How to Improve the Performance of Micro, Small, and Medium Enterprises?

Abstract

Objective - The COVID-19 pandemic has worsened economic conditions and jeopardized the performance of many micro, small and medium enterprises (MSMEs) in Indonesia. So the question arises of how to improve its performance so that MSMEs can maintain their survival in conditions like this. This study aims to answer these problems, namely to analyze the influence of management characteristics on MSME business performance with innovation as a mediator. The population in this study is MSMEs from various types of businesses in Indonesia. Methodology/Technique - A total of 123 samples were selected by stratified judgment sampling. Data were collected through self-administered questionnaires. Finding - Data analysis using structural equation model (SEM) partial least squares (PLS) program. Novelty - Based on the analysis conducted, it can be concluded that to improve the performance of MSMEs, management characteristics need to be strengthened by efforts to create innovation, because without strengthening innovation, only having adequate management characteristics will not increase MSME performance. Type of Paper - Empirical Keywords: Characteristics; Innovation; Micro small and medium enterprises (MSMEs); Performance JEL Classification: M19