Abstract
Nowadays, the development and growth of Small and Medium Industries (SMEs) have become the government’s centre of attention which leads the government's commitment, policies and programs are always continuously improved, with the aim that SMEs in Indonesia can keep developing and being competitive. SMEs play an important role in being the backbone of the national economy, and they are even able to stand up straight during unstable global economic conditions. Therefore, this research aimed to produce a Model of the Success of Thematic SMEs in the Innovation Sub district of Palu City, which was predicted to be influenced by the variables of characteristics of group ethnic entrepreneurs, marketing innovation, and the competence of counterparts. The research sample consisted of 150 business group members from 30 Thematic SMEs, analysed using structural equation modelling (PLS-SEM). The results showed that of the seven research hypothesis models, the results were acceptable with the structural model constructed, namely the characteristics of group ethnic entrepreneurs, marketing innovation and the competence of counterparts influenced significantly on the success of the Thematic SMEs businesses in Innovation Sub-districts in Palu City. The biggest influence contribution was the competence of business counterparts by 0.526, and the group ethnic entrepreneurship on the marketing innovation by 0.443.
Highlights
Today’s development and growth of Small and Medium Industries (SMEs) cannot be separated from the presence of government’s sustainable commitment, policies and programs with the aim that SMEs in Indonesia can keep developing and being highly competitive so that they can compete in the global economy
The results show that the Marketing Innovation can be defined by the variable of characteristics of group ethnic entrepreneurs and the competence of counterparts around 51%; the remaining 49% is defined by other variables in this research
According to the data analysis, it turns out that these two variables have a significant influence, so that the characteristics of group ethnic entrepreneurs such as individual character, entrepreneurial spirit, and organizational management can influence the success of SMEs in Palu City
Summary
Today’s development and growth of Small and Medium Industries (SMEs) cannot be separated from the presence of government’s sustainable commitment, policies and programs with the aim that SMEs in Indonesia can keep developing and being highly competitive so that they can compete in the global economy. SMEs themselves are the majority sector of the industrial population in Indonesia. Their activities have consistently brought about broad multiplier effects in order to promote equitable distribution of social welfare. The number of SMEs in Indonesia is 4.4 million business units, or 99% of all industrial business units in the country. The former Minister of Industry of Indonesia, Airlangga Hartanto, argued that SMEs played an important role in the national economic development, and this was due to the relatively stable growth of SMEs. In addition, the ability of SMEs to absorb labours was exceedingly high, reaching 97.22% at the beginning of 2018
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