More than 95 per cent of Bhutan’s industries are still operating as cottage and small businesses, with very few growing into medium or large enterprises. According to the latest Annual Industry Report 2026, this slow transition is limiting industrial growth and raises questions about what is preventing businesses from expanding. According to the Annual Industry Report 2026, small industries account for 59.8 per cent of all active industrial licences, while cottage industries make up 35.7 per cent. An economist BBS talked to says this is not because Bhutan lacks entrepreneurs but because many small businesses remain unprofitable, receive limited access to credit and struggle to become competitive. Experts say helping cottage and small industries grow into larger enterprises will be crucial for creating jobs, boosting exports and strengthening the economy.