Local Small And Medium Enterprises Research Articles

Factors Contributing to Environmentally Friendly Business Practices in SMEs (Small and Medium Enterprises) With a Focus on Process Performance and Resources: Study of Local Culinary SMEs in North Kuin Village, South Kalimantan, Indonesia

Environmentally friendly business practices (PBR) are often overlooked by small and medium enterprises (SMEs), even though they are proven to provide competitive advantages, reduce risks, encourage environmental sustainability, and increase organizational efficiency. This research analyzes the factors that influence PBR in local culinary SMEs, with a focus on process performance (PP) and SME resources. This research uses a quantitative approach with structural equation modeling (SEM) to analyze the influence of process performance (PP) and SME resources (fundamental resources (FR), upgrading capability (UC), and dynamic capabilities (DC)) on PBR in local culinary SMEs in North Kuin Village, South Kalimantan. The research results show that only fundamental resources (FR) and improvement capabilities (UC) influence PBR in local culinary SMEs. SMEs with access to resources and the ability to increase capacity have more potential to implement PBR.

TRANSFORMASI INOVASI MODEL BISNIS PADA UMKM BATIK PASCA PANDEMI COVID 19

The pandemic phenomenon had a significant impact on small and medium-sized enterprises, compelling them to respond to the situation. Business Model Innovation (BMI) represents an innovation model suitable for the sustainability of small and medium-sized enterprises, particularly as the local SME situation deteriorated during the first two years of the COVID-19 pandemic, specifically in 2020-2021. The reconfiguration of business models has emerged as one of the alternatives for SMEs to overcome these challenges. The business model concept enables Small and Medium Enterprises (SMEs) to tackle dynamic business challenges. In reality, the alteration of Business Models (BMs) in SMEs varies across different organizations. This research aims to provide insights into the changes in BMs for SMEs following the pandemic, specifically within the batik industry, through the Integrated Marketing Communications (IMC) approach applied to various case studies. The method used in this research is descriptive qualitative through case studies with case selection using a purposive sampling approach, which is the MSME of the Batik Industry. The results of this study offer empirical information about the Business Model Innovation (BMI) of SMEs during the pandemic, which can serve as a foundation for further research in BMI, particularly concerning SMEs. 
 Keywords: Business Model Innovation; SMEs; Batik; Pandemic

Enhancing the Capacity of Certified SMEs Facilitators for the Internationalization of Aceh's Micro, Small, and Medium Enterprises

This community services aims to enhance the capabilities of certified SMEs facilitators from the Faculty of Economics and Business, Syiah Kuala University to internationalizing Aceh's Micro, Small, and Medium Enterprises (SMEs) through participation in the 19th Malaysia International Halal Showcase (MIHAS) 2023. That is not merely a journey to MIHAS; it is a strategic investment in building the competencies of facilitators who, in turn, become ambassadors of knowledge, aiding local SMEs enterprises in embracing internationalization with confidence and competence. Results showcase strengthened international networks and market reach, emphasizing the impactful role of university-community collaborations.

The Extension of the UTAUT2 Model: A Case Study of Indonesian SMEs Acceptance of Social Commerce

An entirely updated e-commerce platform referred to as Social Commerce was developed in response to the rise in social media use. Social commerce integrates interactions between buyers and sellers made possible by social media platforms and Web 2.0 technology. It is frequently seen as a subfield of e-commerce. Social commerce has been successfully introduced in developing countries. Many businesses around the world are small and medium enterprises (SMEs). For instance, SMEs in Indonesia can contribute up to 60.34% of the country's GDP and have a substantial labor pool. Using social commerce as an e-commerce platform can significantly improve the operational efficiency of small and medium-sized enterprises (SMEs). However, little empirical research has specifically examined how SMEs embrace social commerce. Given the high level of concern, further research is required. Therefore, the current study experimentally examined how local SMEs in rural Indonesia introduced social commerce. The study was modeled using the Unified Theory of Technology Acceptance and Use (UTAUT) 2 model and several previous studies. SmartPLS 4 software was used to model and evaluate data using partial least squares structural equation modeling (PLS-SEM). The findings of the 114 samples showed that relative advantage, social support, facilitation conditions, and the government's support of social commerce influenced behavioral intention to use social commerce. Behavioral intention to use social commerce influences the actual use of social commerce. The findings of this study can help local governments and policymakers develop social trade promotion regulations to help potential SMEs and entrepreneurs gain long-term business support.

