Entrepreneurial Ecosystems for Sustainable MSME Development: Aligning SDG 8 and SDG 9 in the Context of North Karnataka

Abstract: Micro, Small, and Medium Enterprises (MSMEs) play a significant role in employment generation, innovation, regional development, and sustainable economic growth; however, their long-term performance depends not only on firm-level capabilities but also on the quality of the entrepreneurial ecosystem in which they operate. This study develops a conceptual model explaining how entrepreneurial ecosystem dimensions contribute to MSME performance and sustainability in the industrial clusters of North Karnataka, while positioning these relationships within the United Nations Sustainable Development Goals (SDGs). The framework integrates Entrepreneurial Ecosystem Theory, Cluster Theory, the Resource-Based View (RBV), and Social Capital Theory to explain how entrepreneurial capabilities and external ecosystem conditions jointly support sustainable enterprise development.

The model incorporates entrepreneurial antecedents—educational qualification, industry experience, family support, and social network support—and MSME cluster characteristics, including geographical proximity, supporting industries, labour availability, and competitive intensity. At the centre of the framework are ten entrepreneurial ecosystem dimensions: Formal Institutions, Entrepreneurial Culture, Social Networks, Physical Infrastructure, Demand, Leadership, Talent, Finance, Knowledge, and Intermediate Business Support Services. These dimensions facilitate access to resources, finance, markets, skills, knowledge, infrastructure, institutional support, and collaborative networks, thereby strengthening firm performance and long-term MSME sustainability.

The framework has particular relevance to SDG 8 (Decent Work and Economic Growth) through entrepreneurship, MSME growth, productivity, and employment; SDG 9 (Industry, Innovation and Infrastructure) through infrastructure, industrial development, innovation, finance, and technological capability; and SDG 17 (Partnerships for the Goals) through stakeholder networks and institutional collaboration. It also provides a supporting linkage to SDG 4 (Quality Education) through entrepreneurial skills, talent development, and knowledge creation. The model therefore extends entrepreneurial ecosystem research by connecting regional MSME development with the broader sustainable development agenda and provides a conceptual basis for policymakers, financial institutions, universities, industry associations, and development agencies seeking to build resilient and sustainable MSME ecosystems.

Keywords: Entrepreneurial Ecosystem; MSME Sustainability; Firm Performance; Industrial Clusters; Sustainable Development Goals; SDG 8; SDG 9; North Karnataka