Abstract
One important element in the ASEAN Economic Community (AEC) 2025 blueprint is the strengthening of Small, Medium Enterprises (SMEs). The third largest city in Indonesia, Medan City, has a start-up Micro, Small, and Medium Enterprises (MSMEs) which ranks third in Sumatra itself. The problem is that not all MSMEs in Indonesia can survive or experience growth. So this study aims to determine the effect of entrepreneurial self-efficacy and entrepreneurial competence on entrepreneurial entry decisions and the success of start-up MSMEs in Medan City. The method of determining is the sample using a purposive sampling method, from 100 MSMEs owners. The findings of this study are that entrepreneurial self-efficacy (ESE) has a significant effect on entrepreneurial entry decisions, while entrepreneurial competence is not significant. However, the success of MSME start-ups in Medan is significantly influenced by entrepreneurial competence while ESE is not. The implication of this study is that strong confidence is needed when starting a business, and requires competence to gain business success.
Highlights
Micro, small, medium Enterprises (MSMEs) contribute greatly to the ASEAN economy.Ashariyadi (2016) explained that until mid-2016, about 96 percent of business forms in ASEAN were MSMEs with contributions to gross domestic product (GDP) of around 30 percent to 57 percent; and absorbs about 50 percent to 95 percent of the workforce
The entrepreneurial self-efficacy variable is operationalized as the characteristics of an entrepreneur who believes or is confident in his ability to face future business situations, which are perceived by the start-up MSME entrepreneurs of Medan City about 1) confidence will be able to tolerate change; 2) confidence will be able to respond to opportunities; 3) confidence will be able to produce ideas and products; 4) confidence will be able to have expertise and capabilities; and 5) confidence will be able to develop a plan
The entrepreneurial competence variable is operationalized as the characteristics of an Sitinjak entrepreneur who is competent in managing a business, which is perceived by the start-up MSMEs of Medan City regarding motives, self-concept, nature, knowledge, and expertise in 1) marketing; 2) finance; 3) human resources management (HRM); and 4) operational
Summary
Small, medium Enterprises (MSMEs) contribute greatly to the ASEAN economy. Ashariyadi (2016) explained that until mid-2016, about 96 percent of business forms in ASEAN were MSMEs with contributions to gross domestic product (GDP) of around 30 percent to 57 percent; and absorbs about 50 percent to 95 percent of the workforce. One of the important elements in the ASEAN Economic Community (AEC) blueprint 2025 is the strengthening of Small, Medium Enterprises (Ashariyadi, 2016). Nuzar, Saputro, Prayusta, Wijaya & Riswan (2018) mapped businesses in Indonesia which concluded that from 2007 to 2018, a total of 992 businesses were established and spread throughout Indonesia. Only 3.12 percent of start-up businesses go directly to the large scale, the rest (96.88 percent) start-ups are established at the scale of micro, small and medium enterprises (MSMEs)
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