Medium Enterprises In Indonesia Research Articles

Analysis of the Impact of Government Policy, Technological Innovation, and Availability of Business Capital on the Growth of Small and Medium Enterprises in Indonesia

This research studies the complex relationships between government policies, technological innovation, availability of venture capital, and the growth of Small and Medium Enterprises (SMEs) in Indonesia. Using Structural Equation Modeling with Partial Least Squares (SEM-PLS), this research analyses data from a sample of 130 SMEs across different industries and regions. The measurement model assessment confirmed the reliability and validity of the constructs, while the structural model analysis revealed significant positive relationships between government policy effectiveness, technological innovation, venture capital availability, and SME growth. The robustness of the findings was confirmed through bootstrapping, and the model fit index validated the adequacy of the estimated model. The R-squared values indicate the ability of the model to explain most of the variance in SME growth. Hypothesis testing further corroborated the significant impact of Availability of Venture Capital, Government Policies, and Technological Innovation on SME growth. The implications of these findings extend to policymakers, business owners, and stakeholders, guiding the formulation of strategies that foster an enabling environment for SMEs in Indonesia.

The Influence of Business Intelligence to Maintain Customer Relationships in Small and Medium Enterprises in Indonesia

The adoption of Business intelligence (BI) has become increasingly prominent among organizations for attracting customers and gaining a competitive edge. This becomes even more important for small and medium enterprises (SMEs) which face immense pressure to retain existing customers and attract more customers for survival. This study presents a systematic literature review of studies investigating the impact of BI on customer relations with exclusive focus on Indonesia, which has a growing number of SMEs (also called ‘UMKMs’). By examining 15 papers published between 2013 to 2024, the findings of the study highlight that BI contributes to building better connections with customers and making them feel more engaged and satisfied. This study provides valuable insights for SMEs in Indonesia to adopt BI to attract more customers. The findings of the study also lay the foundation for future research, especially those wanting to perform an empirical investigation.

LITERATUR REVIEW : IMPLEMENTATION OF TARGET COSTING IN MSMEs

The process of determining the highest costs that can be incurred during the manufacture of a new product is known as target costing. Within the constraints of a given maximum cost, a profitable prototype is then designed. Target costing is a method that is suitable for use by Micro, Small and Medium Enterprises in Indonesia to increase profits. The research method uses a literature review using 32 relevant articles. Of the 32 articles, several articles stated that the company had implemented predetermined costing targets. One of the articles that has implemented target costing is Gunung Seulawah MSMEs in the food sector, which shows that the company can optimize profits well and achieve profits of more than 25% compared to other MSMEs. Many studies have helped implement target costing in several MSMEs from various different sectors, which it is hoped will help the community to implement it so that it can increase profits to help the progress of MSMEs.

Contibution of Sharia fintech to micro, small, and medium enterprises’ inclusivity in Kisaran City

IntroductionChallenges in access to inclusive financial services are still a major issue for many micro, small and medium enterprises in Indonesia, including in Kisaran City. However, research that specifically discusses this is still rarely carried out.ObjectivesThis research aims to analyze the role of sharia fintech in increasing the inclusiveness of micro, small and medium enterprises in Kisaran City.MethodThis research uses qualitative approach with primary data is obtained by interviewing three MSMEs owners using Sharia fintech. Secondary data is collected from books, the internet, academic journals, archives, and official records.ResultsThe results of this research show an increase in the use of Sharia Fintech by micro, small and medium enterprises in Kisaran City in 2020-2023. Apart from that, the use of Sharia fintech has a positive influence in increasing financial inclusiveness and encouraging the growth of micro, small and medium enterprises in Kisaran City..ImplicationsMicro, small and medium enterprises can use financial services from sharia fintech to increase access to funding and to expand customer payment models. Policy makers can continue to increase the role of sharia fintech for inclusiveness of micro, small and medium enterprises through more certain regulations and also increasing public education.Originality/NoveltyThis study contributes to enrich studies in the field of financial inclusion for micro, small, and medium enterprises with emphasize on the use of fintech.

