­­­PATHWAYS TO SUSTAINABLE DEVELOPMENT: LEVERAGING ENTREPRENEURSHIP, SME GROWTH, AND EMPLOYABILITY IN EMERGING ECONOMIES- EVIDENCE FROM OMAN

Abstract

Sustainable development and economic diversification have become strategic imperatives for emerging economies seeking resilience in the face of global uncertainties. Oman, with its Vision 2040 agenda, emphasizes entrepreneurship, small and medium enterprise (SME) development, and employability enhancement as critical pathways to achieving these goals. This study investigates the interrelationship between these three drivers and their collective impact on sustainable development in Oman. Drawing on empirical evidence and a conceptual framework, the research explores how entrepreneurship promotion fosters innovation and job creation, how SME growth strengthens economic diversification, and how employability enhancement ensures a skilled workforce aligned with market needs. Primary data has been collected through surveys of 480 respondents including entrepreneurs, SME owners, policymakers and other stakeholders. The findings of this study provide strong empirical evidence that SME Development, Entrepreneurship Promotion, and Employability Enhancement significantly contribute to Economic Diversification and Sustainable Development in the Sultanate of Oman. The regression results revealed that SME Development is the strongest predictor of sustainable economic outcomes, followed by Entrepreneurship Promotion and Employability Enhancement. These results are consistent with the broader body of literature arguing that entrepreneurship ecosystems and SME capacity-building are foundational pillars of diversification and long-term sustainability. Recommendations focused on integrated strategies that leverage entrepreneurial ecosystems, SME financing, and workforce development to accelerate sustainable growth. Ultimately, the research underscores the importance of synergistic policy interventions to transform economic structures and achieve long-term sustainability.