Journal of Open Innovation:

Technology, Market, and Complexity

Article
Economic Growth, Increasing Productivity of SMEs,
and Open Innovation
Batara Surya 1, *, Firman Menne 2 , Hernita Sabhan 3 , Seri Suriani 4 , Herminawaty Abubakar 5
and Muhammad Idris 5

1 Department of Urban and Regional Planning, Faculty of Engineering, Bosowa University,

Makassar 90231, Indonesia
2 Department of Accounting, Faculty of Economic and Business, Bosowa University, Malassar 90231, Indonesia;
firman@universitasbosowa.ac.id
3 Department of Economic, STIM Lasharan Jaya, Makassar 90231, Indonesia; nitazafio62@gmail.com
4 Department of Financial Management, Faculty of Economic and Business, Bosowa University,
Makassar 90231, Indonesia; serisuriani06@gmail.com
5 Department of Economic Management, Faculty of Economic and Business, Bosowa University,
Makassar 90231, Indonesia; herminawati.abubakar@universitasbosowa.ac.id (H.A.);
idrismuh1955@gmail.com (M.I.)
* Correspondence: batara.surya@universitasbosowa.ac.id

Abstract: The empowerment of small and medium economic enterprises will drive economic growth.
The purpose of this study is to analyze (1) how economic growth works as a determinant of in-
creasing the productivity of small and medium enterprises; (2) the influence of government policies,
business capital support, and the strengthening of human resource capacity on the development of
small and medium enterprises (SMEs); and (3) strategies to increase business productivity and the
sustainability of SMEs. We used a sequential explanatory design, which is a combination of quanti-



tative and qualitative research, and data were obtained through observation, in-depth interviews,


surveys, and documentation. The results of the study indicate that economic growth coupled with
Citation: Surya, B.; Menne, F.; technological innovation will boost the productivity of economic enterprises and increase people’s
Sabhan, H.; Suriani, S.; Abubakar, H.; welfare. Government policies, business capital support, and human resource capacity strengthening
Idris, M. Economic Growth, simultaneously have a positive effect on the development of SMEs, with a determination coefficient
Increasing Productivity of SMEs, and of 97.6%. Based on the results of this study, an economic growth strategy based on technological
Open Innovation. J. Open Innov.
innovation is recommended for government decision making as an effort to increase the productivity
Technol. Mark. Complex. 2021, 7, 20.
of community economic enterprises in Makassar City, Indonesia.
https://doi.org/10.3390/joitmc7010020

Keywords: economic growth; business productivity; public welfare; economic business sustainability
Received: 11 December 2020
Accepted: 4 January 2021
Published: 7 January 2021
1. Introduction
Publisher’s Note: MDPI stays neu- Development policies that are oriented towards regional economic growth supported
tral with regard to jurisdictional clai- by the use of technology will accelerate and encourage increased productivity in economic
ms in published maps and institutio- enterprises developed in the community. Community economic development through
nal affiliations. entrepreneurship training has an impact on economic growth, and efforts to increase
community productivity will require technological innovation [1]. The dynamics of the
global economy have a significant impact on the economic structure of the region, including
Copyright: © 2021 by the authors. Li-
the SMEs [2]. Political stability and security play an important role in economic growth.
censee MDPI, Basel, Switzerland.
This means that the components of political stability, socio-economic conditions, and
This article is an open access article
investment have a positive effect on the flow of capital and investment in a country,
distributed under the terms and con- including small and medium enterprise development [3]. Furthermore, industrialization
ditions of the Creative Commons At- and modernization followed by conducive investment flows are determinants of regional
tribution (CC BY) license (https:// economic growth in Indonesia [4]. Thus, technological innovation followed by political
creativecommons.org/licenses/by/ stability leading to industrialization and modernization will accelerate economic growth
4.0/). and increase the productivity of community economic enterprises [5].

J. Open Innov. Technol. Mark. Complex. 2021, 7, 20. https://doi.org/10.3390/joitmc7010020 https://www.mdpi.com/journal/joitmc

