The Sustainability of Small Industries Thriving across Generation in Rural Areas

Abstract

This study investigates the sustainability level of small industries that have persevered for up to three generations in rural areas of Indonesia, addressing the significant issue of high failure rates among small industries. Utilizing the Triple Bottom Line framework, this study examined the economic, social, and environmental performance of four small industries that have thrived for multiple generations in Indonesia. Data collection involved semi-structured interviews, focus group discussions (FGDs), and secondary company data. Thematic analysis principles using N-Vivo 12 software were applied to analyze qualitative data, while the RAP 2016 software version R was used for assessing the sustainability index and status. The research findings revealed that the sustainability status of small industries that survived for up to three generations in rural areas was predominantly unsustainable. Economic performance exhibited variability, some falling into the less sustainable category, while social and environmental performances were deemed moderately sustainable. The practical implications of the findings are as follows: the level of competition, government policy, and market access are the most sensitive factors that should be considered to improve economic performance. Meanwhile, small industries must maintain and enhance their social and environmental performance to ensure stability. In addition, the theoretical implication of this finding suggests that the concept of “sustainability” cannot solely be represented by the company’s longevity. Long-lasting small industries may not necessarily be economically, socially, and environmentally sustainable.