Sustainability of Renewable Energy SMEs in Jordan: A Focus on Business Continuity

Abstract

In recent years, renewable energy (RE) utilisation has expanded exponentially. Following this global trend, along with its clear benefit on the economy of the country, the employment of RE sources has been a major focus for the Jordanian government. Since the RE permanent law in Jordan was endorsed in 2012, many small and medium enterprises (SMEs) were established to operate in this promising market. However, a lot of challenges evolved inhibiting their business continuity, and forcing many to exit.
The broad aim of this research is to identify and understand the factors affecting the economic sustainability and business continuity of SMEs operating in the RE sector in Jordan through the lens of human capital theory and stakeholder theory, and to introduce recommendations and approaches that can enhance the economic sustainability and business continuity of those SMEs, highlighting how these organisations can refine their strategies to drive sustainable growth.
According to Jordan’s Energy and Mineral Resources Commission’s (EMRC) record, there are 379 companies registered to operate in the RE sector in Jordan as of June 2022, most of which are small enterprises that work mostly in trading business. Out of those, 84 companies define as SMEs focusing only on renewables, which represent the selected population of this study.
Based on the concluded literature review which explores sustainability theories with a focus on economic sustainability and business continuity, the theoretical framework of the research was established based on human capital theory and stakeholder theory. Qualitative research methodology was adopted for conducting the study, and a semi-structured interview for data collection was designed. Interviews were conducted with twelve executives from twelve different SMEs. A thematic analysis was concluded using NVivo 14 to organise, analyse, and interpret the collected data.
Findings of the research revealed the pressing need for a more integrated and forward-thinking legislative framework in Jordan's RE sector. The research underscores the urgency of adopting inclusive, informed, and flexible legislative strategies to navigate the complexities of this evolving industry, engaging all stakeholders of the sector. The findings also comprise a multifaceted picture of the challenges facing Jordan's RE sector, offering valuable visions for strategic decision-making and policy formulation.
Themes underscore the importance of coherent government support, stakeholder balance, efficient project implementation, and enhancing public education and awareness, all of which are essential in shaping a robust and dynamic RE landscape in Jordan. In addition, it is evident that SMEs must pursue diversified revenue streams and engage in other markets in the region to ensure their business continuity. Furthermore, supportive governmental policies would be expected to aim at workforce development. The government may provide companies with incentives for investments in human capital in the RE sector. This approach may help reduce the experienced "brain drain" and provide opportunities for keeping qualified and skilled human capital in Jordan.
Recommendations for future research include a comparative study of similar challenges in other countries within the MENA region, investigation into stakeholder changing aspects to reveal the influence of power structures on policy and market trends, and exploration of current regulations and policies through engaging with policy makers and regulatory parties’ decision-makers.

Date of Award	7 Apr 2025
Original language	English
Awarding Institution	University of Northampton
Supervisor	Michael Opoku Agyeman (Director of Studies), Mehran Sepehri (Supervisor) & Ahmed El-Masry (Supervisor)