Understanding Factors That Affect Social Media Advertisement Adoption for Small Medium Enterprises in Indonesia the Case of Facebook Advertisement

Advancement of technology in the field of marketing has been one significant factor in assisting Small Medium Enterprises (SMEs) to increase their competitiveness. Meta, as a technological company, provide Facebook advertisement as a mean of digital social media advertising. One of the challenges that Meta faced is to attract more Facebook ads adoption especially in the Small Medium Enterprise sector. This research objective is to understand the factors that affect social media advertisement adoption, in this case Facebook advertisement, for small medium enterprises in Indonesia. There are eight variables that are believed to influence customer intention to adopt Facebook advertisement which are performance expectancy, effort expectancy, social influence, facilitating condition, hedonic motivation, price value, perceived technology security and self-efficacy. The main data was collected by an online survey and 350 SMEs participated in it. The respondents are SMEs that operate in Indonesia and either have not use Facebook advertisement service or do not use the service anymore. The sample was gathered using non-probability convenience sampling and the data was analysed using structural equation model technique. The research found that Self-efficacy is the highest influencing variable that are statistically significant to influence SMEs intention to adopt Facebook advertisement. Effort expectancy and social influence are found to be statistically significant to influence SMEs intention to adopt Facebook advertisement. Hedonic motivation and price value factor are found to be statistically significant to influence intention to adopt Facebook ads for SMEs that have use the service but choose not to use it anymore. In the contrary, the factor of performance expectancy, facilitating condition and perceived technology security are found to be not statistically significant to influence intention to adopt Facebook ads among Indonesia SMEs. The research suggests Meta to prioritize an effort to increase SMEs self-efficacy in using Facebook advertisement by giving free training and certification. Other suggestions are to partner with relevant key opinion leaders (KOL)/communities, creating engagement with SMEs through events and giving monetary incentives such as discount coupons. For future research, researcher suggest different/smaller respondent demography and/or different social media advertising platform. Research with respondent that are actively using Facebook advertising service could also give additional insight to the study.

Intention to Use Islamic Fintech among MSMEs: Knowledge of Sharia Prohibition Approach

The purpose of this study is to investigate the influential factors on behavioral intentions toward Islamic fintech use among Micro, Small and Medium Enterprises in Indonesia. The author adds a new research model about intention to use in the form of Technology Acceptance Model, Knowledge of Sharia Prohibition, Word of Mouth and Trust which has not been used in other studies. This research utilized a quantitative approach, an online survey was distributed to 350 MSMEs owners. The data collected from the participants were subjected to Structural Equations Modeling-Partial Least Squares (SEM-PLS) analysis, enabling a thorough examination of the variables under investigation. The results show that the variable of word of mouth and perceived ease of use have positive and significant impact on perceived usefulness. In addition, the variable of trust and perceived usefulness influence attitude significantly. This study also indicates that attitude affects intention to use Islamic fintech significantly. Then, the Attitude mediates the relationship between perceived usefulness and trust and Intention to use Islamic fintech. The findings of this study will be useful for policy makers and managers of Islamic fintech companies because it can help them find out the factors that drive intention to use Islamic fintech services.

Strategi Komunikasi DISKOMINFOTIK dalam Menyukseskan Acara UMKM Rameune Nagan Raya Expo 2023

The development of micro, small and medium enterprises is one of the state opinions that the government really pays attention to because it is proven by the government's serious attention in developing micro, small and medium enterprises in Indonesia. Naga Raya is a district in Aceh Province, Indonesia with the capital being Suka Makmue. Nagan Raya Regency Diskominfotik is one of the parties that takes part in managing the event and provides information about events that will take place as a form of implementing the work program. This research was studied based on the concept of communication strategy according to Porter (in Nila, 2014), namely planning, implementation and evaluation. This research method is descriptive qualitative. The results of this research, namely Diskominfotik, target information targets for the 2023 Rameune Nagan Raya Expo event, namely MSME actors, entrepreneurs and the general public. Dissemination of information about the 2023 MSME RNRE event by Diskominfotik, namely through news on the website, Instagram and Tiktok. In developing this message, Diskominfotik collaborated with the Instagram accounts @loennagan and @pemkabnara, tiktok @loennagan as well as local media websites, namely Antara Foto, Serambinews, Rakyat Welfare, National Elasi, Indo Satu, Aceh Express, Editorial and Nagan Raya Regency Government.

