Impact of Business Environment, Entrepreneurial Orientation and Innovation Capability on the success of Handicraft Enterprises in West Bengal, India

Abstract

In West Bengal, India, Micro, Small, and Medium Enterprises (MSMEs) are vital in driving economic growth and poverty reduction through job creation, particularly in the handicraft sector, which fuels the tourism industry. This study uses Confirmatory Factor Analysis (CFA) to assess the impact of the business environment, entrepreneurial orientation, and innovation ability on the success of handicraft-based MSMEs in West Bengal. A total of 100 handicraft-based MSMEs in West Bengal were selected as the sample for this research. According to the results of the CFA, it was determined that the customer’s indicator had the most significant impact on shaping business environment variables. Risk-taking is the primary factor that significantly influences the formation of the entrepreneurial orientation characteristic. Marketing innovation is the most potent determinant of developing innovation capabilities. The handicraft-based MSME operators in West Bengal actively collaborate with suppliers, seeking market prospects and promoting new goods in untapped areas. However, there is a need to enhance technological innovation for sustained growth and success.