SMEs in Thailand (1), like in many other developing countries, play an important role in the national economy. As defined by the Thai government, SMEs employ no more than 200 people, have fixed capital of not more than THB 200 million, are less than 25% owned by one or more enterprises, and are less than 50% foreign owned. In 2009, SMEs represented over 90% of all businesses in Thailand, employed over 60% of the labor force, and accounted for nearly 38% of GDP, of which small enterprises (SE) contributed two-thirds and medium enterprises (ME) one-third (Office of the National Economic and Social Development Board, 2009 in OSMEP 2009). In the Upper North Region of Thailand (2), or northern Thailand, the business sector is dominated by SMEs, of which many use skilled labor to produce handicrafts and other items of cultural interest for the international market.
While the role of SMEs in Thailand‟s economy remains substantial, their share of total GDP has been declining since 2006. To strengthen their role, government instituted a national plan to develop SMEs through creating new product ideas, differentiating products, and using local knowledge and talent. SMEs in Thailand, as elsewhere, face many constraints and as a result are failing to grow. One reason is that owner