The Extension of the UTAUT2 Model: A Case Study of Indonesian SMEs Acceptance of Social Commerce

An entirely updated e-commerce platform referred to as Social Commerce was developed in response to the rise in social media use. Social commerce integrates interactions between buyers and sellers made possible by social media platforms and Web 2.0 technology. It is frequently seen as a subfield of e-commerce. Social commerce has been successfully introduced in developing countries. Many businesses around the world are small and medium enterprises (SMEs). For instance, SMEs in Indonesia can contribute up to 60.34% of the country's GDP and have a substantial labor pool. Using social commerce as an e-commerce platform can significantly improve the operational efficiency of small and medium-sized enterprises (SMEs). However, little empirical research has specifically examined how SMEs embrace social commerce. Given the high level of concern, further research is required. Therefore, the current study experimentally examined how local SMEs in rural Indonesia introduced social commerce. The study was modeled using the Unified Theory of Technology Acceptance and Use (UTAUT) 2 model and several previous studies. SmartPLS 4 software was used to model and evaluate data using partial least squares structural equation modeling (PLS-SEM). The findings of the 114 samples showed that relative advantage, social support, facilitation conditions, and the government's support of social commerce influenced behavioral intention to use social commerce. Behavioral intention to use social commerce influences the actual use of social commerce. The findings of this study can help local governments and policymakers develop social trade promotion regulations to help potential SMEs and entrepreneurs gain long-term business support.

Crisis Management for Small and Medium Enterprises (SMEs) in Sweden under COVID 19 Pandemic: Business Model Innovation, Crisis Leadership and Digital Technology Tools

As we all know, the global crisis of the Covid 19 pandemic has brought about a disaster to the whole economy; it hits the SMEs heavily due to their frangibility. However, they have their unique flexibility to adapt the strategies quickly in the three critical factors of business model innovation, crisis leadership and digital technology tools to cope with the crisis. This paper provides a mixed method of quantitative and qualitative analysis of the SMEs in Sweden. We collect data by questionnaire and interview five (5) local SMEs. The results show that SMEs were affected by Covid 19 significantly, while the strategies that they took were also efficient and useful to their survival and improvement. The SMEs' strategies or changes adopted can give some light to the other SMEs who are still struggling in the pandemic or similar crisis later on. Firstly, all participants adopted a new business model whatever in their customers or suppliers or distributions. Secondly, the leaders became used to the virtual work with their team members; they motivated their employees with efficient rewards and adjusted the labour cost. Thirdly, the companies also took advantage of efficient digital technology tools quickly to adapt their work to the virtual environment. Finally, this study also contributes to current literature, using the essential factors to analysis from a theoretical perspective.

Training in Logistics Management and Social Media Marketing for Small, Micro and Medium Enterprises in Bekasi Regency

Background: The community service held in Cikarang district was to develop local small and medium enterprises (SMEs) in Cikarang District and to develop ambidextrous skills in social media literacy and logistic management. The recent disruption called the COVID-19 pandemic swallowed all business in Indonesia. Many small businesses have to survive in the post-pandemic era. Conventional transactions are no longer viable in the new 4.0 industry. Contribution: Training is necessary to improve the small and medium enterprises adopting the new industry revolution. Social media and logistics are two types of skills that are crucial for all SMEs if they want to survive with the current system. We provide the integration in understanding the logistics and social media as both production and marketing tools. Method: Based on the short survey, this workshop is very important to help local SMEs. We provide the participant with material, in-house training, and more in the workshop. We also provide a WhatsApp group for free consultation for further questions like permits, logistic analysis, and SME events. Results: Based on the feedback and the participant's responses in the workshop, They hope to have another training to develop their business into a more efficient and agile business for competition. Conclusion: Logistics and social media prowess are the two most important skills SMEs need to improve their business locally before going into a bigger pond.

