Success of Small and Medium Enterprises in Myanmar: Role of Technological, Organizational, and Environmental Factors

Abstract

Small and medium enterprises (SMEs) are key to economic growth and prosperity in developing countries. In this study we build on the technology-organization-environment (TOE) framework, a widely used theoretical perspective in organizational research, to understand factors that contribute to the success of SMEs in Myanmar, a socio-politically important yet volatile developing country that recently opened its economy to the world. We identify a set of TOE factors that explain the success and reveal the challenges of SMEs in Myanmar. Based on surveys conducted over four years (2013 to 2016), we found that information and communication technologies (i.e., internet use and web presence for business purposes) were positively associated with SME success, suggesting that SMEs in Myanmar, which has been globally isolated for many decades, could indeed benefit from modern ICTs. We also found that larger SMEs experienced greater success in terms of sales and profitability than smaller SMEs, and manufacturing SMEs overall performed better than SMEs in other industries. This study adds to the literature on SME success, early stages of ICT usage, the TOE framework, and have practical implications for SMEs in Myanmar and other developing countries. The unique characteristics of Myanmar will likely shed light on our understanding of SME success in other ASEAN (Association of Southeast Asian Nations) countries.

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