Determinants of Sustainable Rural Community-based Value Chains

Abstract

Failure to understand business from a value chain perspective was identified in the National Entrepreneurship Policy 2030 as one of the challenges that need to be addressed for an entrepreneur's sustainability. Value chains refer to the activities that add value at each stage in developing, producing, and delivering quality products to customers. This paper aims to identify the determinants of effective and sustainable factors that underpin rural community-based value chains in their business conduct. In achieving these objectives, the methodology includes a case study on the Warisan Dapur Lenggong Business Project in Lenggong, Malaysia, library searches, and an analysis of previous literature reviews on value chains and community-based small businesses. The finding shows that factors contributing to the success of rural entrepreneurs in value chains can be categorised into internal and external patterns. Internal individual factors include entrepreneurial culture, skills and knowledge, adaptability, continuous improvement and Innovation, networking and collaboration. In contrast, internal community factors include community, leadership, local association and staff support, value proposition and differentiation, financial management, community resilience and perseverance. In comparison, external factors include access to market information, technology and infrastructural limitations, political influence and government policy. This paper also hopes to strengthen the body of knowledge on how effective value chains help entrepreneurs achieve sustainable competitive advantage as one of the agenda for 2030 Sustainable Development and for making Malaysia a higher-income and civilised nation.