UCDO

micro

BKK

24

8

Busakorn lamyai

woven handbag

Woven Handbag

Manufacturing

UCDO

micro

BKK

25

11

Somkid
Duangngen

chumchonkrungthep coop

Brass/Garment

Manufacturing

UCDO

micro

BKK

26

34

Fatima

sweet

Snack

Manufacturing

UCDO

micro

BKK

27

51

Pranee

chumchonsuanruen

Fragrance Candle

Manufacturing

UCDO

micro

BKK

28

17

cristina

Beauty Salon

Service

Friends

micro

BKK

29

4

Jurairat

aw salon

Hair Salon

Service

Own

micro

BKK

30

12

Dang Malin

chandang laundry

Laundry

Service

Own

micro

BKK

31

14

Nongnuch
Boonyarat

moonlight art

Silk Screen

Service

Own

micro

BKK

32

16

s. baber

Barber

Service

Own

micro

BKK

33

21

Wanna

fewna

Flowers Arrangement

Service

Own

micro

BKK

34

27

Vipa Saesim

madee

Barber

Service

Own

micro

BKK

35

28

anupong panit

Motorcycle Repair

Service

Own

micro

BKK

36

29

weerakityon

Exhaust Pipe

Service

Own

micro

BKK

37

30

jaew

Beauty Salon

Service

Own

micro

BKK

38

37

pairoj laundry

Laundry

Service

Own

micro

BKK

39

38

laundry

Laundry

Service

Own

micro

BKK

40

40

darycare laundry

Laundry

Service

Own

micro

BKK

41

41

Puangkaew
Sawsawang

driving school

Driving School

Service

Own

micro

BKK

42

43

swang

Copying Service

Service

Own

micro

BKK

43

47

Kanoknit Lakdee

kanoknit

Flowers Arrangement

Service

Own

micro

BKK

44

55

Opas

accendtrade

Processed Wood

Service

Own

micro

BKK

45

107

Surapon
Pitaklimsakul

pink technology

Computer Service

Service

Own

Micro

BKK

46

23

tekheng

Books

Trading

Bank

micro

BKK

47

10

Noi saesim

newspaper

Newspaper

Trading

Own

micro

BKK

48

13

311

Books

Trading

Own

micro

BKK

49

15

Utai
Techataweechai

chaichareon

Kitchenware

Trading

Own

micro

BKK

50

18

karnjana

newyarnyon

Tire

Trading

Own

micro

BKK

51

19

srinuan

Student Shoes

Trading

Own

micro

BKK

52

22

Paisan

tantaweesit

Fish Tank & Accessories

Trading

Own

micro

BKK

53

26

Sompob

Books

Trading

Own

micro

Bkk

54

39

micky shop

Stationary

Trading

Own

micro

BKK

55

44

Viset

sriwattana

Shoes/Handbag

Trading

Own

micro

BKK

56

45

Somboon

