Critical success factors for small and medium forest enterprises: A review

Small and medium forest enterprises (SMFEs) are small firms in developing countries aimed at generating income from a diverse set of forest-related activities. They result in multiple dimensions of economic, social, and cultural prosperity in forest-dependent economies, and as such they constitute an important strategy for fostering prosperity. However, SMFEs face a number of barriers and challenges, including inhospitable or incompatible regulatory environments, difficulties achieving economies of scale, and insufficient access to technical and financial capacity to overcome these issues. Through a comprehensive literature review of scholarly research published on the subject of SMFE failures and successes, our study addressed the following question: what political, economic, and socio-cultural conditions are needed for SMFEs to thrive? In answering this question, we identified and characterized twelve (12) emergent critical success factors (CSFs) of enabling business environments: macroeconomic setting, regulatory frameworks, forest law enforcement, tenure and ownership rights, management and land use planning rights, markets, natural capital, financial capital, forest management capacities, business management capacities, organizational capacities, and clustering. The integrative enabling environment framework proposed in our study can be used as a tool by practitioners seeking to promote SMFEs through programs of support or policy reforms. By considering the various CSFs that act as the foundation for successful SMFE development, the efficacy of forest-dependent livelihood interventions aiming to achieve prosperity around the world can be meaningfully enhanced.