Driving sustainability entrepreneurship in Indonesian batik MSMEs: The role of sustainability orientation and government support

Abstract

As a traditional Indonesian craft, batik holds immense cultural significance and economic potential. The COVID-19 pandemic has caused a significant decline in the growth of batik micro, small, and medium enterprises (MSMEs) in Indonesia. This study aims to investigate the role of sustainable orientation and government support in encouraging sustainable entrepreneurship within this sector. The data were obtained using purposive sampling of 32 MSMEs and 89 respondents, including owners, managers, and senior employees. Data analysis was done using the Structural Equation Modeling – Partial Least Square (SEM-PLS) method. The results reveal that economic factors have the greatest influence on the development of sustainable entrepreneurial businesses. While social and environmental considerations also play a role, they are secondary to economic issues. In addition, the study reveals that a strong sustainability orientation, characterized by a balanced emphasis on economic, social, and environmental dimensions, as well as supportive government policies, significantly encourages sustainable entrepreneurship. This orientation motivates businesses to adopt long-term perspectives, prioritize sustainable resource use, and consider the social impact of their operations. It also highlights practical strategies for policymakers and entrepreneurs to integrate sustainability into traditional industries. Therefore, this study contributes to the ongoing discourse on sustainable entrepreneurship, which offers insights into harnessing cultural heritage for economic advantage globally post-pandemic.