The Impact of Demographic Factors of Entrepreneurs on Development of SMEs in Tourism Industry in Sri Lanka

Abstract

The government of Sri Lanka has identified tourism as a main source of foreign income and supporting the industry in a major scale. The prolonged civil war hampered the arrival of tourists the Northern Province and some parts of the Eastern Province while island's northern coastal belt put totally unreachable. But now any individual can start a new business in this area as war is ended. Further, it is required less initial capital to start a small business in tourism industry. On the other hand these small and medium businesses can be operated from owners? home. Many owners operate their business on a part time basis as this affords them the flexibility often needed to meet their family responsibilities. Because of this easiness, not only men but also women are entering to tourism industry to earn income for their families. Therefore the purpose of this study is to identify the impact of demographic factors of owners on small and medium business development in tourism in Sri Lanka. Four hypotheses were formulated using deductive approach. The study was conducted relating to small and medium business owners of tourism industry in Sri Lanka. Type of investigation was co relational. It was cross sectional in time horizon. The unit of analysis of this study was at individual level. The structured survey was administered to cover the sample. Based on simple random sampling, 100 small and medium business owners were selected. The sample frame was Association of Small and Medium Enterprises in Tourism Sri Lanka. The data analyses included univariate, bivariate and multivariate analyses. To test the hypotheses, correlation, regression analysis and Independent Sample T Test were performed. The study revealed that differences in SME development between male and female owners. Male owned SMEs show greater development than female owned SMEs. Consequently, the most SMEs are owned by individuals who are in between 31 and 40 years of age. The results proved that when educational level goes up development of SMEs goes up too. Finally, it was found that, SME owners who have many experiences have the possibility to survive in the industry. It is better to lessen the obstacles which face by women owners and to share and implement best practices and experiences and to develop professional skills and respond appropriately to the needs of the industry it is recommended to provide many facilities and opportunities to SMEs owners.