Strengthening MSMEs crafting soft skills through the implementation of system thinking business model innovation

Abstract

MSMEs have an important role in sustaining the national economy as it contributes about 60 percent of GDP. On the other hand, however, the expansion of their business is considerably low. According to an economic survey by BPS in 2016, more than 63.72 percent of MSMEs had no plan to develop their business for various reasons. In addition, the Covid-19 pandemic has turned their business increasingly sluggish, because the demand for their product sales has decreased drastically. The purpose of this community service is to empower and strengthen the business management of MSME, particularly in the crafting industry i.e. Az Zahra Creation located in Surabaya. Specifically, the program focuses on the understanding of MSMEs mindsets and improving their capability in business and financial management. The methods carried out are identifying and mapping their problems through direct observation and interviews, formulating the solution using system thinking which is then actualized in mentoring and training programs. The results of the programs are renovating the workshop room, improving MSME partners’ knowledge and skills in planning, innovation of business model, managerial, and financial management. The impact of this program is expected to exemplify for other similar MSMEs, hence, the developed framework could be adopted by others to assist the business development.

Development of the Rendang Industrial Innovation System in Payakumbuh City

“…UPTD can also help MSMEs increase their competitiveness by adopting information technology and digital marketing techniques (Rerung, 2018); (Murniningsih et al, 2022). By utilizing digital technology, MSMEs can promote their products, interact effectively with customers, and expand their market reach (Prastyabudi et al, 2022). UPTD can provide training and assistance in digitizing products, developing business profiles, and using social media platforms for marketing.…”

“…Second, training programs that focus on business and financial management can empower and strengthen MSME business management, leading to increased capabilities in planning, business model innovation, and managerial and financial management (Wyati Saddewisasi et al, 2022). Additionally, training in technology and innovation areas, such as automation and Information and Communications Technology (ICT), can increase employees' specialized knowledge and improve internal processes, leading to greater productivity, lower operational costs, and higher revenues for MSMEs (Prastyabudi et al, 2022). Training programs for MSMEs contribute to their innovation potential by improving financial reporting, business management and technological capabilities.…”

Empowering women in Lunjuk Village through the creation of MSMEs ginger products

“…This initiative aims to process ginger into various products, including instant ginger powder, ginger dodol, ginger candy, and ginger syrup. The significance of micro, small, and medium enterprises (MSMEs) in bolstering family economies has been underscored by studies such as those conducted by Wiyani & Triatmanto (2016), Nurita (2016), Prastyabudi et al (2022), andHerawati et al (2023). This venture not only provides an avenue for these women to optimize their skills but also creates opportunities for economic empowerment within the community.…”

Human Capital and Performance of Micro, Small and Medium Enterprises: A Literature Review

“…Improving the quality of MSME human resources can be done with various strategies to overcome the challenges faced by MSMEs. One approach is to improve business and financial management capabilities, as well as understanding the mindset of MSMEs (Prastyabudi et al, 2022). In addition, community empowerment programs can play an important role in improving the economy by providing support and resources to MSMEs, such as improving production processes, technology applications and management skills (Wikantari & Supriadi, 2022).…”