J. Open Innov. Technol. Mark. Complex. 2021, 7, 20 2 of 37

Economic growth in several countries in Southeast Asia during the 2018–2019 period
grew by an average of 4.6%. The highest economic growth was experienced by Cambodia
and Vietnam, with respective values of 7.1% and 6.9% [6]. There are 63 million SMEs
developing in Indonesia, 62 million of which are categorized as medium enterprises and
750,000 of which are categorized as small businesses. Thus, SMEs have the potential to
boost national economic growth in Indonesia. Furthermore, if these business ventures are
developed and improved, the Indonesian economy will experience a growth rate of 5% [7].
This means that developing SMEs will contribute 60% of Indonesia’s total gross domestic
product (GDP). The existence of MSMEs in Indonesia is still faced with a very basic problem,
namely weak access to formal financial institutions, especially access to capital loans from
banks, which only reach 20% of the total loans disbursed. Thus, the characteristics of small
and medium business management are still not conducive to maximum benefits due to
various policy problems that still require complex procedures and requirements [8].
In the context of regional growth at a macro level, support for the existence of economic
enterprises, especially SMEs, needs to be oriented towards creating competitiveness and
business productivity that is competitive in global, national, and local markets. Thus, it
requires increased knowledge, good management, and a strengthening of human resource
competencies. That is, the key element of the sustainability of an economic enterprise is
the ability to read the strategic environment and be competitive [9,10]. Economists believe
that the achievement of high economic growth, which is most often measured in GDP
(Gross Domestic Product), not only reflects wealth, social welfare, and the ability to develop
entrepreneurship, but is also important for balancing economic, environmental, and social
development on an ongoing basis [11,12]. Furthermore, in the context of local and regional
development, relational assets are important in strengthening the capacity of business
institutions, network systems, and business cooperation as a single system [13,14].
The acceleration of the development of Makassar City towards industrialization and
city modernization is marked by an economic growth of 10.2%. Five strategic economic
sectors contributed positively to Makassar City’s Gross Regional Domestic Product in
2019: (1) wholesale trade, retail, and car and bicycle repair, with a contribution value of
20.46%; (2) construction services, with a contribution value of 18.22%; (3) the processing
industry, with a contribution value of 10.31%; (4) educational services, with a contribution
value of 8.77%; and (5) information and communication, with a contribution value of
9.08% [15]. These five sectors confirm that the macroeconomic growth of Makassar City
is relatively stable but has not been able to encourage an increase in SMEs in relation to
business innovation and sustainable employment absorption. This condition is influenced
by several factors, including (1) the weak process of developing SMEs, (2) the innovation
and utilization of technology that has not been optimized to support the development of
SMEs, (3) support for business capital and access to formal finance to support increased
production, a diversity of economic enterprises, and product marketing systems that are
not yet optimal and sustainable, and (4) government policy support that has not been
optimal for SMEs.
Research results that support this study include: (1) studies conducted by Munizu [16]
affirmed that hard and soft technology resources play an important role in encouraging the
increased productivity of economic enterprises in relation to organizational arrangements.
(2) Studies conducted by Smith [17] found that the technological innovation capability of an
economic enterprise is an integration of all existing resources in one company. (3) Studies
conducted by Hsien Wang et al. [18] found that the ability of technological innovation is
directly related to five indicators, namely, (i) the ability to read opportunities, (ii) innovation
in making decisions, (iii) ability in marketing, (iv) production capability, and (v) capital
capability. (4) Studies conducted by Xirogiannis et al. [19] found that the relationship
between human resource competence and the performance of SMEs was influenced by
human resource competency factors, namely, knowledge, skills, and the ability to improve
business performance. The results of these studies are at a meeting point in the sense that
SMEs will be productive when followed by the ability of human resources and technological
J. Open Innov. Technol. Mark. Complex. 2021, 7, 20 3 of 37

support to encourage increased business performance. The continuation of the study is

more focused on increasing the productivity of SMEs, which is followed by the use of
technology, strengthening the capacity of the workforce, support for business capital and
support for market access from the government, which will encourage economic growth,
increase welfare, and reduce socio-economic disparities towards increasing the productivity
of small and medium businesses on an ongoing basis.
Furthermore, increasing the productivity of SMEs in Makassar City is very important
and strategic to support economic growth, absorption of labor, and increase community
welfare. The focus of this study is aimed at answering the following research questions:
(1) How does economic growth work as a determinant of increasing the productivity of
small and medium enterprises? (2) How do the influence of government policies, business
capital support, and human resource capacity affect the development of SMEs? (3) What is
the strategy for increasing business productivity and the sustainability of SMEs?

