IBT Journal of Business Studies (Formerly Journal of Management & Social Sciences) Vol. 10, No. 2, (Fall 2014) 160-167 * The material presented by the authors does not necessarily portray the viewpoint of the editors and the management of the Institute of Business & Technology (IBT). * Dr. Riaz H. Soomro: dr.soomroriaz@gmail.com * Dr. Farooq Aziz: drfarooqaziz89@yahoo.com ©JMSS is published by the Institute of Business and Technology (IBT). Main Ibrahim Hydri Road, Korangi Creek, Karachi-75190, Pakistan. Analysis of Economic and Technological Strategic Factors Affecting the Performance of Small and Medium Enterprises of Apparel Sector in Pakistan Dr. Riaz H. Soomro Hamdard University, Karachi Dr. Farooq Aziz Federal Urdu University of Arts, Science & Technology, Karachi ABSTRACT Keywords: Foreign direct investment; economic growth, Pakistan. JEL Classification: D040, D220 Purpose: The objective of the study is to explore and examine the economic and technological environmental factors affecting the performance of apparel SMEs in Pakistan.. Methodology/Sampling: This study contains a qualitative as well quantitative analysis. Primary data was collected through a questionnaire and structured interviews of the representatives of the apparel sector associations. Those apparel firms were selected that qualified as apparel SMEs as per definition of SME policy (SME Policy 2007, 2007). Findings: Study concludes that interest rates, devaluation and inflation significantly affect the performance and demand dynamics, regional economic cooperation and the only technological factor spending in information technology, do not significantly affect the performance of apparel SMEs in Pakistan. Practical Implications: This study will help managers to take preemptive measures to minimize effect of economic & technological factors affecting performance of SMEs.