Thailand’s impressive economic progress over the last ten years owes much to sound macroeconomic policies and a favorable business environment. Rising integration into international goods and service markets and flexible labor markets opened up space for a nearly unrestricted play of competitive forces. In this setting, large numbers of small enterprises were created, spurred by Thailand’s traditional entrepreneurial dynamism. In a few areas, though, SME and entrepreneurship framework conditions need improvement. Suboptimal educational outcomes are reflected in labor market mismatches (shortages of skilled labor). An underdeveloped infrastructure has retarded firm and job creation in impoverished regions. Additionally, entrepreneurial dynamism has been held back by tax complexity, cumbersome regulations, lack of financial funds, and, last but not least, by pervasive corruption. Rectifying these imbalances will help Thailand confront the rapidly rising competitive challenges from neighbouring countries.