2. Conceptual Framework
The dynamic development of Makassar City illustrates that the macroeconomic
growth orientation has made a positive contribution to the Gross Regional Domestic
Product but has not been able to encourage the improvement of the micro economy and
the small business sector driven by SMEs. Gross Domestic Product (GDP) is a measure of
total production in relation to the monetary value of all goods and services produced in a
region for a given period of time [20]. This means that macroeconomic stability tends to be
stable if it is not faced with serious problems, such as disease outbreaks that disrupt the
social stability of the community, in relation to the decreasing purchasing power, as well as
the distribution patterns of the flow of goods and services. Thus, macroeconomic growth
tends to be stable if it is followed by enough public confidence in government policies. The
conceptualization of macroeconomic theory holds that sustainable development is an effort
to permanently maintain income, which results from a reduced capital stock [21,22]. This
means that capital flows are a key variable in supporting the sustainability of economic
growth both for the country and in the regional context [23,24].
In the context of regional development, the macroeconomic concept is basically ori-
ented towards efforts to promote fair and equitable economic growth through the use of
natural resources [25,26]. Development policies and financing are designed to address
income inequality and socio-economic inequality [27]. Thus, widening income inequal-
ity will have an impact on the economic order, political unrest, and social problems in
a country and region [28,29]. This means that inequality and socio-economic disparities
contribute to weak consumption levels, leading to an increase in the poverty rate. One of
the government’s efforts to overcome this problem is the development of SMEs through
a simplified licensing facility, in the hope that more economic enterprises will develop,
and which has the opportunity to legalize economic activities in the community [30,31].
Thus, an increase in the productivity of community economic enterprises in Makassar City
will be achieved if it is supported by government policies and an ease of licensing for the
community in relation to the development of SMEs.
One effort made by the Indonesian government to encourage increased economic
growth and the optimization of business ventures developed in the community has been to
simplify the licensing process through the use of online single submission (OSS). The use
of OSS is expected to encourage technological innovation efforts so that entrepreneurs can
survive, continue to produce, and drive the national economy. OSS is a business licensing
system that is integrated electronically with all ministries and state agencies to all local
governments in Indonesia. Thus, the implementation of an OSS policy is an effort to
improve the national economy and the growth of the business world, especially SMEs,
which have been complaining about the length of time required, and the bureaucratic chain
that must be passed, to start a business. Technological innovation is important in supporting
economic activities in the community for increasing productivity and modern business
management [32,33]. The study’s conceptual framework is presented in Figure 1 below.
 which have been complaining about the length of time required, and the bureaucratic
chain that must be passed, to start a business. Technological innovation is important in
supporting economic activities in the community for increasing productivity and modern
J. Open Innov. Technol. Mark. Complex.business
2021, 7, 20management [32,33]. The study’s conceptual framework is presented in Figure 1
4 of 37
below.

Figure 1.
Figure The conceptual
1. The conceptual framework
framework ofof economic
economic growth,
growth, technological
technological innovation,
innovation, and
and community
community economic
economic business
business
sustainability.
sustainability. Source:
Source: author’s
author’selaboration.
elaboration.

2.1.Economic
2.1. EconomicBusiness
BusinessProductivity
Productivity
Theera
The eraofofglobalization
globalizationwithwithtechnological
technologicaladvances
advancesindeed
indeedentails
entailsaademand
demandto tosup-
sup-
portregional
port regional andandnational
national economic
economic growth.
growth. In Ingeneral,
general,globalization
globalization is is seen
seen asas aaprocess
process
of global
of global dependence
dependencedriven drivenby by capital
capital and
and investment
investment towards
towards market
market integration
integration andand
competition, which requires deregulation
competition, which requires deregulation [34,35]. In this context, it can be understood
In this context, it can be understood that that
the progress of development and economic growth of Makassar
the progress of development and economic growth of Makassar City cannot be separated City cannot be separated
from the
from the impact
impact of of globalization
globalization andand technological
technologicaladvances,
advances,whichwhichplay playa astrategic
strategic role in
role
supporting
in supportingthe theperformance
performanceofofSMEs SMEsdeveloped
developedin inthe
the community.
community. Five important and
Five important and
strategic roles
strategic roles inin the
the use
use of
oftechnology
technologysupport
supportthe thedevelopment
development ofofSMEs
SMEs include
includethethe
follow-
fol-
ing: (1) changing manual processes to automatic ones, reducing labor
lowing: (1) changing manual processes to automatic ones, reducing labor costs and oper- costs and operating
costs;costs;
ating (2) reducing the time
(2) reducing needed
the time to perform
needed tasks;tasks;
to perform (3) increasing the speed
(3) increasing of decision
the speed of de-
cision making and increasing competitive economic business performance; (4)costs
making and increasing competitive economic business performance; (4) saving savingon
promotion and marketing; and (5) integrating the system from process
costs on promotion and marketing; and (5) integrating the system from process to product to product market-
ing. Thus, Thus,
marketing. the function and role
the function andof technology
role of technologywill will
accelerate the transformation
accelerate the transformation of the
of
business world, including SMEs developed in the community. Thus,
the business world, including SMEs developed in the community. Thus, the use of tech- the use of technology
is a driver
nology is a of business
driver sustainability,
of business digital digital
sustainability, transformation, and entrepreneurship
transformation, and entrepreneurship [36].
[36].
2.2. Sustainability of SMEs
Technology has become important for business competition and has penetrated all
aspects of business life. This means that technology is a strategy in dealing with ongo-
ing developments in an era of globalization and digitalization. The impact of globaliza-
tion is characterized by the mobility of goods and services, capital flows, and the use of
technology [37]. Furthermore, in order to face the global market competition, business
enterprises that can master technology are needed. This means that the technological
components owned by a business must be continuously updated to compete in prod-
uct marketing and reach potential markets. Thus, product advantages, market potential,
the fulfillment of customer needs, human resource capacity, the mastery of technology,
J. Open Innov. Technol. Mark. Complex. 2021, 7, 20 5 of 37

