Measuring the Organizational Innovation Capabilities (A case study of SMEs Food Industry in Surabaya-Indonesia)

Oliandes Sondakh

doi:10.7176/ikm/9-6-05

Abstract

The presence of Micro, Small and Medium Enterprises (MSMEs) is consider as one of the most important drivers of the economy in Indonesia. The existence of MSMEs can also be the backbone of the community's economy which plays an important role in growing the economy of a region. As happened in East Java Province-Indonesia. MSMEs sector contributes greatly to the economy of East Java. Therefore, the power of small and medium enterprises should not be underestimated. Innovation and development must target MSMEs. Innovation is believed to be an important thing to do in organizations because it can derived organizational success. Specific attributes of Organizational Innovation Capabilities that companies can use to build a company's competitive advantage are: Product Innovation Capabilities and Process Innovation Capabilities. The results of data analysis show that Organizational Innovation Capability is best reflected by Product Innovation Capability, followed by Process Innovation Capability. Future research on different dimension of Organizational Innovation Capability needed to get boarded overview of SMEs Organizational Innovation Capability. Keywords: Organizational Innovation Capability, Product Innovation Capability, Process Innovation Capability DOI : 10.7176/IKM/9-6-05 Publication date :June 30 th 2019

Highlights

The presence of Micro, Small and Medium Enterprises (MSMEs) is consider as one of the most important drivers of the economy in Indonesia
The results of data analysis show that Organizational Innovation Capability is best reflected by Product Innovation Capability, followed by Process Innovation Capability
The results of the respondents' answers indicate that the average food industry SME owner in Surabaya assesses the Organizational Innovation Capability owned by companies is high

Summary

Introduction

The presence of Micro, Small and Medium Enterprises (MSMEs) is consider as one of the most important drivers of the economy in Indonesia. In 2018, MSMEs in Indonesia dominate business units to 99.9% of a total of 57.89 million, with a significant contribution to employment absorption of 96.9%, GDP of 57.56% and exports of 15.68% (Yasmin, 2018). For 2019, the contribution of MSMEs sector to the national Gross Domestic Product (GDP) is projected to grow by 5%. It is expected that the total contribution of MSMEs to the GDP can reach 65% or around Rp 2,394.5 trillion. The realization of the contribution of MSMEs to the national GDP in 2018 reached around 60.34% (Syarizka, 2019)

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