ANALYSIS OF BUSINESS SUCCESS INFLUENCED BY ENTREPRENEURIAL COMPETENCE WITH INNOVATION AS A MEDIATING VARIABLE

Abstract

 Micro, Small and Medium Enterprises (MSMEs) play an important role in the Indonesian economy as a large labour absorber, Gross Domestic Product (GDP) enhancer, and inflation rate reducer. The growth in the number of MSMEs shows the increasing public interest in the business world. Despite the economic crises in 1998 and 2008 that weakened the economy, MSMEs survived with significant contributions to the Gross Domestic Product (GDP). However, challenges such as declining business commitment and changing business focus point to the need for a deeper understanding of the factors that influence MSME success. This study is important to understand the relationship between entrepreneurial competence, innovation, and small business success in Jambi City, with innovation as a mediating variable. Using data from 362 small business owners in Jambi City, an analysis using Partial Least Square (PLS) was conducted to explain the relationship between these variables. The results of the study are expected to provide an overview of the condition of entrepreneurial competence, innovation, and small business success in Jambi City. In addition, the analysis will also reveal the relationship between these variables. The findings of this study are expected to be the basis for government policy in supporting the development of the MSME sector and maintaining its existence as a pillar of the national economy.

KEYWORDS: Small business, entrepreneurial competence, innovation, business success