Introduction: The economic developments of recent decades have turned small and large companies into the main players of industrial societies, industrialization requires agile industrial and economic governance; Traditional and complex models of governance have not only hindered economic growth, but have also led to negative social consequences such as the formation of the rentier class and the reduction of social capital. Using the industrial sociology approach, the present study designed an innovative governance model to improve the business environment in order to show how changing the nature of the government to a facilitating actor opens the knot of institutional relations.
Method: In this regard, 8 entrepreneurs of small and medium-sized enterprises in Kermanshah province were selected using purposive and snowball sampling methods until theoretical saturation was reached. The collection tool was semi-structured interviews and the data analysis method was open, axial and selective coding using MAXQDA software. The Lincoln and Guba framework was also used to ensure validity. Based on this, the researcher categorized 71 indicators and 15 components in the form of Strauss and Corbin's data base theorizing paradigm model.
Findings: These factors were organized into six main categories based on Grounded Theory: causal conditions (institutional, legislative, and regulatory reforms; development of economic, financial, and market infrastructures; operational, technological, and infrastructural empowerment); contextual conditions (cultural, social, and human context; economic, institutional, and market structure; physical, digital, and geographical infrastructures); and intervening conditions (macro-political and international environment; economic, financial, and market environment; social, cultural, and technological environment); the core phenomenon (entrepreneurial governance to improve the business environment); strategies (strategies for structural, administrative, and legislative reforms; financial, tax, and market development supports; empowerment, innovation, and infrastructure development strategies); and consequences (economic and market development consequences; institutional, transparency, and governance consequences; social, cultural, and innovation consequences).
Conclusion: Finally, this model is not only a diagnostic tool for identifying structural obstacles, but also a practical road map for policymakers to seek sustainable economic and social consequences by synergizing causal and contextual factors. At the sociological macro level, the results show that innovative governance is a fundamental mechanism for reproducing social capital and repairing the gap between the public institution and the private sector. By reducing the rent, this model prevents the weakening of the industrial middle class and by creating a platform for the permanence of the elites, it prevents the migration of manpower; Therefore, this approach is a necessary tool for managing the social consequences of industrialization and directing it towards coherence and sustainable development.