Globalization - An Opportunity for Outward Expansion or Survival Risk for Bahrain Small and Medium Enterprises (SMEs)?

Abstract

This study supports the Bahrain’s Economic Vision 2030 which defines a pivotal role of the private sector as the engine of growth and productivity. The country’s national economic strategy is anchored on stimulating entrepreneurial activity to develop a dynamic small and medium enterprise sector. The study which focuses on SME development and promotion is also one of the priority research agenda of the AMA International University of Bahrain. The main objective of this study is to ascertain the state or condition of SMEs in the country in the face of globalization. The descriptive method was used in generating the data set which includes the status of SMEs in Bahrain in the advent of free trade, challenges and opportunities as well as on the effectiveness of interventions, programs and projects of the government and private sector in assisting these SMEs. Ranking, weighted mean and the Likert scales were used to analyze the primary data. Correlation analysis was applied in assessing the significant relationship between the interventions / program / projects for SMEs and the factors that influence business environment. It was found out that globalization specifically free trade can serve as the driving force for the competitive SMEs to become more innovative and produce higher quality of products that are acceptable in the global landscape. On the other hand, if safety nets or appropriate programs / projects are absent or lacking, these SMEs faced difficulties arising from liberalization-induced adjustments. The most difficult issue which limits these SMEs to thrive in the economy is their characteristic of being a small company. They cannot manage their business by themselves to ignore the presence of MNCs and importers that contributed to the strong foreign trade performance of Bahrain. On the other hand, the present economic condition of Bahrain, as construed it as very good one, is a favorable factor in supporting these SMEs from the brunt of free trade.

Keywords: in Bahrain, Globalization and SMEs, SMEs development and promotion, SMEs, SMEs on free trade