Assessing Sustainability Components in Entrepreneurial Ecosystems for SMEs: A Fuzzy AHP Approach

Abstract

Purpose/Motivation: Sustainability has become an increasingly important consideration for small and medium-sized enterprises (SMEs) as they navigate the complex and dynamic entrepreneurial landscape of an organisations. The present study investigates the critical components of sustainable entrepreneurial ecosystems for small and medium enterprises. Recognizing SME’s vital role in economic development and sustainability, the research identifies and prioritizes key factors that contribute to long term success within a supportive EE (Entrepreneurial ecosystems). Literature Review/ Research Gaps: Building on established EE frameworks, the research identified ten core components of sustainability. These components include policy and regulatory framework, entrepreneurial culture, social capital, human capital workforce, access to finance, market access and demand, networking and collaborations, infrastructure & supportive services, sustainability and social responsibility, and innovation & research development. The study addresses the gap in understanding how these components interact and contribute to SMEs sustainability, particularly in the face of uncertainty and subjective expert judgements Design/Methodology: The study utilizes a Fuzzy Analytic Hierarchy Process (FAHP) to analyze the interrelationships between identified components. FAHP effectively quantifies expert opinions, allowing for a more nuanced and realistic assessment of complex systems like EEs. This multi criteria decision making method is particularly suitable for addressing the inherent uncertainty and subjectivity in expert evaluations, effectively translating qualitative judgments into quantifiable values. Fifteen experts were selected based on their expertise in entrepreneurship and ecosystem development, provided pair wise comparisons of the ten sustainability criteria using a fuzzy linguistic scale. Analysis and Findings: The analysis shows that the ‘policy and regulatory’ domain has emerged as the most critical component for SMEs, sustainability, highlighting the importance of government support. Access to finance and social capital were ranked second and third, respectively. Further, innovations and R&D and sustainability and social responsibility were also identified as highly significant for achieving long term sustainability. Managerial/Policy implications: This study provides valuable insights for policymakers and entrepreneurs, seeking to foster sustainable SMEs growth. Government should prioritize policies that create enabling environments, while SMEs should focus on innovation, social responsibility, and building strong networks. These findings emphasize a need for collaborative efforts to build robust and sustainable EEs that empower SMEs.