and the utilization of resources are factors that affect the performance of economic enter-
prises [38]. This means that business competitiveness, business productivity, management,
raw materials, production costs, technology, leadership transformation, trust and inno-
vative employee behavior systems contribute positively to the existence of companies
including SMEs [39,40]. The development of SMEs through technological innovation that
develops in the community in Makassar City is expected to expand market reach and
the process of accelerating structural transformation. This indicator is measured based
on changes in the economic structure of Makassar City and the resilience of the national
economy in Indonesia.
The issue of sustainability has triggered the birth of new ideas about the concept
of economic development in relation to environmental and social aspects. Sustainable
development has become a fundamental strategy for guiding social and economic transfor-
mation [41,42]. Furthermore, small and medium business governance in Makassar City is
faced with new challenges, namely, in terms of business sustainability. Business continuity
is related to three basic components, namely, profit, people, and the planet. This means that
it requires the use of environmentally friendly technology and the development of clean
products [43]. Furthermore, the strategy to increase profit, people and planet can be carried
out in a simple way, namely waste management with the Garbage Bank system, product
innovation from recycled materials, paperless online promotion, the use of environmentally
friendly product packaging, reducing the use of equipment that consumes relatively large
amounts of energy, and apportioning some business profits towards social responsibility.
The aim is to ensure the sustainability of SMEs and social cohesion in society.

3. Materials and Methods

3.1. Research Design
This research uses a sequential explanatory strategy approach, a strategy applied
by collecting and analyzing quantitative data first and qualitative data second. First, the
pre-field stage included (i) a description of the research design, (ii) a literature review,
(iii) a selection of research objects, (iv) a list of research instruments used, (e) a description
of the data collection design, (f) a description of the data analysis procedure design, and
(g) an explanation of data validity. Second, in the field stage, the researchers identified
SMEs that needed support with increasing business productivity, technological innovation,
coaching, business capital, product development, and business product marketing. The on-
tological assumption here is that the government will support increases in the productivity
of SMEs for the economic growth of Makassar City.
Third, upon entering the field, the researchers studied the situation and the conditions
of SMEs developed in the community in Makassar City. The aim was to improve the
relationship between the researchers and the subjects under study. Fourth, in the data
collection process, researchers (i) limited themselves to the scope of the study, (ii) recorded
data using field notes, (iii) collected data using a recording device, (iv) examined contradic-
tory situations, and (v) conducted field analysis. Thus, in this study, data analysis began
with field data collection, which was then grouped according to the focus and objectives
to be achieved. The grouped data was used for interpretation or verification using the
theoretical basis used in this study.

3.2. Study Area

This study was conducted in Makassar City through the identification of SMEs, which
are scattered in several sub-district locations. The selection of SMEs developing in Makassar
City was based on the following considerations: (1) Does the SME require an increase
in business productivity based on technological innovation? (2) Does the SME require
fostering and product development efforts to reach potential markets? (3) Does the SME
need business capital support to seize market opportunities and workforce absorption in
order to reduce the unemployment rate of the working age population?
J. Open Innov. Technol. Mark. Complex. 2021, 7, 20 6 of 37

These indications were assessed based on the ability to survive and maintain economic
business stability. The number of SMEs in the developing city of Makassar was 2683 divided
into several categories, namely, (i) food and beverage businesses, (ii) handicraft businesses,
(iii) the creative economy, (iv) clothing, and (v) cafes and restaurants. Furthermore, the
sectors of economic activity and their contribution to the Gross Regional Domestic Product
of Makassar City for the period 2017–2019 are presented in Table 1 below.

Table 1. Gross Regional Domestic Product of Makassar City in 2017–2019.

Economic Contribution (Year)

Business Field
2017 2018 2019
Agriculture, Forestry, and Fisheries 793,150 808,428 854,968
Mining and Excavation 1242 1102 991
Processing Industry 28,442 29,380 32,666
Procurement of Electricity and Gas 43,855 50,468 54,824
Water Supply, Waste Management, Waste, and Recycling 284,373 307,684 306,466
Construction 24,591 28,760 32,513
Wholesale and Retail Trade, Car, and Motorcycle Repair 27,216 31,753 36,513
Transportation and Warehousing 3684 4151 4588
Provision of Accommodation, Food, and Drink 3224 3698 3980
Information and Communication 12,848 14,801 16,204
Financial Services and Insurance 8823 9706 10,375
Real Estate 5569 5957 6378
Company Services 1660 1897 2163
Government Administration 4683 5494 6090
Education Services 12,825 14,484 18,164
Health Services 3967 4483 5020
Other Services 3809 4470 5067
Total Gross Regional Domestic Product 143,148 160,207 178,430
Growth Rate (%) 11.58
Source: author’s elaboration and BPS Makassar City [15].

