Strategic Frameworks for Sustainability: Enhancing SMEs Innovative Capability and Performance in Developing Economies

Overview

Sustainability strategies are crucial for SMEs, aligning business practices with societal well-being in accordance with United Nations (UN) 2030 agenda. Notably, SMEs represents 90% businesses worldwide yet, their participation in global value chains remains limited (World Economic Forum, 2023). The disparate reality of developing and developed economies, as well as that of large and small businesses (Wieczorek, 2018) further necessitate the need for closer examination of Sustainable Development Goals (SDGs). These goals are universal and aimed at nations and businesses irrespective of regions or size.

The importance of integrating sustainability into SME practices despite existing challenges cannot be overemphasised, considering their strategic role in both local economies and global market expectations. The extent to which extent entrepreneurs/SMEs owners in developing economies are informed, motivated and implement sustainability strategies remains under researched. Furthermore, the motivations for adopting sustainability strategies vary across business sectors and regions, hence a need for a strategic framework (Garcia-Sanchez, 2021) to foster SMEs growth and effective contribution to the attainment of SDGs and participation in the global value chains (GVCs) without compromise to stakeholder values.

Previous studies have focused on the sustainability potential of SMEs (Falle, et al., 2016; Ghadge, et al., 2017) or compared SMEs in the developed economy by identifying the convergence and divergence sustainability strategies (Moursellas, et al., 2023). However, there is need comparative research across different sectors and countries within developing world. Such research evaluates the impact of market expectations, ethical values, socio-cultural, and regulatory pressures for ascertaining optimal practices that extend beyond SDG 2030 targets. Furthermore, the multifaceted dimensions of innovation capability (Saunila, 2017), varying relevance in different businesses (small or large), and inconclusive relationships with performance outcomes (Fitz-Koch & Nordqvist, 2017; Sanuila, 2020).

The project aims to investigate the motivations for adoption of sustainability strategies by SME owners/Entrepreneurs in developing economies and how these strategies impacts business performance both qualitatively and quantitatively. Alternative Possible approaches could be to employ dynamic capabilities theory and regulatory focus theory (promotion/preventions) to prove insights into entrepreneurs understanding of possible implications, attitudes, and motivations for adopting sustainability practices, assessing the critical success factors, and drivers of change. The outcomes of this research could help stakeholders to develop a more inclusive strategies for integrating sustainability in SMEs strategy development and implementation.

By drawing on interdisciplinary insights from strategic management, innovation management, and entrepreneurship, this research seeks to guide stakeholders on how SMEs can optimise their contribution to SDG goals, enhance their participation in global value chains, and support trade stability as well as inclusive economic development.

References

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