From Resource Wealth to SME Growth: Structural Barriers and Entrepreneurial Realities in Porgera District, Papua New Guinea

Small and Medium Enterprises (SMEs) are widely recognised as engines of inclusive economic growth; however, their development often remains constrained in resource-rich regions characterised by evolving institutional frameworks. This study examines the demographic and contextual factors associated with SME participation in the Porgera-Paiela District of Papua New Guinea. Using a cross-sectional survey, data from 382 respondents across four Local-Level Governments were analysed using binary logistic regression and descriptive analysis of perception-based responses.
The regression results indicate that age and household income are significant predictors of SME ownership. Individuals aged above 50 years are significantly less likely to operate SMEs (OR = 0.165, p = 0.001) compared with the reference group (18–30 years), while higher household income (>K1500) is associated with a lower likelihood of SME participation (OR = 0.234, p = 0.002), suggesting that entrepreneurship in the district is largely necessity-driven. Gender does not show a statistically significant association with SME ownership (OR = 0.675, p = 0.255), while education demonstrates non-linear effects. In particular, respondents with high school education display lower odds of SME ownership (OR = 0.282, p = 0.011) compared to respondents with no formal education. This pattern suggests that individuals with higher levels of education may prioritise formal employment opportunities over small business creation. The model demonstrates acceptable explanatory power (Nagelkerke R² = 0.27) and good overall fit (Hosmer–Lemeshow p > 0.05).
Survey responses further indicate that access to finance, institutional coordination, benefit-sharing arrangements, and social stability influence SME development in the district. Drawing on Human Capital, Institutional, Resource-Based, and Social Capital perspectives, the study highlights how individual characteristics interact with contextual conditions to shape entrepreneurial participation in a mining-influenced local economy. The findings suggest that policies promoting entrepreneurship-oriented training, financial inclusion initiatives, improved coordination among development stakeholders, and community-based conflict resolution may support sustainable SME development in the Porgera-Paiela District.