Table 1 illustrates five business fields that have a dominant contribution value to the
economic growth of Makassar City: (1) wholesale trade, retail, and car and bicycle repair,
with an average growth of 5.56%; (2) the processing industry, with an average growth of
1.10%; (3) construction services, with an average growth of 5.65%; (4) information and
communication, with an average growth rate of 5.07%; and (5) financial and insurance
services, with an average growth of 3.34%. These five fields confirm that the economic
growth orientation of Makassar City still relies on trade, industry, construction services,
information and communication services, and financial and insurance services. Thus, the
economic growth of Makassar City has not been matched by its SMEs.
The potential for developing SMEs in Makassar City is dominant in centers of eco-
nomic activity in the city center and in transitional areas. Developing SMEs are spread
across several districts, among others: (1) Mariso Regency, with 517 business units;
(2) Mamajang District, with 81 units; (3) Tamalate District, with 157 units; (4) Makas-
sar Regency, with 149 units; (5) Ujung Pandang District, with 364 units; (6) Wajo District,
with 25 units; (7) Bontoala District, with 381 units; (8) Ujung Tanah District, with 8 units;
(9) Tallo Regency, with 82 units; (10) Panakukkang District, with 176 units; (11) Biringkanaya
Regency, with 63 units; (12) Tamalanrea District, with 25 units; (13) Rapoccini District,
with 408 units; (14) Manggala District, with 323 units; and (15) Sangkarrang Regency, with
5 units. The study locations are presented in Figure 2 below.
 Mamajang District, with 81 units; (3) Tamalate District, with 157 units; (4) Makassar
Regency, with 149 units; (5) Ujung Pandang District, with 364 units; (6) Wajo District, with
25 units; (7) Bontoala District, with 381 units; (8) Ujung Tanah District, with 8 units; (9)
Tallo Regency, with 82 units; (10) Panakukkang District, with 176 units; (11) Biringkanaya
Regency, with 63 units; (12) Tamalanrea District, with 25 units; (13) Rapoccini District,
J. Open Innov. Technol. Mark. Complex. 2021, 7, 20 7 of 37
with 408 units; (14) Manggala District, with 323 units; and (15) Sangkarrang Regency, with
5 units. The study locations are presented in Figure 2 below.

Figure 2.
Figure 2. Small and
and medium
medium enterprises
enterprises (SMEs)
(SMEs) in
in Makassar
Makassar City
City as
asstudy
studyobjects.
objects. Source:
Source: author’s
author’s elaboration
elaboration and
and
development planning agency at sub-national level in Makassar City.
development planning agency at sub-national level in Makassar City.

3.3. Data
3.3. Data Collection
Collection
In this study,
study, the
the data
data were
were obtained
obtained through
through field
field observations,
observations, surveys,
surveys, in-depth
in-depth
interviews, and documentation. The data sources
The data sources in this study were divided into three
three
categories: (1) Data on economic growth and technological
technological innovation
innovation are are determinants
determinants
of the increasing productivity of community economic enterprises in Makassar City. City. The
The
data sources
sources are
areeconomic
economicpotential,
potential,the
thebasic
basiceconomic
economic sector, and
sector, andtechnology
technologyutilization
utiliza-
obtained
tion through
obtained observation
through andand
observation documentation.
documentation. (2)(2)Data
Dataonon government
government policies,
business capital support, human resource capacity, and the the development
development of SMEs SMEs were
were
surveys, in-depth
obtained through observation, surveys, in-depth interviews,
interviews, andand documentation.
documentation. (3) (3) Data
on economic
economic growth, technological
growth, innovation,
technological businessbusiness
innovation, diversification, product marketing,
diversification, product
and business
marketing, economic
and businessstability
economic were obtained
stability werethrough
obtainedobservation, surveys, in-depth
through observation, surveys,
interviews, and documentation.
in-depth interviews, (4) Data on(4)
and documentation. strategies
Data onforstrategies
increasing forbusiness productivity
increasing business
and the sustainability
productivity and theof sustainability
economic enterprises, obtainedenterprises,
of economic through observation,
obtained surveys,
through
in-depth interviews, and documentation taking, into account the strengths, weaknesses,
opportunities, and threats of SME sustainability in Makassar City.