poonsiri

Wooden

Manufacturing

Bank

sme

BKK

Stationery/Gift

57

57

Tongkam
Boonyawetshwi

diamon hair studio

Wedding Dress, Gown

Manufacturing

Bank

sme

BKK

58

63

Panida

fenida

Garments

Manufacturing

Bank

sme

BKK

59

64

Somlim Senghu

patanakarnkon

Water Duct

Manufacturing

Bank

sme

BKK

60

66

Vichai Vilailak

vichaiwit

Screen

Manufacturing

Bank

sme

BKK

61

68

thaicarbon and graphite

Graphite Rods

Manufacturing

Bank

sme

BKK

62

69

Nipon

c.k. wood

Door Frame

Manufacturing

Bank

sme

BKK

Chuswatchai


63

73

Somjai

maitreejit

Oxygen

Manufacturing

Bank

sme

BKK

64

74

Atikarn
Sookprasert

h.b.d. machine tool

Baking Ovens

Manufacturing

Bank

sme

BKK

65

60

usahakampollert

Keys

Manufacturing

Own

sme

BKK

66

61

Pisanmetee

Shades

Manufacturing

Own

sme

BKK

67

62

sappradit

Beds

Manufacturing

Own

sme

BKK

68

65

Choosak
Chinwong

waist band

Waist Band

Manufacturing

Own

sme

BKK

69

67

Aniruth Pumee

sandals

Sandals

Manufacturing

Own

sme

BKK

70

70

saw nite

Shoes

Manufacturing

Own

sme

BKK

71

75

Pranom Sasakul

dollar furniture

Furniture

Manufacturing

Own

sme

BKK

72

76

Vijit
Tangsatjavitoon

art gallery & frame

Frames

Manufacturing

Own

sme

BKK

73

77

Yupa

f.b.I.

Wedding Dress

Manufacturing

Own

sme

BKK

74

52

Mana Aswangkul

cms. Engineering

Environ. Consulting

Service

Bank

sme

BKK

75

71

Pichet

m.f.

Aluminium Frames

Service

Own

sme

BKK

76

72

Worawit

s. somchareun

Mufflers

Service

Own

sme

BKK

Chansinapa

77

53

watertest

Water Test Equipment

Trading

Bank

sme

BKK

78

88

Nongnuch
Chomying

nongmakok creditcoop

Funeral Flower

Manufacturing

DIP/Coop

micro

Petchaburi

79

101

Titinan Pukaew

stri hoobkrapong coop

Woven hat & bag

Manufacturing

DIP/Coop

micro

Petchaburi

80

90

Sopin Plubpiboon

lemongrass juice

Lemongrass Juice

Manufacturing

DPW

micro

Petchaburi

81

91

Chutima Mutakarn

thai sweet

Thai sweet

Manufacturing

DIP

micro

Petchaburi

82

96

Rampuei

stri oamsup donsai

Ready to wear

Manufacturing

DIP

micro

Petchaburi

83

82

Samruey Pahuphan

thai sweet(banana)

Thai sweet(banana)

