Role of SMEs in Oman: Perspectives of future Employment and Protection Policy Response

Abstract

SMEs is consider as an important component of economic development, create job opportunities, and bring innovation and social welfare. Empirical evidence shows that SMEs plays a major role in creating employment in developed countries. In developing countries there are mixed results-- there is no direct relation between entrepreneurship and employment growth. However, there are very few studies investigates the links between the growth of SMEs and the growth of employment creation in oil dependent economy. Present study investigates the growth of future employment creation across the size of SMEs by using recent survey data conducted by Global Entrepreneurship Monitor (GEM) in Oman. Regression analysis was used to examine the association with future job creation and other factors influencing job creation. Study found that early stage entrepreneurs expecting to provide more than two times of current level of employment by next 5 years. However, established business (EB) entrepreneur’s expected employment growth is negative. This means that after 5 years’ job opportunity will be reduced in established SMEs. Our regression result shows that the male entrepreneur who have higher level of qualification and earning higher income from the business are more likely to create more jobs in next 5 years and so. The study also found that the self-perceived innovation and creativity have positive and significant relation with job creation in future. However, the skills, experience and optimism towards business environment have negative relation with future job creation.