Abstract
The dynamics of urban development coupled with economic growth have contributed positively to the development of small and medium enterprises (SMEs). Optimizing the utilization and strengthening of the capacity of SMEs’ human resources will encourage increased productivity of economic enterprises and the sustainability of small and medium enterprises (SMEs). This study aims to analyze (1) strengthening the capacity of human resources (HR) of small and medium enterprises to work as a determinant of increasing the productivity of small and medium enterprises (SMEs) and labor absorption; (2) the effect of strengthening the capacity of human resources (HR), business productivity, technology utilization, and business diversification on the sustainability of small and medium enterprises (SMEs); and (3) optimizing the role of government in supporting business development, increasing productivity, business stability and sustainability of small and medium enterprises (SMEs). This study uses a sequential explanatory design approach. Data were obtained through observation, in-depth interviews, surveys, and documentation. Qualitative analysis in this study was carried out through a process of data reduction, data presentation, and conclusion drawing, while the quantitative analysis in this study uses quantitative descriptive analysis, correlation, and multiple regression. The results showed that strengthening the capacity of human resources, coupled with the use of technology, and followed by diversification of business, had a positive contribution to increasing the productivity of small and medium enterprises (SMEs). Furthermore, strengthening human resource capacity, business productivity, technology utilization, and business diversification simultaneously have a positive and significant correlation to the sustainability of small and medium enterprises (SMEs) with a determination coefficient of 72.3%. This study recommends that government policy support through strengthening human resource capacity, increasing business productivity, technology utilization, and business diversification have an impact on the sustainability of small and medium enterprises (SMEs) in Makassar City, Indonesia.
Highlights
The economic growth of big cities and metropolitan areas in developing countries is directly related to industrialization and modernization, and the coordinated development of industrialization and urbanization has become a common goal and concern for these countries [1,2]
It is assumed that the development of small and medium enterprises (SMEs) in Makassar City can be improved through strengthening the capacity of human resources and the use of technology to increase the stability of the developed economic enterprises
Several actions and strategies are needed to encourage the increased productivity of the SMEs in Makassar City, including (1) reviewing and evaluating the business processes developed by SMEs for economic diversification; (2) improving the governance and economic management of SMEs; (3) improving the expertise and skills of the workforce regarding the mastery of technology; (4) optimizing the use of business capital to make production more effective and efficient; (5) identifying consumer needs and improving the innovation and creativity of SMEs actors to allow them to reach a broader potential market; and (6) increasing business productivity and the quality of the products and their packaging to increase their competitiveness
Summary
The economic growth of big cities and metropolitan areas in developing countries is directly related to industrialization and modernization, and the coordinated development of industrialization and urbanization has become a common goal and concern for these countries [1,2]. Urban industrialization increases the productivity of small and medium enterprises (SMEs) and is the driving force for regional economic growth. People’s economic efforts, which tend to increase each year, positively contribute to employment and decrease the unemployment rate among productive-age individuals. Human resources (HR), including social capital, are the main determinants of the productivity of economic enterprises and the sustainability of resources [5]. SMEs are business activities independently developed on the initiative of the community. They are crucial for local economic development, playing a noteworthy role in job creation, poverty alleviation, and economic growth, but they encounter many funding barriers [6,7]
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