In Thailand, 60 per cent of SMEs expect to see improvements in their business in 2007, compared to 66 per cent in 2006.

Across Asia, the top three concerns that keep business leaders up at night include quality of services (50 per cent), customer loyalty (48 per cent) and the retention of high-quality employees (47 per cent).

In Thailand, 96 per cent of SME respondents expect to maintain, if not increase, their current workforce size in 2007. In mature markets such as Hong Kong, Japan and Singapore, where workforce growth is less likely to occur, 34 per cent of respondents anticipate actual workforce growth in the coming year.

"We are witnessing a fundamental global economic shift, largely due to the rapid emergence of China and India," said Halin Selamat, managing director of UPS Thailand.

While SME leaders acknowledge this shift, many also expressed concerns relating to the availability of business fundamentals such as a qualified workforce, innovation, government support and access to funding and working capital, he said.

In Thailand, lack of government support, access to overseas markets and innovation are seen as major obstacles for SMEs, he added.

In addition to these concerns, SME leaders also see supply-chain management and access to seed funding as crucial to their survival.

Regarding efficient supply-chain management and applied methods, 53 per cent of respondents cited difficulties in forecasting demand. This is especially severe in Indonesia, where all of the respondents considered this as a problem, while 37 per cent of respondents believed that the lack of knowledge and expertise in supply-chain management was also an obstacle to effective management.

With the launch of Suvarnabhumi Airport, SME leaders in Thailand were asked to state the most significant benefit of the new airport to the logistics industry. Some 30 per cent believe that the new airport will enhance shipments to and from Thailand, bringing the Kingdom closer to becoming a leading regional logistics hub.

As China and India continue to emerge as two of the fastest-growing economies in the world, SME leaders in Asia remain more sceptical about the growing dominance of China.

While China is consistently rated by SME leaders as having the greatest prospects for economic growth (92 per cent) in 2007, India's prospects are also viewed as very positive across the region in 2007 (81 per cent).

China's continued economic and trade growth has major implications for SMEs across the region, not least their ability to compete. However, while India is also experiencing its resurgence as a major global leader, especially in key areas such as IT, manufacturing and outsourcing, it is viewed in a more positive light, especially by those contemplating entering the market there.

In relation to China, while SME leaders seem equally divided between those viewing China's continued dominance as a boost (34 per cent) and those who perceive it as both a boost and a threat (34 per cent), many also feel they are unable to compete in terms of labour and production costs (38 per cent).

Additionally, there is also growing concern in relation to increased price competition (25 per cent).

On the other hand, India's business and legislative environment is viewed as positive and encouraging to foreign companies and multinationals (52 per cent). Of these respondents, 13 per cent felt this was because of India's low production and labour costs; 12 per cent believed that it was because India had a good business and investment climate; while 11 per cent believed that India's government policies encouraged foreign investment.

A key component of changing attitudes across the region relates to trade between countries in Southeast Asia and the Middle East.

In addition to the acknowledged intra-Asia trade opportunities, the Middle East is viewed by both Singapore (81 per cent) and Malaysia (79 per cent) as presenting the most promising prospects in relation to trade growth.