Innovation process of micro, small and medium enterprises (MSMEs) in greater Jakarta area (perspective from foodpreneurs)

Abstract

PurposeMicro, small and medium enterprises (MSMEs) are a critical part of a country or region’s economy. They have contributed to more than half of Indonesia’s gross domestic product. However, MSMEs today are still getting problems and obstacles in the Indonesian industry. One of them is the lack of knowledge about entrepreneurship that hampers the development of a business and the emergence of innovation. This study aims to understand the innovation process and extend the knowledge regarding entrepreneurship in food and beverage MSMEs in Greater Jakarta Area.Design/methodology/approachThis study is descriptive–associative research. It uses the online survey as a data collection method with a cross-sectional design. The sampling technique is purposive sampling with the criteria foodpreneurs from MSMEs in Greater Jakarta Area. The data are measured using Likert scale and analyzed using structural equation modeling-partial least squares.FindingsThe results suggest that centralized decision-making positively impacts collaboration, communication and contributes to innovation. Communication effects the entrepreneur's knowledge and collective entrepreneurship. In terms of collaboration, it affects entrepreneur's knowledge and collective entrepreneurship. Then, the entrepreneur's knowledge and collective entrepreneurship influence innovation.Research limitations/implicationsThis research is only conducted using MSMEs of food and beverages in Greater Jakarta Area as the samples. Hence the results cannot be generalized. Different sectors may have different results.Practical implicationsA centralized decision can be done but limited in certain situations only. Then, foodpreneurs should collaborate and communicate more intensely with their employees. It will impact the harmonious collaboration and collective problem-solving to achieve creative solutions.Originality/valueThere is limited research focusing on foodpreneurs and the innovation process. So, this research results can add to the existing literature review.