Performance of Small and Medium Enterprises in Indonesia Impacted by Financial Accessibility

The goals of this study are to examine and analyze the financial accessibility of SMEs in Indonesia, to examine the impact of financial constraints on SMEs’ performance there, and to determine how SMEs’ performance in Indonesia is impacted by their involvement in the financial market. This analysis makes use of panel data from the 2009 and 2015 waves of the World Bank Enterprise Survey (ESWB). Quantitative analysis with panel data regression models utilizing the Fixed Effect Model (FEM) or Random Effect Model (REM) and Hausman test constitute the analytical framework for this study. Stata Software is used for all computations and estimation related to the model and its tests. The results show that financial accessibility has a greater influence on sales growth compared to labor growth in medium-sized businesses, while in small businesses financial accessibility has a smaller effect on sales growth compared to labor growth. The number of small companies that are not financially constrained is more than the number of companies participating in the financial market. And participation in the financial market has an influence on business performance, both in terms of sales growth and workforce growth.

The role of resistance to change in determining organizational citizenship behavior: Evidence from MSMEs in Indonesia

Organizational citizenship behavior is vital to the company’s internal control system. This is because individual contributions that exceed role demands in the workplace increase company productivity and efficiency. This study aims to determine the role of resistance to change in moderating the influence of psychological capital and leader-member exchange on organizational citizenship behavior in micro, small, and medium enterprises in Indonesia. This paper uses a quantitative approach, and data collection is carried out through online surveys. The sample comprises 263 managers or owners of micro, small, and medium enterprises in Indonesia. This paper uses panel data; to test the interaction regression of resistance to change as a moderator, it uses the ordinary least squares method. The research results found empirical evidence that psychological capital and leader-member exchange impact increasing organizational citizenship behavior. Other findings show that resistance to change negatively moderates the influence of psychological capital and leader-member exchange on organizational citizenship behavior of Indonesia’s micro, small, and medium enterprises. AcknowledgmentThis study is supported by DPPMP Stikubank University; thanks to DPPMP and all team NGEJUS members.

Antecedents of green manufacturing implementation by local MSMEs in Indonesia

This study aims to investigate the adoption of green manufacturing in the micro, small, and medium enterprises in Indonesia using the integrated framework. The paper used purposive sampling to select 258 micro, small, and medium enterprises in Indonesia that adopt green production processes to determine the supporting and inhibiting factors experienced in green manufacturing. Structural equation modeling with SmartPLS 3.0 application is used for data processing. The results show that the internal factors (organizational capabilities, internal competencies development, relative advantage, and organizational resources) affect green manufacturing implementation. This indicates that micro, small, and medium enterprises in Indonesia tend to adopt green manufacturing when they have organizational capabilities, internal competencies development, relative advantage, and organizational resources that support this practice. External factors that influence green manufacturing practices are government support. Indonesian micro, small, and medium enterprises consider that government support in the form of subsidies or regulations related to green practices will make it easier to adopt green manufacturing. AcknowledgmentThis study is funded by the Ministry of Education, Culture, Research and Technology of the Republic of Indonesia (Kementerian Pendidikan, Kebudayaan, Riset dan Teknologi Republik Indonesia). The scheme of the grant is Fundamental Research entitled “Implementasi Green Manufacturing dan Dampaknya pada Kinerja UMKM Industri Kerajinan Lokal dalam Rangka Pengentasan Kemiskinan di Indonesia”).

Dynamic Capabilities and Innovation Implications for Business Sustainability

The aims of this study are to: 1) test and analyze the effect of dynamic capabilities on innovation 2) test and analyze the effect of capabilities on business continuity 3) test and analyze the effect of innovation on business continuity 4) test and analyze the effect of dynamic capabilities and innovation on business continuity. The research was conducted on Micro, Small and Medium Enterprises in Indonesia with a sample of 93 respondents. This research is quantitative of research by distributing questionnaires to Micro, Small and Medium Enterprises entrepreneurs. The sampling technique uses the saturation technique. Methods of data analysis using descriptive analysis and path analysis. The results of the study show that: 1) dynamic capabilities have a positive and significant effect on innovation 2) dynamic capabilities have a positive and significant effect on business continuity 3) dynamic capabilities have a positive and significant effect on business continuity 4) dynamic capabilities and innovation have a significant positive effect on continuity business.

