Factors Influencing Sustainability of Batik SMEs Entrepreneurs

Abstract

Amid the COVID-19 pandemic, sustainable entrepreneurship (SE) has become crucial for the survival of small and medium enterprises (SMEs). The pandemic has significantly impacted SMEs by decreasing product demand and productivity. This study aims to identify factors influencing sustainable entrepreneurship among Batik SME entrepreneurs by examining four latent variables: social, cultural, environmental, and economic. The SE model includes three manifest variables: business size, managerial skills, and the industrial sector, along with the business model. The model was validated using data from Batik SME entrepreneurs on Madura Island, Indonesia. The proposed SE model was tested using the Partial Least Square (PLS) method. The findings indicate that environmental and economic variables significantly influence SE, whereas social and cultural variables do not have a substantial impact. The practical implications of this research include providing Batik SME managers with insights into the key variables that can help sustain their businesses. The government can utilize the SE model to develop strategies for SME recovery. Additionally, the SE model serves as a reference for academics studying SE, particularly for SMEs in the Batik industry and similar sectors.