Manufacturing

DIP

micro

Petchaburi

84

83

Suwannee Suksaiam

maeban lahanyai

Chilipaste

Manufacturing

DIP

micro

Petchaburi

85

98

Chairat

sticker

Sticker

Manufacturing

Own

micro

Petchaburi

86

106

Anong Onying

palm wood crafts

Hardwood ware

Manufacturing

Own

micro

Petchaburi

87

103

Nong Butjinda

nong laundry

Laundry

Service

Own

Micro

Petchaburi

88

105

Vijit Rakkasikorn

vijitbeauty salon

Beautilian

Service

Own

micro

Petchaburi

89

99

Somwang

petchburee audio

Car audio service

Trade

Own

micro

Petchaburi

90

100

Prasert

battery

Alternator

Trade

Own

micro

Petchaburi

91

102

Vichai
Suppamitsatien

tyre

Tyres

Trade

Own

micro

Petchaburi

92

79

Ket Vongpanit

petchnavarat

Thai snack

Manufacturing

Own

sme

Petchaburi

93

80

Aree Suwanrak

Areerat electric

Metal working

Manufacturing

Own

sme

Petchaburi

94

81

Saisamorn
Howtawanit

sutatphan

Metal working

Manufacturing

Own

sme

Petchaburi

95

84

Sith

paiboon petchburee

Truck/Trailer Body

Manufacturing

Own

sme

Petchaburi

96

86

Pensiri

thai niyom

Door/Window Panel

Manufacturing

Own

sme

Petchaburi

97

87

Surachai

kaw. karnchang

Door/Window Panel

Manufacturing

Own

sme

Petchaburi

98

89

Prapas Jaijaruen

kaysinee

Truck/Trailer Body

Manufacturing

Own

sme

Petchaburi

99

92

Suwat Pawasutipisit

senmee petchburee

Noodles

Manufacturing

Own

sme

Petchaburi

100

94

Taweekiat
Tuamsak

donsaikamai

Door/Window Panel

Manufacturing

Own

sme

Petchaburi

101

97

Prateep

p&r plaspack

Plastic Shipping Tray

Manufacturing

Own

sme

Petchaburi

102

104

Aree Poonsub

maelamied mawkaeng

Thai Sweet

Manufacturing

Own

sme

Petchaburi

103

85

Samreung
Krungsrimuang

tayang kawponsee

Body Shop

Service

Own

sme

Petchaburi

104

95

Manas Poonma

manas tractor

Tractor Repair

Service

Own

sme

Petchaburi

Annex IV: ILO Recommendation concerning General Conditions to Stimulate Job Creation in Small and Medium-sized Enterprises, 1998 (No. 189)

PREAMBLE

The General Conference of the International Labour Organization,

Having been convened at Geneva by the Governing Body of the International Labour Office, and having met in its Eighty-sixth Session on 2 June 1998, and

Recognizing the need for the pursuit of the economic, social, and spiritual well-being and development of individuals, families, communities and nations,

Aware of the importance of job creation in small and medium-sized enterprises,

Recalling the resolution concerning the promotion of small and medium-sized enterprises adopted by the International Labour Conference at its 72nd Session, 1986, as well as the Conclusions set out in the resolution concerning employment policies in a global context, adopted by the Conference at its 83rd Session, 1996,

Noting that small and medium-sized enterprises, as a critical factor in economic growth and development, are increasingly responsible for the creation of the majority of jobs throughout the world, and can help create an environment for innovation and entrepreneurship,

Understanding the special value of productive, sustainable and quality jobs,

Recognizing that small and medium-sized enterprises provide the potential for women and other traditionally disadvantaged groups to gain access under better conditions to productive, sustainable and quality employment opportunities,

Convinced that promoting respect for the Forced Labour Convention, 1930, the Freedom of Association and Protection of the Right to Organise Convention, 1948, the Right to Organise and Collective Bargaining Convention, 1949, the Equal Remuneration Convention, 1951, the Abolition of Forced Labour Convention, 1957, and the Discrimination (Employment and Occupation) Convention, 1958, will enhance the creation of quality employment in small and medium-sized enterprises and in particular that promoting respect for the Minimum Age Convention and Recommendation, 1973, will help Members in their efforts to eliminate child labour,

Also convinced that the adoption of new provisions on job creation in small and medium-sized enterprises, to be taken into account together with:

(a) the relevant provisions of other international labour Conventions and Recommendations as appropriate, such as the Employment Policy Convention and Recommendation, 1964, and the Employment Policy (Supplementary Provisions) Recommendation, 1984, the Co-operatives (Developing Countries) Recommendation, 1966, the Human Resources Development Convention and Recommendation, 1975, and the Occupational Safety and Health Convention and Recommendation, 1981; and

(b) other proven ILO initiatives promoting the role of small and medium-sized enterprises in sustainable job creation and encouraging adequate and common application of social protection, including Start and Improve Your Business and other programmes as well as the work of the International Training Centre of the ILO in training and skills enhancement, will provide valuable guidance for Members in the design and implementation of policies on job creation in small and medium-sized enterprises,

Having decided upon the adoption of certain proposals with regard to general conditions to stimulate job creation in small and medium-sized enterprises, which is the fourth item on the agenda of the session, and

Having determined that these proposals shall take the form of a Recommendation;

adopts, this seventeenth day of June of the year one thousand nine hundred and ninety-eight, the following Recommendation which may be cited as the Job Creation in Small and Medium-Sized Enterprises Recommendation, 1998.

I. DEFINITION, PURPOSE AND SCOPE

1. Members should, in consultation with the most representative organizations of employers and workers, define small and medium-sized enterprises by reference to such criteria as may be considered appropriate, taking account of national social and economic conditions, it being understood that this flexibility should not preclude Members from arriving at commonly agreed definitions for data collection and analysis purposes.

