#TITLE_ALTERNATIVE#

• Main Author: AFIF (NIM 25406054), MOH.
• Format: Theses
• Language: Indonesia
• Online Access: https://digilib.itb.ac.id/gdl/view/10915
• Institution: Institut Teknologi Bandung

Regarding the importance of SMEs on economic development of a country or regency, and many efforts implemented by the government in order to stimulate the growth of SMEs, this paper intends to identify the factors that affect the success of SME development and address the role of local government in supporting SMEs in a regency. In this paper, Jombang and Kediri Regencies were selected as an empirical study in order to find the factors that influence SME development. These regencies were selected because there is a significant difference in SME development, but in other aspects, there are many similarities between them.<p>In order to simplify the analysis, this paper classifies the influencing factors into three main factors: citizens characteristics (quality of human resources, number of productive age population, number of job seekers, availability of workers, productivity of workers, and cost of workers); business environment (availability of infrastructures, quality of infrastructures, general economic condition, socio-political condition, and natural resources); and government efforts (regulations, education outreach to the owners of SMEs, promotion, cluster development, funding, and investment).<p>The characteristics' value of these three factors from Jombang and Kediri Regencies are measured and compared in order to identify the similarities and differences among them. The different factors among them are assumed to be the significant factors influencing the SME condition in both regencies.<p>The three significant different characteristics this paper found between Jombang and Kediri Regencies that possibly influence SME conditions in these regencies are: the general economic condition; socio-political condition; and the fewer efforts made by Jombang Regency in expanding market opportunities and attracting investors in tourism fields. This paper claims that these three different factors influence the success of SME development in these regencies.<p>This paper also tries to address the most significant factor among them. It argues that government effort is the most significant factor among the three aspects. It was chosen as the most significant factor because the government has authority to create the rules of all activities in the regency. By using this authority, the government can create good policies to improve the economic activities in the regency, and it can also encourage the other two factors (citizens and business environment) to support SME growth in the regency. Another reason is that government efforts are a factor that can be more easily improved than the socio-political condition and general economic situation. In addition, many previous researchers also claim that government effort is an important factor.<p>In the case of Jombang and Kediri Regencies, this paper found that Jombang Regency makes fewer efforts in expanding market opportunities, and lacks three programs found in Kediri Regency to attract more investors in tourism fields. The development of tourism fields improves market opportunities for SME products, so it can be assumed that the main objectives of all these efforts are creating new market opportunities. Finally, this paper has found that the most important factor in affecting the growth of SMEs in the case of Jombang and Kediri Regencies is the efforts of the local government in creating new market opportunities for SMEs. <br /> <br />