Insights on Sustainability of Small and Medium Enterprises in Oman: A Conceptual Framework

Abstract

This paper provides insights on the sustainability of small and medium enterprises (SMEs) in Oman and presents a conceptual framework for the government support to the SMEs. The paper adopted a sequential mixed method of interviews and structured questionnaire including 390 SMEs. Non-parametric techniques of Chi-square test and spearman rank correlation were used. The challenges facing SMEs in Oman include: The rules and regulations of doing business, the competition, and the lack of access to finance. The study also found that there is a positive correlation between government support and sustainability of SMEs in Oman. From the perspective of the government, supporting the SMEs is strategic to diversity the national economy and reduce the unemployment among the youths. This support includes marketing, financial, advisory, management, technical and infrastructural. However, many of the owners of the SMEs were not aware of these supports and raised issues regarding the procedures, laws, regulation and sufficiency of these supports.

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“…Most of the published studies in Oman's SMEs strongly agree about the challenges that affect SMEs' sustainability. Such as complicated rules and regulations, improper business planning, competition, lack of financial access, advisory, complex funding process, technological changes, customer interaction, weak entrepreneurial and workforce skills and knowledge (AL-Zakwani and M. S. K., 2019; Ramachandran and Yahmadi, 2019, Al-Shandoodi et al, 2019, Alqassabi, 2020. The different studies indirectly proved the impact of SC risks and uncertainties on the sustainability of Oman's SMEs, the researcher divides them into internal and external SC effects.…”

“…Arguably, government rules and regulations, competition, financial access, advisory, funding process, technological changes, economic crises, and customer's experience all are the external SC impacts on the sustainability of SMEs, as the various studies around Oman proved. Alqassabi (2020) found that the owners of SMEs admitted rules and regulations, competition, lack of financial access, customer interaction, and technology changes 'respectively' have a significant impact on the sustainability of their business. The study also cited that incubator plays a substantial role in enhancing Oman's SMEs' sustainability.…”

“…In comparison, those whose experiences exceeded six years scored 25 per cent of the total respondents. Moreover, the other significant performance impacts toward Oman's SMEs are rules and regulations, competition, lack of financial access, customer interaction, and association, and lack of skilled workforce which scored from the total respondents of the study respectively 78.7%, 73.1%, 72.6%, 69.2%, 69.0% (Alqassabi, 2020).…”

“…The previous comparisons from 2019 to 2021 indicate that about 3% of circumstances led the total cumulative number of SMEs to increase. However, a report of 2018 from the Times of Oman platform established that 78,848 SMEs had cancelled their registration from the 'Invest Easy' Portal, operated by the Ministry of Commerce and Industry (Alqassabi, 2020). The enterprises that cancelled their registration went through challenges affected their ability to survive.…”

“…Al-Zakwani et al (2019) mentioned that the challenges that impede the continuity of SMEs in Oman include lack of management knowledge and experience, weak labour skills, complicated government rules and regulations toward business, loans taking a long time exceeding one year, and lack of SMEs quotas system. On the other hand, Alqassabi (2020) raised some government contributions and efforts that most entrepreneurs are unaware of, from marketing, financial, advisory, management, technical and infrastructural.…”