Designing a model for the sustainability of entrepreneur and small businesses in informal settlements

اقتصاد و توسعه منطقه ای

Article 4, Volume 29, Issue 23, June 2022, Pages 87-115   

Document Type: Original Article

DOI: 10.22067/erd.2022.70087.1039

Authors

saeideh samadzad^{* 1}; Najaf Gharachorloo²

¹Faculty Member, Department of Development Management, ACECR Development and Planning Research Center, Tabriz, Iran

²Faculty Member, Department of Development Management, ACECR Development and Planning Research Center, Tabriz, Iran,

Abstract

 
1- INTRODUCTION
Todays, encouraging the growth of small businesses has been a matter of concern and interest in most developed economies. It is often argued that entrepreneur and small businesses play a major role as an engine of economic growth and they contribute to social wealth through the creation of new businesses and jobs. For these reasons, governments have recently paid more attention to the role of entrepreneur and small businesses. In particular, innovative entrepreneur and small businesses with growth potential are seen as pioneers to develop new business fields in stagnated economies. The issue of business sustainability is important not only in big cities but also in medium and small cities and even informal settlements. In Iran, the phenomenon of informal settlements is one of the most important problems in big and small cities. Meanwhile, East Azerbaijan province, especially the metropolis of Tabriz, is not exempt from the phenomenon of informal settlements. Khalilabad of Tabriz city is one of the informal settlements, which according to the obtained estimates, has a population of 21 thousand and 373 people and is approximately 1.5% of the population of Tabriz city. Surveys have shown that in informal settlements, despite the high capacities in the field of entrepreneurship, the use of these potentials for the development of employment and the labor market has been neglected, and the continuation and stabilization of these types of jobs and businesses is always a problem for entrepreneurs.
 
2- THEORETICAL FRAMEWORK
Sustainability comes from sustainable development, which simply means development that meets the needs of the present without compromising the ability of future generations to meet their own needs. Scholars have defined sustainability differently, with complicated meanings and interpretations. Some researchers, defines sustainability as the balancing of the environment, social and economic aspects. Meanwhile, the stabilization of small businesses and entrepreneurs plays an important role in the economic growth and development of countries.
Entrepreneur and Small Businesses are becoming increasingly important for the creation and development of a modern, dynamic and knowledge-based economy.  This is because of their capacity to promote entrepreneurship and entrepreneurial skills, and because of their ability   to be flexible and adapt quickly to a changing market, and to generate new jobs.  Entrepreneur and Small Businesses is the backbone of the economy. Organization for Economic Cooperation and Development reports   These enterprises make a major contribution in the field of innovation and support regional development and social cohesion.  Also, Entrepreneur and Small Businesses in most low-income countries give significant contribution to GDP growth and the creation of new jobs. For this reason, the identification of external and internal factors affecting the development of Entrepreneur and Small Businesses in informal in informal settlements is very important.
 Researchers divide the causes of instability into two categories: external and internal factors. The external factors of business instability are: 1- Features of the economic system, 2- Competition, 3- Rapid changes in technology, 4- Commercial fluctuations.
 The internal factors of business instability are: 1- Inefficiency of management, 2- Insufficient sales, 3- Pricing Mistakes, 3- Legal-financial issues, 4- Social-value barriers
 
3- METHODOLOGY
In this study, Questionnaire was used for information collection. The questionnaire was validated after some revisions following consulting with professionals and experts. An interpretative equation (ISM) is used to analyze the results of the findings. Interpretive Structural Modeling ISM or Interpretive Structural Modeling is a method for designing the pattern of complex and multiple relationships between the variables of a phenomenon. This method is a type of structural analysis based on the interpretation paradigm. Designing an Interpretive Structural Model (ISM) is a method to investigate the effect of each variable on other variables; In this method, the effective and essential factors are first identified, and then, using the method that has been presented, the relationships between these factors and the way to achieve progress by these factors have been presented.
 
4- RESULTS & DISCUSSION
Based on the findings and affecting factors on development of small businesses and entrepreneurs (Financial-Economical, social-psychological, environmental, legal-political, communication-information, technical-technological, marketing, infrastructure-institutional, personality-individual and physical-spatial factors), variables were classified in 5 different levels. After analyzing the MICMAC, the variables were divided into three groups: influence, independent and dependent variables. Since, according to the results, Financial-economical, institutional- infrastructural, and technical-technological factors are one of the most basic factors in the sustainable development of small businesses and entrepreneurs (Khalilabad of Tabriz).
 
5- CONCLUSIONS & SUGGESTIONS
The results of the research show that financial-Economical, social-psychological, physical-spatial, infrastructural-institutional, marketing, communication-informational, technical-technological and personality-individual factors influence on the sustainability of small businesses and entrepreneurs. Also, because of the importance of the market in the field of small businesses, it is necessary for the government to increase its support in the field of providing suitable platforms (economical, legal, infrastructural, technical factors, etc.), by using the facilities and equipment of other executive bodies.

Keywords

Entrepreneur and Small Businesses; Sustainability; Informal Settlements; Khalilabad

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