SMEs’ intangible resources and their effects on export performance: a study on Malaysian halal F&B sector

Purpose The growing demand for halal products has attracted small and large companies looking to secure their market share in the lucrative global halal market. However, it is difficult for resource-constrained firms, such as small and medium enterprises (SMEs), to compete internationally. Therefore, drawing from a resource-based view, this paper aims to examine how intangible resources affect the export performance of Malaysian SMEs exporting halal food and beverages (F&B) products. Design/methodology/approach This study used a purposive sampling technique, and respondents were reached out by mail. Out of 517 local SMEs exporting halal-certified F&Bs contacted, 193 firms responded, and only 188 responses were eligible to be used for data analysis. The partial least squares structural equation modelling technique was used to conduct the analysis. The data underwent measurement and structural model evaluation to confirm the hypotheses postulated. Findings Based on the data analysis conducted, it was discovered that intangible resources, namely, international orientation and marketing capability, significantly influence the export performance of Malaysian SMEs exporting halal F&B. However, the influence of cultural intelligence on export performance could not be demonstrated. Originality/value This paper fills the gap of the need for more attention to SMEs in developing countries, especially in the halal industry. This research paper also contributes to international business and halal studies by promoting an understanding of intangible resources as strategic resources for SMEs to create competitive advantages and elevate their export performance in the emerging global halal market.

Clusters under pressure: the impact of a crisis in Italian industrial districts

ABSTRACT This paper analyses the relationship between increased competition and cluster resources – that is, horizontal cooperation, supporting organizations, and knowledge transfer – during the 2008–2010s economic crisis, and we discuss the impact of the crisis on small and medium enterprises (SMEs). The empirical study is based on a survey with entrepreneurs within two Italian clusters: Arzignano (tannery) and Riviera del Brenta (high-quality footwear and accessories). Our results show that competition impacts the clusters’ competitive resources. We consider that support institutions act as a local resource but also as a local actor, which means that having a positive impact on them depends on the actions they develop to overcome a crisis. Thus, for local SMEs, territory is a source of competitive advantage, even when the cluster is under pressure. This paper provides two major contributions. First, we show that when cluster resources are affected by an external shock, a positive result might emerge. Second, from a managerial point of view, we show that institutions are important in supporting the cluster in times of crisis, and these institutions may be able to implement concrete actions to help local SMEs promote their products.

Longer-term impacts of COVID-19 on SMEs: follow-up research in Sichuan Province, China

ABSTRACT Small and medium enterprises (SMEs) are continuing to be impacted by the COVID-19 pandemic as it moves into its third year. The ‘dynamic COVID-zero’ policy adopted in China from August 2021 to the end of 2022 has inevitably put pressure on local SMEs, which makes the situation in Chinese SMEs not only different from the situation during the initial outbreak, but also unique in the world. In July 2022, an online follow-up questionnaire was conducted on SMEs in Sichuan Province to assess their performances, pressures, and requirements in this particular period of time and compare the results with our findings from 2020 to reveal the longer-term impacts of COVID-19. It was found that: (1) most SMEs had poorer revenue and profit performances; (2) while the pressure of increasing production cost and declining market demand has increased significantly, normal productions and operations are no longer as strongly disturbed; (3) SMEs require more financial support but less operating and employment subsidies; (4) and the SMEs’ overall confidence has recovered and the willingness to invest is rising. The situation in different sectors was also analysed and compared, with the results revealing problems within the tertiary industrial sector (wholesale and retail businesses).

Mediating Effect of Sustainable Manufacturing Practices between Green Innovation Capability and Sustainability Performance among Malaysian Manufacturing SMEs

The level of innovative activities in Malaysia is still low compared to that of other nations, which is attributed to the scarcity of green innovation capability (GIC) and the minimal acquisition of new technological knowledge. Studies revealed that Malaysian manufacturing small and medium enterprises (SMEs) encounter the challenges of operation and supply chain disruption and tight cash flows. These firms would not want to venture into green equipment and eco technologies if there is no certainty of promising returns. Overall, studies on sustainable management systems in the Malaysian manufacturing SMEs have revealed that firms are still in the early stages of implementation, such that sustainable manufacturing practices (SMPs) are predominantly production- and process-oriented, neglecting the importance of the product life cycle and sustainable end-of-life management. The aim of this paper is: (1) To examine the effect of GIC on firm sustainability performance (SP) and (2) To investigate the mediating effect of SMPs on relationship between GIC and firm SP. Smart PLS 3.0 was applied to analyze the data collected among 150 ISO 14001 certified local SMEs manufacturers. The study demonstrated the non-significant result between GIC and SP; while SMPs mediated the relationship between GIC and SP. This study enriches the Dynamic Capability View (DCV) by extending the sustainability model to better explain the sustainable development process in the context of Malaysian manufacturing SMEs. This article does not just inform firms on the importance of SMPs for performance but also guides firm managers towards understanding and improving their current SMPs. These results also help Malaysian policy makers in providing appropriate assistance to improve current firm operations, and subsequently, sustainability-related outcomes. Following this, various kinds of assistance (e.g., strategic planning, governance, facility, financing, and technology) can be provided to support SMEs manufacturers.

