Analyzing the Impact of Human Capital on the Sustainable Growth & Development of Small and Medium Enterprises (SMEs): An Empirical Study

Abstract

The Small and Medium Enterprises (SMEs) play a very significant and crucial role in the economic growth of both developed and developing countries. The importance of SMEs, in particular, was highlighted by the Addis Ababa Action Agenda on financing for development as the enterprises are major creators of jobs. They also focus on providing innovative ideas for sustainable development in the developing countries. These SMEs face highly complex and volatile conditions and therefore, have to strive for sustained, smooth and steady growth to remain competitive in the business world. These enterprises aim to create their market value and establish their brand name by adopting sustainable measures. The managers of SMEs are resorting to a blend of different types of capital like financial capital, natural capital, human capital, social capital and constructed capital. Human capital, an emerging concept has caught the attention of economists and industrialists all over the world in the recent past. Various enterprises have started ascertaining the cost of human capital in terms of the skills, knowledge, competitiveness and innovative ideas provided by the individuals. This helps the organization in deciding whether it is able to adapt to the ever changing environment and achieve its goal of sustainable growth and development. The aim of the study was to examine the impact of human capital on the sustainable growth & development of SMEs. A questionnaire based survey on various dimensions of human capital was considered to assess the impact of human capital on the sustainability of the SMEs in Delhi-NCR, India. The statistical tools like Reliability Analysis and Multiple Regression were applied to achieve the results of the study. The study conducted will be beneficial not only to researchers or academicians but also to policy makers.