2. Members should adopt measures which are appropriate to national conditions and consistent with national practice in order to recognize and to promote the fundamental role that small and medium-sized enterprises can play as regards:

(a) the promotion of full, productive and freely chosen employment;

(b) greater access to income-earning opportunities and wealth creation leading to productive and sustainable employment;

(c) sustainable economic growth and the ability to react with flexibility to changes;

(d) increased economic participation of disadvantaged and marginalized groups in society;

(e) increased domestic savings and investment;

(f) training and development of human resources;

(g) balanced regional and local development;

(h) provision of goods and services which are better adapted to local market needs;

(i) access to improved quality of work and working conditions which may contribute to a better quality of life, as well as allow large numbers of people to have access to social protection;

(j) stimulating innovation, entrepreneurship, technology development and research;

(k) access to domestic and international markets; and

(l) the promotion of good relations between employers and workers.

3. In order to promote the fundamental role of small and medium-sized enterprises referred to in Paragraph 2, Members should adopt appropriate measures and enforcement mechanisms to safeguard the interests of workers in such enterprises by providing them with the basic protection available under other relevant instruments.

4. The provisions of this Recommendation apply to all branches of economic activity and all types of small and medium-sized enterprises, irrespective of the form of ownership (for example, private and public companies, cooperatives, partnerships, family enterprises, and sole proprietorships).

II. POLICY AND LEGAL FRAMEWORK

5. In order to create an environment conducive to the growth and development of small and medium-sized enterprises, Members should:

(a) adopt and pursue appropriate fiscal, monetary and employment policies to promote an optimal economic environment (as regards, in particular, inflation, interest and exchange rates, taxation, employment and social stability);

(b) establish and apply appropriate legal provisions as regards, in particular, property rights, including intellectual property, location of establishments, enforcement of contracts, fair competition as well as adequate social and labour legislation;

(c) improve the attractiveness of entrepreneurship by avoiding policy and legal measures which disadvantage those who wish to become entrepreneurs.

6. The measures referred to in Paragraph 5 should be complemented by policies for the promotion of efficient and competitive small and medium-sized enterprises able to provide productive and sustainable employment under adequate social conditions. To this end, Members should consider policies that:

(1) create conditions which:

(a) provide for all enterprises, whatever their size or type:

(i) equal opportunity as regards, in particular, access to credit, foreign exchange and imported inputs; and

(ii) fair taxation;

(b) ensure the non-discriminatory application of labour legislation, in order to raise the quality of employment in small and medium-sized enterprises;

(c) promote observance by small and medium-sized enterprises of international labour standards related to child labour;

(2) remove constraints to the development and growth of small and medium-sized enterprises, arising in particular from:

(a) difficulties of access to credit and capital markets;

(b) low levels of technical and managerial skills;

(c) inadequate information;

(d) low levels of productivity and quality;

(e) insufficient access to markets;

(f) difficulties of access to new technologies;

(g) lack of transport and communications infrastructure;

(h) inappropriate, inadequate or overly burdensome registration, licensing, reporting and other administrative requirements, including those which are disincentives to the hiring of personnel, without prejudicing the level of conditions of employment, the effectiveness of labour inspection or the system of supervision of working conditions and related issues;

(i) insufficient support for research and development;

(j) difficulties in access to public and private procurement opportunities.

(3) include specific measures and incentives aimed at assisting and upgrading the informal sector to become part of the organized sector.

7. With a view to the formulation of such policies Members should, where appropriate:

(1) collect national data on the small and medium-sized enterprise sector, covering inter alia quantitative and qualitative aspects of employment, while ensuring that this does not result in undue administrative burdens for small and medium-sized enterprises;

(2) undertake a comprehensive review of the impact of existing policies and regulations on small and medium-sized enterprises, with particular attention to the impact of structural adjustment programmes on job creation;

(3) review labour and social legislation, in consultation with the most representative organizations of employers and workers, to determine whether:

(a) such legislation meets the needs of small and medium-sized enterprises, while ensuring adequate protection and working conditions for their workers;

(b) there is a need for supplementary measures as regards social protection, such as voluntary schemes, cooperative initiatives and others;

(c) such social protection extends to workers in small and medium-sized enterprises and there are adequate provisions to ensure compliance with social security regulations in areas such as medical care, sickness, unemployment, old-age, employment injury, family, maternity, invalidity and survivors’ benefits.