3.3.1. Observation
Observation was used to observe the characteristics and potential of SMEs, the busi-
ness cooperation that was built, the workforce used, and the efforts of SME to maintain
business stability. Furthermore, observation was also used to observe SME actors both
individually and in groups for some time without manipulating or controlling them, as well
as recording important findings to support the analysis process. The instruments used by
researchers in collecting through observation were, among others; field notes, periodicals,
J. Open Innov. Technol. Mark. Complex. 2021, 7, 20 8 of 37

and checklists. The aim was to describe the circumstances, situations and events related to
the existence of SMEs in Makassar City.
In this study, two things were done by researchers in identifying the existence of
SMEs, namely: (a) capturing the social situation and context of SMEs entrepreneurs in
developing their business, and (b) identify SME activities for the purpose of comparing and
assessing the different characteristics of the economic enterprises being developed. That is,
researchers noted things that are factual which are considered to influence the existence
of SMEs. From this information and context, the researchers then described the events
observed in the field. Types of data tracked in the implementation of observations included
the type of SMEs business, government policy support for SMEs development, business
stability, economic relations, work systems, used business capital, number of workers,
human resource capacity, technology used, management of the business, customer service,
diversification of businesses, and efforts to access potential markets. The results of these
observations by the researcher were then used to interpret the events that occured. That is,
the researcher concluded events in the field using theoretical references, for the purpose of
building research hypotheses.

3.3.2. In-Deep Interview

The main subjects in in-depth interviews in this study were SMEs in Makassar City.
The in-depth interview functions used include: (1) a description that describes the situation
and condition of SMEs in running their business, and (2) identify potentials and problems
faced by SMEs actors. Thus, in-depth interviews were used to build understanding of the
limited social realities of the environment as it is. The in-depth interviews in this study
used instruments, namely a tape recorder and interview guides equipped with freelance
notes and a checklist. Furthermore, in-depth interviews were used to trace data, namely
the type of business developed, business stability, economic relations built, work systems,
business capital used, number of workers, human resource capacity, technology used,
business management, customer service, diversification efforts, and efforts made to access
potential markets.
The interview guide held by the researcher during the in-depth interview was only
used as a guide if the researcher asked a question that was further away from the substance
of the research. The interview took place in an atmosphere where the informant was still
carrying out his work. The information that researchers extracted and required deepening
in in-depth interviews included government support, venture capital support, and the
human resource capacity of SMEs. The results of the observation and in-depth interviews
were then used to build hypotheses. The hypothesis developed in this study is that there
is a relationship or correlation between government policy support, business capital,
and strengthening human resource capacity on the development of small and medium
enterprises (SMEs).

3.3.3. Questionnaire
The questionnaire in this study was used for two functions: (1) Description, which
describes the characteristics and potential of developing SMEs in Makassar City; and
(2) Measurement, which describes the relationship to the object under study. Furthermore,
the purpose of using the questionnaire was to provide an overview of the potential of
developing SMEs in Makassar City. The questions raised in tracing the data were respon-
dents’ perceptions about government program support for SMEs development, SMEs
development needs, types of SMEs business, technology used, business diversification,
venture capital, SMEs product marketing, and SMEs business stability. The data was then
measured using a nominal scale and an interval scale.
Structured interviews using a questionnaire were carried out by asking questions to
predetermined respondents. The filling out of the questionnaire in this study was facilitated
by the enumerators who were previously selected. The enumerators were selected based
on the following considerations: (1) having the ability to collect data; and (2) understanding
J. Open Innov. Technol. Mark. Complex. 2021, 7, 20 9 of 37

the conditions of SMEs business in the study area. Before carrying out their duties in the
field, the enumerators were given instructions and exercises in filling out the questionnaire
as well as techniques for conducting interviews with respondents. Furthermore, the ques-
tionnaire was distributed to 15 sub-districts in Makassar City that had SME businesses. The
reason the researchers determined the location was based on the development conditions
of SMEs, which required various efforts to encourage increased productivity of economic
enterprises. The criteria for the actors who filled out the questionnaire (respondents)
were (i) SMEs based on the type of business, (ii) the participants were already married,
and (iii) the economic enterprises were developed by SMEs that have been running for
five years.

3.3.4. Documentation
Documentation is secondary data, collected by researchers to complement and support
analysis. The data referred to include (1) Makassar City Figures in 2019, (2) Makassar City
Gross Regional Domestic Product in 2017, 2018, and 2019, and (3) the SME profile. All
information obtained by researchers from the results of previous studies and data obtained
in the form of documents is categorized as secondary data. That is, the data obtained
by researchers is not directly obtained from primary sources but from secondary sources.
Furthermore, documentation data was used during the research, including documents
on the number of SMEs obtained from the Makassar City Statistics Office, SMEs profiles
obtained from the Makassar City SMEs Cooperative and Empowerment Office, and other
documents related to the developing SMEs in Makassar City. All of these documents are
used to support data from observations, in-depth interviews, and survey results.

