Sustainable Entrepreneurship: Government Policy in Encouraging Environmentally Friendly Business Practices in MSMEs

Abstract

This research explores the role of government policies in encouraging environmentally friendly business practices within Micro, Small, and Medium Enterprises (MSMEs). As sustainability becomes an increasingly critical factor in business success, MSMEs face challenges in adopting green practices due to financial constraints, lack of technical expertise, and complex regulations. This study aims to examine how government interventions, such as financial incentives, training programs, and regulatory frameworks, influence the adoption of sustainable practices among MSMEs. Using a qualitative research approach, the study involved interviews with MSME owners and policymakers, along with a review of relevant policies and case studies. The results indicate that while many MSMEs acknowledge the importance of sustainability, they struggle with limited resources and knowledge. Government policies offering financial support, such as subsidies and tax incentives, as well as sustainability training, have been found to significantly ease the transition to green practices. However, challenges remain in the form of fragmented policies, regulatory complexity, and a lack of awareness about available support. The research concludes that more cohesive, streamlined policies and better communication of incentives are necessary to maximize the effectiveness of government interventions. This study contributes to the understanding of how government policies can be tailored to support sustainable entrepreneurship in MSMEs, providing recommendations for improving policy design and implementation to foster greener business practices and enhance market competitiveness.