8. In times of economic difficulties, governments should seek to provide strong and effective assistance to small and medium-sized enterprises and their workers.

9. In formulating these policies, Members:

(1) may consult, in addition to the most representative organizations of employers and workers, other concerned and competent parties as they deem appropriate;

(2) should take into account other policies in such areas as fiscal and monetary matters, trade and industry, employment, labour, social protection, gender equality, occupational safety and health and capacity-building through education and training;

(3) should establish mechanisms to review these policies, in consultation with the most representative organizations of employers and workers, and to update them.

III. DEVELOPMENT OF AN ENTERPRISE CULTURE

10. Members should adopt measures, drawn up in consultation with the most representative organizations of employers and workers to create and strengthen an enterprise culture which favours initiatives, enterprise creation, productivity, environmental consciousness, quality, good labour and industrial relations, and adequate social practices which are equitable. To this end, Members should consider:

(1) pursuing the development of entrepreneurial attitudes, through the system and programmes of education, entrepreneurship and training linked to job needs and the attainment of economic growth and development, with particular emphasis being given to the importance of good labour relations and the multiple vocational and managerial skills needed by small and medium-sized enterprises;

(2) seeking, through appropriate means, to encourage a more positive attitude towards risk-taking and business failure by recognizing their value as a learning experience while at the same time recognizing their impact on both entrepreneurs and workers;

(3) encouraging a process of lifelong learning for all categories of workers and entrepreneurs;

(4) designing and implementing, with full involvement of the organizations of employers and workers concerned, awareness campaigns to promote:

(a) respect for the rule of law and workers’ rights, better working conditions, higher productivity and improved quality of goods and services;

(b) entrepreneurial role models and award schemes, taking due account of the specific needs of women, and of disadvantaged and marginalized groups.

IV. DEVELOPMENT OF AN EFFECTIVE SERVICE INFRASTRUCTURE

11. In order to enhance the growth, job-creation potential and competitiveness of small and medium-sized enterprises, consideration should be given to the availability and accessibility of a range of direct and indirect support services for them and their workers, to include:

(a) business pre-start-up, start-up and development assistance;

(b) business plan development and follow-up;

(c) business incubators;

(d) information services, including advice on government policies;

(e) consultancy and research services;

(f) managerial and vocational skills enhancement;

(g) promotion and development of enterprise-based training;

(h) support for training in occupational safety and health;

(i) assistance in upgrading the literacy, numeracy, computer competencies and basic education levels of managers and employees;

(j) access to energy, telecommunications and physical infrastructure such as water, electricity, premises, transportation and roads, provided directly or through private sector intermediaries;

(k) assistance in understanding and applying labour legislation, including provisions on workers’ rights, as well as in human resources development and the promotion of gender equality;

(l) legal, accounting and financial services;

(m) support for innovation and modernization;

(n) advice regarding technology;

(o) advice on the effective application of information and communication technologies to the business process;

(p) access to capital markets, credit and loan guarantees;

(q) advice in finance, credit and debt management;

(r) export promotion and trade opportunities in national and international markets;

(s) market research and marketing assistance;

(t) assistance in product design, development and presentation;

(u) quality management, including quality testing and measurement;

(v) packaging services;

(w) environmental management services.

