Compassionate Design As A Competitive Advantage for the Sustainability o f Indonesian MSMEs

Abstract

Indonesian Micro Small Medium Enterprises (MSMEs) is a major contributor to the socio-economic development that faces challenges with its sustainability in the current and future market. As a majority of total enterprises in Indonesia, MSMEs has contributed significantly to interconnecting local community empowerment with local economic and business development, resulting in various outcomes for both the business and the community. This research demonstrates that there are still gaps in our knowledge concerning the interaction of creative processes in daily MSMEs business, and in understanding how MSMEs’ creative production can be harnessed to add value and grow their potential for increasing competitive advantage alongside benefits to social welfare. This paper argues that a new approach is needed to support the sustainability of Indonesian MSMEs during the design development process, one that supports and facilitates innovative practice.The study explores how principles in creative process and social life found to be essential to innovation in MSME sector could be integrated within the MSME production cycle holistically using a newly proposed Compassionate Design approach. The new model serves as an overarching framework for establishing and fostering dynamic collaboration among key stakeholder groups and offers a holistic integrated approach of new model be engaged in future direction of local businesses and market opportunities.