Methods for Enhancing Support Policies for Small and Medium-Sized Enterprises in Mongolia

Abstract

The objective of this study is to conduct a comprehensive analysis of the current status, challenges, and development opportunities for Small and Medium-Sized Enterprises (SMEs) in Mongolia, utilizing a system dynamics approach. The research employed a mixed-methods framework, integrating quantitative and qualitative methodologies. Data were gathered from diverse sources, including national statistics, surveys and interviews with SME owners, and studies conducted by government agencies. The findings confirm that SMEs constitute a vital sector for fostering local economic development, enhancing employment, and promoting innovation and technological adoption. Furthermore, the study identifies critical impediments to sustainable SME growth, including financial constraints, limited market access, insufficient human resource competencies, and technological deficiencies. The developed system dynamics model effectively illustrates the mechanisms of SME growth and limitation, mapping the interdependencies among finance, sales, and skills, thereby delineating both positive and negative feedback loops. This research aims to identify the predominant challenges facing Mongolia’s SME sector, propose methods for their amelioration, and employ system dynamics modeling to forecast the potential outcomes of specific policy interventions.