Model for Working Capital Management of Micro, Small and Medium Enterprises in Indonesia by Using Multiple Objective Stochastic Programming

Micro, small and medium enterprises (MSME) have a big influence for the economy in Indonesia. But almost of this company don’t have an optimal working capital management because less knowledge and limitation of financial not only from the owner but also financial credit from bank. Working capital management plays an important role in the success or failure of a company its business activities. To achieve optimal use of working capital management managers the company must accurately control the trade-off between profitability and liquidity. The purpose of this research is to develop a model of working capital management where the sales are under uncertainty and the company has a limit financial. This study was tested using multiple linear regression analysis to see the correlation between profitability and liquidity with x1, x2, x3, x4, and x5 then find optimal solution by stochastic multi objective programming because we consider that sales is in under certainty. The main variables used in the analysis of return on assets to measure profitability, receivable turnover to measure liquidity, inventory turnover, accounts payable days, cash conversion. The results showed that account payable, inventory turnover, and cash turn over have a positive correlation for liquidity but inventory turnover and cash turnover have negative correlation to profitability.

Islamic Finance Practices in Micro, Small, and Medium Enterprises in Indonesia: A Systematic Literature Review

This study analyzes Islamic finance practices in micro, small, and medium enterprises (MSMEs) in Indonesia from an Islamic economics perspective. This study employed a systematic literature review method following the Preferred Reporting Items for Systematic Reviews and Meta-Analyses (PRISMA). The main data source was written material that analyzed the impact of Islamic finance practices on MSMEs in Indonesia. The findings demonstrate that Islamic finance practices positively influence the growth of MSMEs in Indonesia. This study indicates that Islamic finance practices have substantial potential for enhancing the well-being of MSMEs in the country. Noteworthy growth factors for MSMEs encompass Islamic business and economic ethics, innovation, and ethical and moral considerations. Islamic finance practices are a promising option for Indonesian MSMEs to enhance their business growth. Therefore, adopting Islamic finance practices can contribute to improving business performance and fostering MSMEs' growth. Future research may involve empirical studies to gain a more comprehensive understanding of Islamic finance practices in Indonesian MSMEs.

Risk Assessment of MSME Credit Process Digitalization Program of PT Bank XYZ West Sumatra Region

The economic development of Micro, Small Medium Enterprise (MSMEs) cannot be separated from the real performance faced by most businesses, especially micro, small and medium enterprises in Indonesia. The most prominent is the low level of productivity, added value, and product quality. Despite this, MSMEs provide employment for the majority of Indonesians. The contribution of MSMEs in national output is still categorized as low. The factor that causes the low contribution of MSMEs in producing low output of goods and services is the type of decision-making that is fast and does not consider other factors at a later date. The decision-making of MSME entrepreneurs who use intuition rather than normal business calculations results in decisions being made quickly and the execution of these decisions takes a short time. In order to build the excellence of MSMEs by providing additional capital that is the right amount and the right use, PT Bank XYZ developed a digital credit analysis that provides a comprehensive and thorough credit analysis, one of which is to reduce the risk of default. The research aims to Analyze the risk of AAKD in the speed of microcredit analysis, Analyze AAKD on the accuracy of PKM microcredit analysis and Formulate policies to be able to improve the AAKD system. Data analysis using House of Risk which consists of House of Risk stage 1 and stage 2. The results showed that in the first stage of the house of risk there were 30 causes of risk, and three dominant risks were obtained, namely errors in granting credit, credit process errors and cost changes. After obtaining the dominant risk causative agent, the second stage of the House of Risk is carried out, namely mitigation steps. Mitigation steps that can be taken by Bank XYZ in order, namely Improving communication both internally and externally, creating a regular HR education schedule, Consistent in the implementation of education, Increased supervision in monitoring HR performance, especially the credit section, Evaluating the work of the credit section and related sections and Preventive errors in the submission and credit process. Keywords: MSMEs, Bank XYZ, House of Risk, AAKD, Risk Management, Mitigation

Penerapan Metode System Usability Scale untuk Analisis UI/UX Website UMKM Lancar Jaya Food