3.3.5. Research Instruments

The qualitative approach in this study is the research instrument itself, and the first
step taken was data validation. A qualitative approach involves that the researcher acting
as the main instrument to determine the focus of the research and select key informants
as data sources. The aim was to understand the situation and condition of the develop-
ing SMEs in Makassar City. Thus, the researchers collected data, assessed the quality of
the data, interpreted the data, and formulated conclusions [44,45]. The steps taken by
researchers to increase sensitivity are through interaction with environmental stimuli that
are considered significant and affect the existence of SMEs. This means that researchers
interpreted economic growth and technological innovation as a determinant of the increas-
ing productivity of community economic enterprises in Makassar City. Thus, researchers
adapted themselves to all aspects and conditions of SMEs for data collection purposes and
understood the economic business situation developed by the community in relation to
increased productivity and diversification of the undertaking. Researchers involved them-
selves in the interaction process for the purpose of understanding how society responds to
economic growth, technological innovation, business diversification, product marketing,
and the stability of SMEs, referring to the theories used. Researchers then made conclusions
based on the collected data and obtained confirmations, amendments, and improvements,
and finally enhanced trust by responding to the efforts made by the community to increase
business productivity and seize market opportunities.
Furthermore, a questionnaire was used to measure technological innovation, business
diversification, product marketing, how to develop a business, and business stability,
related to educational background and human resource competence, type of business, ways
to reach potential markets, and the sustainability of SMEs. The indicators used to measure
business development are (i) the capital used, (ii) the production capacity generated, and
(iii) the amount of labor used. Human resource competence is measured using indicators,
namely (i) mastery of technology, (ii) ability to manage a business, (iii) skills and skills of
the workforce, and (iv) leadership. Product marketing is measured by indicators, namely
(i) product marketing scale, (ii) ability to access technology, (iii) use of social media, and
(iv) ability to build networks and cooperation between businesses. Business sustainability
J. Open Innov. Technol. Mark. Complex. 2021, 7, 20 10 of 37

is measured by indicators, namely (i) ability to compete, (ii) ability to diversify business,
(iii) ability to maintain product stability, and (iv) competitiveness of marketed products.

3.3.6. Triangulation
Triangulation was carried out by combining observations, in-depth interviews, and
documentation used as data sources, and this was done to test the credibility of the
data and understand and interpret economic growth and technological innovation as
determinants of the increasing productivity of economic enterprises. The goal was to
obtain consistent, comprehensive, and definitive data. The survey data were categorized
as quantitative, while the data from in-depth interviews and observations was categorized
as qualitative. Thus, triangulation was carried out in three stages: (i) the extension of
observations, (ii) the confirmation of data sources, and (iii) the testing of the credibility of
the data. The quantitative data collected through surveys include information regarding
(i) economic growth, (ii) technological innovation, (iii) business diversification, (iv) product
marketing, and (v) economic business stability. Furthermore, qualitative data collected
through in-depth interviews include information regarding (a) how to develop a business,
(b) work mechanisms, (c) product marketing, (d) labor used, and (e) factors affecting
SMEs. Qualitative data collected through observations include information regarding
(a) the selection of business locations, (b) the raw materials used, (c) business existence
and business stability, (d) the built economic relations, (e) work systems, and (f) barriers to
marketing products.

3.3.7. Research Informants and Respondents

Informants in this study were used for qualitative data collection. The determination
of informants was done by snowballing, meaning that the researcher determined who
could be interviewed based on information provided by the local government related to
developing SMEs and was able to provide good information about the development of
SMEs in Makassar City. The selected informants consisted of several respondents who
had been previously interviewed. This determination was aimed at exploring some of the
questions that were answered in the questionnaire but required a more detailed explanation.
The informants referred to by the researcher are SMEs players who have succeeded in
developing their business. The informant is by the researcher as an actor in the phenomenon
being studied. The number of informants determined included 15 SME business actors, five
outside the respondent group and 10 respondents who had been interviewed previously.
The determination of the former group was chosen based on the classification of economic
businesses being developed. The latter group was chosen because (1) they had problems
in developing economic activities in terms of capital, labor, technology used, and product
marketing, (2) the economic relationship built by informants and consumers is still ongoing
in the form of symbiotic mutualism, in this case consumers are permanent and assist in
promoting SMEs business products, (3) they were able to provide information about the
type of business being developed, and (4) they were able to provide information on social
relations, product marketing, and business stability.
Quantitative data were collected from respondents or research samples. The sample
was determined using the stratified random sampling method. Sampling was performed
by dividing the population into strata, selecting a simple random sample from each stratum,
and combining them into a sample to estimate the population parameters. The stratified
random sampling method is a sample selection method whereby the population is divided
into homogeneous groups called strata, and samples are then taken randomly from each of
these strata [45]. This method is used when the research population is not homogeneous
or stratified proportionally, in the sense that developing SMEs are differentiated based
on business classifications, business categories, and generated profits. In this case, SMEs
were differentiated based on business capital, type of business, educational background,
and human resource competence. The results of filling out the questionnaire were then
analyzed using quantitative descriptive methods, multiple regression, path analysis, and
J. Open Innov. Technol. Mark. Complex. 2021, 7, 20 11 of 37

percentage analysis based on frequency figures. Sampling refers to Cochran [46] with the
following formulation:
n = Z2 αPQ/d2 (1)
where n is the sample, Zα is the standard deviation for 1.96 with a coefficient value of 95%,
P is the proportion of subjects, Q is 1, P = 0.5, and d is the degree of accuracy used, which is
0.15. The number of samples in this study was determined by as many as 350 respondents.