Factors influencing poverty reduction in the mining sector in Zambia: A case of selected mines

The study focuses on how to reduce poverty by facilitating the inclusion of Zambian SMEs in the miningindustry and link them to global value chains. In the past 15 years, Zambia has adopted a series ofNational Development Plans aiming at the support of small and medium enterprises (SMEs). Despitethese plans, poverty levels are still high to over 60%. The main research question was what the barriersare that hold back local SMEs to join the Zambian mining chains and how to overcome them. The studyadopted an embedded multiple case study approach that included Lumwana, Konkola and Kansanshimines and the SMEs in the proximity of these mines. Primary data was collected through a surveyinvolving 150 members of the Mining Suppliers and Contractors Association of Zambia, and 35 indepth interviews with immediate stakeholders in the three selected mines, government authorities,NGOs, and experts. Data processing involved use of EQS for a structural equation modeling and selfadministered questionnaire for qualitative data. Data analysis framework focused on RMSEA values,FIT indices, and multiple regression analysis for quantitative data while theory construction involvedcoding the indicators that measure variables into themes, categories and subcategories which wereexpanded with detailed explanations, and thereafter summaries and conclusions. The conclusion of the study was that despite public and private support, SMEs continue to be excluded from supplying to the mine. The study recommends the formation of Zambia National content development and monitoring board for managing local content policies for inclusive growth, formation of Mining incubator to support SMEs upgrade to reach international requirements, formation of the mining commission of Zambia to implement mining policy, and form the supplier development working group to implement the private and public policies to improve capacity of SMEs to supply to the mines

Effects of multilevel policy mix of public R&D subsidies: Empirical evidence from Japanese local SMEs

Abstract Regional innovation policies have been implemented in several countries. In Japan, controlled decentralization of traditionally centralized innovation policy is ongoing, so that we can observe multilevel policy mix of public R&D (research and development) subsidies by national, prefecture, and city governments. However, empirical studies on multilevel R&D support using panel data and considering municipality level have been scarce. Based on original survey data and financial data of manufacturing small and medium enterprises (SMEs), we estimate their total factor productivity (TFP) and empirically investigate the effects of public R&D subsidies by national, prefecture, and city governments. We employ firm-level fixed-effect panel estimation in order to control for the effects of any unobservable time-invariant factors. We find that multilevel subsidies (especially those involving city subsidies) complementarily and persistently increase recipients’ TFP. These results suggest significant advantages of multilevel policy mix, especially those involving city subsidies.

An Operational Framework Model for Geospatial Business Impact Analysis in West Coast of Sabah, Malaysia

Population expansion and rapid urbanisation rate coupled with extreme changes of weather conditions have triggered more frequent disaster occurrences resulting in bigger economic and commercial losses. Like many other economic sectors that contributed significantly towards local socio-economic development, the small and medium enterprises (SMEs) also were not spared from being affected and/or disrupted by disaster events. In 2020, SMEs in Malaysia represented 98.5% of local business establishments and contributed approximately 41% to the country’s GDP. Although Malaysia can be considered a relatively safe and stable country from a political and socio-economic tussle, as a country with tropical climate, Malaysia, is highly vulnerable to the risk of flooding, landslide and mudslide which jeopardise the sustainability of local SMEs in the long run. Unfortunately, until today, there is no locallydriven comprehensive framework for promoting SMEs resiliency that has been developed particularly in disaster-prone areas. In this light, advanced geospatial technology that has been widely used in mapping for various purposes can be utilized or integrated into mapping of disaster risk profiles and providing significant inputs for establishing Business Continuity Planning (BCP) for disaster-prone areas. Using business impact analysis (BIA) approach, this study explains the operational framework model for business continuity and recovery. The case study of local SMEs in West Coast Sabah, Malaysia was adopted to explain the impacts of the 2015 earthquake and its cascading geohazards to local SMEs including severe disruptions to the main lifeline facilities e.g. telecommunication, electricity and transportation. The research design is based on the qualitative and quantitative methods including guided interviews with the affected local SMEs groups. The proposed operational framework is a result of integrated smart geospatial solutions for advancing business continuity and resiliency for SMEs in disasterprone areas.