Digitization of Micro, Small, and Medium Enterprises in Indonesia is still not optimal. The lack of full digitalization, besides the HR competency factor, is the unequal distribution of supporting infrastructures such as internet access and transportation. The use of IT in MSMEs is slowly but surely starting to show an increase. Generally, MSME actors use social media as a marketing and promotion medium. In addition to social media, MSMEs have also begun to use the Website as a marketing and promotion medium. However, due to the lack of MSMEs' ability to manage Websites, it is a challenge. As a result, the use of the Website is not optimal and inefficient because orders still use social media such as WhatsApp for buying and selling transactions. The purpose of this study is to analyze the UI/UX of the Lancar Jaya Food MSME Website, especially on the buying and selling features, using the System Usability Scale method. As a result, the System Usability Scale score obtained a value of 73.35, representing Acceptability Ranges with an Acceptable value. Then the adjective rating with a value of Good and Letter Grade with a value of B.

Spiritual Marketing in Increasing Sales Turnover of Micro, Small, and Medium Enterprises in Indonesia

The increasing diversity of modern humans has implications for changes in consumer behavior. Previously, consumers solely relied on logical considerations when selecting products or services, but now this framework has been shifted to encompass broader considerations. This trend forces a shift in the marketing paradigm; from rational marketing to emotional marketing, even continuing to spiritual marketing. This article seeks to examine the implementation of spiritual marketing to increase the sales turnover of Micro, Small, and Medium Enterprises (MSMEs) in Indonesia, with a case study of “Komunitas Bubur Sedekah” in Setabelan Banjarsari, Surakarta. This case study applied Hermawan Kertajaya's spiritual marketing theory as a theoretical framework. Data were obtained through in-depth interviews, observation, and documentation. In-depth interviews were held with advisors, porridge sellers, almsgivers, and customers. Observations were conducted to capture data from the porridge business activities. Meanwhile, documentation was utilized to collect data from various social media platforms belonging to the community. The findings of the study indicate that “Bubur Sedekah” is a manifestation of spiritual marketing because it is grounded in ethical spiritual principles, such as theistic, humanistic, and contextual values that bring satisfaction to customers, thus resulting in regular donations. Consequently, the sales turnover of “Bubur Sedekah” has considerably increased, and the sustainability of their business is now assured.

Revitalisasi Usaha Pengrajin Mendong di Sendangsari Minggir Sleman pada Era Pandemi Covid-19

The Covid-19 pandemic has had a real impact on Micro, Small, and Medium Enterprises in Indonesia, including in the Special Region of Yogyakarta. The Mendong craftsmanship “DERIJI HANDYCRAFT” in Sendangsari Village, Minggir, was among those that were severely affected. This community service activity aims to (1) innovate and catalog products to attract more consumers, (2) train and develop an online product marketing platform for partners, and (3) provide financial management training. Achieving these goals is done through training with discussion methods, lectures, and workshops with partners. The results of this service activity indicate that the program is going well and smoothly. This program can produce products in the form of catalogs and photos of product innovations, social media platforms for online marketing, and software and financial management guides for Micro Enterprises. While the suggestions are submitted from the results of this PPM program, DERIJI CRAFT partners should be able to update their online marketing platforms and socialize them to future generations to maintain sustainability.

Strategic orientation and its role in linking human capital with the performance of small and medium enterprises in Indonesia