12. As far as possible, the support services referred to in Paragraph 11 should be designed and provided to ensure optimum relevance and efficiency through such means as:

(a) adapting the services and their delivery to the specific needs of small and medium-sized enterprises, taking into account prevailing economic, social and cultural conditions, as well as differences in terms of size, sector and stage of development;

(b) ensuring active involvement of small and medium-sized enterprises and the most representative organizations of employers and workers in the determination of the services to be offered;

(c) involving the public and private sector in the delivery of such services through, for example, organizations of employers and workers, semi-public organizations, private consultants, technology parks, business incubators and small and medium-sized enterprises themselves;

(d) decentralizing the delivery of services, thereby bringing them as physically close to small and medium-sized enterprises as possible;

(e) promoting easy access to an integrated range of effective services through “single window” arrangements or referral services;

(f) aiming towards self-sustainability for service providers through a reasonable degree of cost recovery from small and medium-sized enterprises and other sources, in such a manner as to avoid distorting the markets for such services and to enhance the employment creation potential of small and medium-sized enterprises;

(g) ensuring professionalism and accountability in the management of service delivery; (h) establishing mechanisms for continuous monitoring, evaluation and updating of services.

13. Services should be designed to include productivity-enhancing and other approaches which promote efficiency and help small and medium-sized enterprises to sustain competitiveness in domestic and international markets, while at the same time improving labour practices and working conditions.

14. Members should facilitate access of small and medium-sized enterprises to finance and credit under satisfactory conditions. In this connection:

(1) credit and other financial services should as far as possible be provided on commercial terms to ensure their sustainability, except in the case of particularly vulnerable groups of entrepreneurs;

(2) supplementary measures should be taken to simplify administrative procedures, reduce transaction costs and overcome problems related to inadequate collateral by, for example, the creation of non-governmental financial retail agencies and development finance institutions addressing poverty alleviation;

(3) small and medium-sized enterprises may be encouraged to organize in mutual guarantee associations;

(4) the creation of venture capital and other organizations, specializing in assistance to innovative small and medium-sized enterprises, should be encouraged.

15. Members should consider appropriate policies to improve all aspects of employment in small and medium-sized enterprises by ensuring the non-discriminatory application of protective labour and social legislation.

16. Members should, in addition:

(1) facilitate, where appropriate, the development of organizations and institutions which can effectively support the growth and competitiveness of small and medium-sized enterprises. In this regard, consultation with the most representative organizations of employers and workers should be considered;

(2) consider adequate measures to promote cooperative linkages between small and medium-sized enterprises and larger enterprises. In this connection, measures should be taken to safeguard the legitimate interests of the small and medium-sized enterprises concerned and of their workers;

(3) consider measures to promote linkages between small and medium-sized enterprises to encourage the exchange of experience as well the sharing of resources and risks. In this connection, small and medium-sized enterprises might be encouraged to form structures such as consortia, networks and production and service cooperatives, taking into account the importance of the role of organizations of employers and workers;

(4) consider specific measures and incentives for persons aspiring to become entrepreneurs among selected categories of the population, such as women, long-term unemployed, persons affected by structural adjustment or restrictive and discriminatory practices, disabled persons, demobilized military personnel, young persons including graduates, older workers, ethnic minorities and indigenous and tribal peoples. The detailed identification of these categories should be carried out taking into account national socio-economic priorities and circumstances;

(5) consider special measures to improve communication and relations between government agencies and small and medium-sized enterprises as well as the most representative organizations of such enterprises, in order to improve the effectiveness of government policies aimed at job creation;

(6) encourage support for female entrepreneurship, recognizing the growing importance of women in the economy, through measures designed specifically for women who are or wish to become entrepreneurs.

V. ROLES OF ORGANIZATIONS OF EMPLOYERS AND WORKERS

17. Organizations of employers or workers should consider contributing to the development of small and medium-sized enterprises in the following ways:

(a) articulating to governments the concerns of small and medium-sized enterprises or their workers, as appropriate;

(b) providing direct support services in such areas as training, consultancy, easier access to credit, marketing, advice on industrial relations and promoting linkages with larger enterprises;

(c) cooperating with national, regional and local institutions as well as with intergovernmental regional organizations which provide support to small and medium-sized enterprises in such areas as training, consultancy, business start-up and quality control;