Adopting open innovation for SMEs and industrial revolution 4.0

PurposeIndustrial Revolution 4.0 is still evolving. The purpose of this paper is to assess the progress of Indonesia in achieving an initiative for Industry 4.0. As the largest country in Southeast Asia, Indonesia plays a critical role in implementing Industry 4.0. In addition, this study proposes an open innovation strategies for small and medium enterprises (SMEs) in facing Industry 4.0, especially in the Indonesian setting. Open innovation is viewed as a long-term innovation model that relies on cross-border commerce between businesses and countries.Design/methodology/approachThis study undertakes a comprehensive literature review to capture the necessary insights for establishing an early grasp of solution design. A total of 32 sample papers were qualified using a set of selection criteria designed to find the most relevant existing studies in the Industry 4.0 and Indonesia domains. The meta-details as significant discoveries were processed using a content analysis approach. In addition, the research deployed sentiment analysis from text mining to inter-operate and classify (positive, negative and neutral) in-text data using text analysis techniques to identify public sentiment toward Industry 4.0 in Indonesia.FindingsThe key finding is that there is a favorable relationship between digital ecosystem readiness and open innovation adoption for SMEs. While, knowledge management is a critical factor in guiding a country’s successful implementation of the open innovation paradigm. Furthermore, some of the major findings revealed that many initiatives for Industry 4.0 are carried out by the private sectors. In regards to the procedure, the role of government is the protection of market regulations. This could be due to preserving fair competition between corporations and SMEs. Local businesses and SMEs should be protected to ensure their survival. In addition, the major cause of the slow adoption of Industry 4.0 in Indonesia is the lack of digital equipment. This is because of the shortage of digital equipment that can create a digital divide between large and small businesses and between industries in the urban and rural areas.Research limitations/implicationsThis study discussed some of the most essential issues of SMEs in adopting open innovation that is required for Industrial Revolution 4.0. It focuses on how digital ecosystem’s readiness influences open innovation adoption for SMEs in Indonesia. By understanding its current state of readiness, it contributes to the policymakers in deciding how and where to adopt open innovation and develop digital ecosystem and identify which ones might best meet their needs for any developing countries.Originality/valueThis paper is useful to academics, practitioners and policymakers in the fields of technology and public policy. The research provides some initial insights into Indonesia and any developing countries on Industry Revolution 4.0 and the needs for SMEs in adopting open innovation.

IMPROVING MATERIAL SHORTAGE FOR SMALL-MEDIUM ENTERPRISES (SME) IN PEST CONTROL INDUSTRY

Abstract: Micro, Small, and Medium Enterprises (SME) are the main pillars of the Indonesian economy because they have a strong foundation in driving the wheels of the national economy. Inventory is an essential factor in SME production costs to boost competitive advantage. Conventionally, Local SMEs in the pest control industry do not yet have a method or system of inventory control for pest control raw materials. This study tries to conduct in-depth research of local SMEs in the pest control industry to minimize the shortage of raw materials. An observation of this study found out that material shortage in local SME could happen every month that caused stop supply to customers. The objective of this paper proposes an appropriate and efficient stock of pest control material to improve the shortage problem. For achieving the research objective, the approach used a case study on Nuvaq material inventory in an SME in Jakarta, Indonesia.. The forecasting technique with minimal error is the Linear Regression method giving results with the smallest forecast errors. It can be seen from the smallest MAD, MAPE, SEE, and MSE. The economic order quantity is 100 Liter Nuvaq Material, reorder points can be made when the supply is 36 Liters, and safety stock for Nuvaq raw materials is 16 liters.