Purpose This study aims to investigate the ways that human capital influences the strategic orientation variables entrepreneurial orientation (EO) and market orientation (MO), which ultimately leverage the firm performance of small and medium enterprises (SMEs) in Indonesia. Design/methodology/approach This study used a quantitative method with a total of 274 SMEs in the Regency of Gresik, East Java, Indonesia, as the observable population. Furthermore, the identified samples obtained through the random sampling technique were determined using the Slovin formula with 163 SMEs used for analysis. As the means of analysis, this study used a statistical approach by using PLS-SEM statistics from SmartPLS software. This analytical tool has been proven to be a robust statistical tool that has been used in many marketing studies. Findings This study found that human capital is a key determinant of EO and MO as strategic orientations of SMEs. Furthermore, this study highlighted that SMEs’ strategic orientations (i.e. EO and MO) provide a valuable thrust that leverages firm performance. Moreover, the role of human capital in leveraging firm performance was found to be significant with the role of the joint effect of EO and MO as mediator. This implies that human capital is not solely a single determinant that leverages SMEs’ performance. Research limitations/implications There are few aspects of limitations in this research that could be enhanced by other scholars in the discipline of entrepreneurship. First, the strategic orientation concept being indicated by EO and MO had yet to provide a comprehensive view of strategic orientation. Second, this research used samples that represent the traditional furniture cluster in East Java and had yet to explore other clusters such as food processing and services cluster which may be relevant to the context of SMEs in Indonesia. Practical implications As a practical implication, this study would benefit policymakers in Indonesia, such as the Ministry for Cooperatives and SMEs to provide assistance to SMEs to progressively nurture capacity-building through formal and informal education to leverage human capital. Moreover, it could benefit other relevant businesses, such as national banks in Indonesia whose interests are significant, especially in providing financial access to SMEs in Indonesia. Social implications The social implication of this research lay the focus on the suggestion by which SMEs must be able to optimize their capabilities by enhancing levels of human capital particularly for traditionally managed SMEs. The ability to survive external pressures for would be able to contribute to the social well-being of their society as many people are dependent heavily in the operation of the SMEs. Originality/value The significance of this study is twofold. Although the use of human capital as a determinant of firm performance has been discussed in the literature, few studies to date has sought to predict human capital with EO and MO as mediators of firm performance. Furthermore, the joint impact of EO and MO as a strategic orientation needs to be holistically explored and explained, particularly in an emerging economy context.

Literasi Keuangan pada Kelompok Wanita Telang di Desa Bandengan Kab. Pekalongan

The butterfly pea (Clitoria ternatea) are by most the community considered only ordinary plants actually have extraordinary benefit (Imayanti et al., 2019). Bandengan Village in Pekalongan Regency is one of the villages that has experienced floods since the last 10 years. Thus, many residents especially women, have used many pots to cultivate butterfly pea plants. Moreover, women in Bandengan Village, Pekalongan Regency try to be independent in terms of income and also want to increase their capability. Womenpreneur makes a big contribution to Small Medium Enterprise in Indonesia. According to Biro Pusat Statistik in 2021, the majority of the total Small Medium Enterprise in Indonesia, to be precise, 64.5 or 37 million Small Medium Enterprise are managed by women (BPS, 2021). The contribution of Small Medium Enterprise to employment is about 97% of the total workforce and able to increase about 60.4% of the total investment. However, the high number of Small Medium Enterprise have main problems such as low level of access to financial literation. Small Medium Enterprise can’t managed business and personal finance. They are have no record of income, costs and sales. As a result, they can not identify the financial needs of their business. Hence, financial literacy training and assistance is expected to be able to increase the financial capacity of Small Medium Enterprise owners, an make simple reports in managing their business.

Factors Affecting Tax Compliance by Small and Medium Enterprises in Indonesia

Complying with tax laws and regulations that are constantly changing is a challenge. Tax authorities provide clarification and advice and implement innovations such as e-filling to encourage businesses to pay their taxes on time and in full. Taxes lead to the withdrawal of part of the company's income for the benefit of the state. Therefore, many subjective and objective factors influence their payment process. This study aimed to examine factors affecting tax compliance by small and medium enterprises in Indonesia. This study uses quantitative research methodology, specifically survey methods. In distributing questionnaires to 384 respondents, 205 sample questionnaires were declared eligible to continue in this study. The data analysis method is structural equation modelling with partial least squares (SEM-PLS). The results of this study show that tax knowledge and knowledge of e-filling have a positive and significant effect on tax compliance. Instead, tax fairness has a negative and significant impact on tax compliance. However, the effect of the perception of corruption variable on tax compliance is rather insignificant; that is, this factor does not have a negative impact. Perception of corruption as a moderating variable has a slightly negative effect on the relationship between tax knowledge, knowledge of e-filling, tax fairness and tax compliance. The study results help better understand taxpayers' behaviour in their desire to pay taxes per the law. When changing taxation rules or introducing new tax collection methods, the government must consider factors that influence taxpayers' behaviour. The influence of some such factors was investigated in this study. In addition, it is worth fighting corruption in the tax system because it can reduce small and medium-sized enterprises' willingness to follow the law in the field of taxes.