Abstract:
From the inception of industrialization of the Sri Lankan economy, commencing from
1920s Small business sector was recognized as an important area to be developed. This
emphasis continued in the ensuring year up to 1977. Even under the free trade economic
policies this area has been recognized to be developed since 1977. Small and medium
business sector represents 86 percent contribution to the employment and its contribution
to total production was 18 percent in 2003. It represents 17 percent value addition to GDP
(Central bank report, 2003). But its progress is not up to the expectation. In this setting
researchers have identified number of factors that have contributed to the failure of this
sector. Some of them are financial, marketing and networking problems, lack of desire to
innovation and no proper business plans with regard to each economic regimes so far
passed.
In this context, this study aims at identifying whether these traditional factors are still
important and or new factors have currently emerged to hinder the development of Small
business sector.
For this purpose this study has selected stratified random sample of fifty small business
entrepreneurs in Galle district covering manufacturing, service, trading, professional
services and others. To analyze collected data both qualitative and quantitative methods
were used particularly based on simple statistical methods such as charts, tables,
percentages.
Accordingly, the study concludes that the traditional factor that is networking problem is
not identified by the respondents as a main contributing factor to the failure of small
business sector while other traditional factors such as finance difficulties, lack of business
plan and lack of desire to do innovation are still playing an important role in the
determination of the success of small business sector.
