The Effect of Business Knowledge, Business Skill, Self Confidence and Innovation on Business Performance of Small and Medium Industry in the City of Bukittinggi

Abstract

Small and Medium Industry (IKM) in economic development in Indonesia is a sector that plays an important role. This sector supports the family economy because most of Indonesian can only access low level of education and operate small business activities. This condition illustrates that the performance of Small and Medium Enterprises has a very important role in improving the country’s economy. This study aims to identify the effect of Business Knowledge, Business Skills, Confidence and Innovation on the Performance of Small and Medium Industrial Business (IKM) in the City of Bukittinggi. The type of research is associative research (relationship) with quantitative analysis methods (data in the form of numbers) using SEM (Structural Equation Modeling) data analysis techniques based on Smart PLS variance. The results of this study indicate innovation, business skill, business knowledge and self confidence have positive effect on business performance of small medium industry in Bukittinggi. The Business knowledge has greater value among other variables which means more effort, guidance, facility should be emphasized on Small Medium Industry by the local authority and related parties to allow them to be able to be more competitive and sustainable. This study also recommends better progam and support to improve the self confidence of small medium industry’s owner.