Barriers of public policy faced by SMEs of creative economy in Indonesia

PurposeThe purpose of this paper is to analyze the barriers in public policy faced by the small and medium enterprises (SMEs) in a creative economy at the local level.Design/methodology/approachThis research uses a qualitative case study method, and the informants are selected with a purposive sampling technique. The researchers collected data through in-depth interviews of 15 informants. The informants include local government officials, SME actors and creative economy activists. Data are analyzed using thematic analysis in the qualitative method.FindingsThis study shows that the development of SMEs in the creative economy is constrained by the mindset and administrative behavior of the local policymakers who tend to be normative, routine-minded and inflexible. Consequently, the local government’s administrative capacity in the creative economy sector has not demonstrated significant support for efforts to increase the competitiveness of creative economies at the regional level.Research limitations/implicationsResearch implications suggest how the findings may be important for the policy and practice of SMEs’ development of a creative economy at the local level. The findings suggest that local government needs to engage with the actors and activists of SMEs in the strategic formulation for the development of a creative economy.Originality/valueThis study extends the theoretical and practical knowledge about policy implementation of SMEs’ development by a local government in the creative economy sector in Indonesia.

Automatization for Product Quality as a SME Strategy to Compete Globally

Businesses need to constantly maintain high quality in their products, and more importantly to remain competitive even at a global level, which is the current market pressure and need for many SME in countries underdevelopment, where more global enterprises have arrived leaving local businesses to the extreme of perishing. Therefore, already employed strategies in global companies to improve their product quality are essential to be reconsidered and to be implemented by local plants. Automation had become a highly important strategy in the manufacturing industry to satisfy customers and stand out from their competitors, more because today customers increasingly demand sustainable and higher quality products. The aim of this research was to validate the level of automatization and its effect onto product quality, in local, small, and medium enterprises (SME). A survey with two constructs was applied to manufacturing SME in the Aguascalientes region, Mexico. The data was analysed using SPSS-26 software. The regression analyses demonstrated that automation had a significant and positive effect on product quality in local SME, however, automatization is not recognized as a priority strategy leaving SME behind global competitive businesses in terms of product quality. Keywords: Quality, Strategies, Management, SME, Manufacturing.

The diamond model: A French luxury cluster model embedded in regional heritage

ABSTRACT This article accounts for how luxury clusters potentially enable positive value flows for their regions, local handcraft small and medium enterprises (SMEs), and global customers. Based on this framework, luxury clusters are viewed as a distinct type of growth pole, with respect to the value flows taking place between their distinct offer, their operational systems, their economic model, the stakeholders’ capital exchanges, and their potential fundamental social and environmental values. A comparative case study of two French luxury clusters, for brandies in Cognac and for leather in Périgord-Limousin, Nouvelle-Aquitaine, is used to examine differing value flows in each luxury cluster. This study also proposes an overall framework, based on the local handcraft SMEs’ and institutional actors’ perceptions, for observing how value flows ideally interact in a French luxury context. It could ultimately contribute to the monitoring of further luxury clusters.

Local Content Policies in the Mining Sector in Zambia: A Synthesis of Its Benefits

There has been lots of questions as to why there is continued marginalization of small and medium enterprises (SMEs) in the mines despite local content policies. A recent report regarding estimates of input goods and services to the mines in Zambia show an accumulation requirement of US$5 billion annually and the share of domestic firms in the mining market is less than 4 per cent, while that of indigenous firms is about 1 per cent. This raises lots of questions as to what extent local content help SMEs to supply to the mines. Local content policies are legal requirements to empower local SMEs so that a share of factors of production in form of labour, supplies of goods and technology required at various stages of the value chain is sourced from the domestic economy. A survey of 350 SMEs answered a questionnaire to determine how local content policies help them to supply to the mines. It was found out that the local content only helped SMEs to improve their skills and capacity and not to help them supply to the mines or employment of the local people. The study recommends that a mining commission of Zambia be formed with executive powers to enhance the inclusion of local SMEs to the mines. Further, a local content committee and economic empowerment must be institutionalized to improve the position of SMEs and enhance economic empowerment respectively Keywords: Local content, global value chain, small and medium enterprises DOI : 10.7176/EJBM/11-33-05 Publication date: November 30 th 2019