(d) participating in councils, task forces and other bodies at national, regional and local levels established to deal with important economic and social issues, including policies and programmes, affecting small and medium-sized enterprises;

(e) promoting and taking part in the development of economically beneficial and socially progressive restructuring (by such means as retraining and promotion of self-employment) with appropriate social safety nets;

(f) participating in the promotion of exchange of experience and establishment of linkages between small and medium-sized enterprises;

(g) participating in the monitoring and analysis of social and labour-market issues affecting small and medium-sized enterprises, concerning such matters as terms of employment, working conditions, social protection and vocational training, and promoting corrective action as appropriate;

(h) participating in activities to raise quality and productivity, as well as to promote ethical standards, gender equality and non-discrimination;

(i) preparing studies on small and medium-sized enterprises, collecting statistical and other types of information relevant to the sector, including statistics desegregated by gender and age, and sharing this information, as well as lessons of best practice, with other national and international organizations of employers and workers;

(j) providing services and advice on workers’ rights, labour legislation and social protection for workers in small and medium-sized enterprises.

18. Small and medium-sized enterprises and their workers should be encouraged to be adequately represented, in full respect for freedom of association. In this connection, organizations of employers and workers should consider widening their membership base to include small and medium-sized enterprises.

VI. INTERNATIONAL COOPERATION

19. Appropriate international cooperation should be encouraged in the following areas:

(a) establishment of common approaches to the collection of comparable data, to support policy-making;

(b) exchange of information, desegregated by gender, age and other relevant variables, on best practices in terms of policies and programmes to create jobs and to raise the quality of employment in small and medium-sized enterprises;

(c) creation of linkages between national and international bodies and institutions that are involved in the development of small and medium-sized enterprises, including organizations of employers and workers, in order to facilitate:

(i) exchange of staff, experiences and ideas;

(ii) exchange of training materials, training methodologies and reference materials;

(iii) compilation of research findings and other quantitative and qualitative data, desegregated by gender and age, on small and medium-sized enterprises and their development;

(iv) establishment of international partnerships and alliances of small and medium-sized enterprises, subcontracting arrangements and other commercial linkages;

(v) development of new mechanisms, utilizing modern information technology, for the exchange of information among governments, employers’ organizations and workers’ organizations on experience gained with regard to the promotion of small and medium-sized enterprises;

(d) international meetings and discussion groups on approaches to job creation through the development of small and medium-sized enterprises, including support for female entrepreneurship. Similar approaches for job creation and entrepreneurship will be helpful for disadvantaged and marginalized groups;

(e) systematic research in a variety of contexts and countries into key success factors for promoting small and medium-sized enterprises which are both efficient and capable of creating jobs providing good working conditions and adequate social protection;

(f) promotion of access by small and medium-sized enterprises and their workers to national and international databases on such subjects as employment opportunities, market information, laws and regulations, technology and product standards.

20. Members should promote the contents of this Recommendation with other international bodies. Members should also be open to cooperation with those bodies, where appropriate, when evaluating and implementing the provisions of this Recommendation, and take into consideration the prominent role played by the ILO in the promotion of job creation in small and medium-sized enterprises.

Back cover

Working Paper 1:

Business development services for micro and small enterprises in Thailand



Working Paper 2:

International best practice in micro and small enterprise development



Working Paper 3:

Creating an enabling environment for micro and small enterprises in Thailand



Working Paper 4:

Financial support for micro and small enterprises in Thailand



Working Paper 5:

Needs and characteristics of a sample of micro and small enterprises in Thailand



Working Paper 6:

Micro and small enterprises in Thailand: Definitions and contributions

ILO East Asia Multidisciplinary Advisory Team
ILO Regional Office for Asia and the Pacific
10th Floor, United Nations Building, Rajdamnern Nok Avenue
P.O. Box 2-349, Rajdamnern, Bangkok 10200, Thailand
Tel: 66 2 288 1234; Fax: 66 280 1735; E-mail: bangkok@ilo.org