3.4. Data Analysis Method

Data analysis includes organizing, sorting, classifying, coding, and categorizing the
data that has been collected, including field notes, pictures, photos, and documents in the
form of reports. Organizing the data is done by contradicting the business situation of the
developing SMEs for the purpose of setting a theme according to the theory used. Further-
more, in-depth interviews were carried out with informants with the aim of comparing
respondents’ answers in order to obtain more detailed explanations from both respondents
and non-respondents who had been interviewed previously. The researchers asked the
informant to provide a detailed explanation regarding the type of business, the business
capital used, business stability, and the sustainability of economic business.
The quantitative approach is used to multiply information by developing several
questions previously collected and given alternative answers. The questions compiled
by the researchers in the questionnaire are based on the results of initial observations
made in the field. Data analysis was carried out in the field at the time of data collection,
separating information into categories, compiling information in a story, and presenting
writing qualitatively by describing the situation and conditions of developing SMEs and
the efforts made to increase business productivity. The questionnaire was used to analyze
the direct and indirect effects of economic growth, technological innovation, and business
diversification on product marketing and the stability of people’s economic enterprises.
Furthermore, emic and ethics data, which are the main data in this study, are used to
collect information from informants and respondents. Thus, data analysis in a qualitative
approach begins with data collection in the field, and the data are then grouped according
to the research objectives. The grouped data are used for the interpretation and verification
of the data based on the theory used as a reference. To interpret the data in question, the
characteristics of SMEs developed in the community are compared. The data are then
analyzed by displaying tables and their frequency in relation to technological innovations
developed to maintain the stability of the business being developed. Thus, the data analysis
in this study includes data reduction, data display, and conclusions.
Data reduction was carried out with the following considerations: (1) The data ob-
tained in the field are high in number and complex, so reduction was immediately carried
out by grouping similar data. (2) The main points, themes, and patterns were selected
and summarized to formulate conclusions. (3) The data that were reduced will provide
an overview of the conditions and situations of developing SMEs and make it easier for
researchers to collect further data related to the efforts made to increase business pro-
ductivity. (4) The data was then coded on certain aspects in order to make it easier for
researchers to describe the situation and conditions of SMEs according to the focus and
research objectives to be achieved. After the data were reduced, the next step was to display
the data: (1) Quantitative data were presented in tables and graphs to organize the data
and arrange them in a pattern in order to facilitate understanding, interpretation, and
analysis. (2) Qualitative data were presented in the form of brief descriptions, charts, and
relationships between categories in relation to the theory used as a reference according
to the focus and objectives to be achieved in this study. (3) The data were presented in
text and narrative form to facilitate understanding. (4) Data were displayed using letters
and numbers arranged sequentially so that the structure is easy to understand. Thus, this
research is first broad but later focused. Thus, the stages of data analysis were carried out
by combining qualitative and quantitative approaches, namely, domain analysis, taxonomy,
components, and cultural theme analysis.
J. Open Innov. Technol. Mark. Complex. 2021, 7, 20 12 of 37

In order to answer research questions on how economic growth works as a determi-

nant of increasing the productivity of small and medium enterprises, we used the location
quotient analysis method and shift-share analysis. Location quotient (LQ) analysis was
used to determine the degree of specialization of economic sectors that take advantage of
the base sector or leading sector. Meanwhile, shift-share was used to determine (1) the shift
in the economic structure of Makassar City, influenced by the shift in the economy of
South Sulawesi Province, (2) proportional shift growth in the gross value added of a sector
compared to the total sectors in South Sulawesi Province, and (3) the differential shift or
competitive position that shows the difference in the economic growth of Makassar City.
The analytical formulations used are as follows:

LQ = Si /Ni = S/N = Ni /N (2)

R1 = (Si /S) × 100%/(Ni /N) × 100% (3)

R2 = (Si /Ni ) × 100%/(S/N) × 100% (4)
PEK = KPN + KPP + KPK (5)
where (1) Si is the total production i in the sub-region, Ni is the total production i in
all regions, S is the entire production in the region, and N is the entire production in
the entire region; (2) PEK is changes in city income, KPN is a component of provincial
growth, KPP is a component of proportional growth, and KPK is a component of city
competitiveness growth. We used these equations to answer the research question “How
does economic growth work as a determinant of increasing the productivity of small
and medium enterprises?” Furthermore, quantitative analysis was used in this study to
determine the influence of X1 (government support), X2 (venture capital support), and X3
(human resource capacity) on the development of SMEs. The influences between variables
were tested using multiple linear regression method with the following formulations:

Y = a + b1 X1 + b2 X2 + b3 X3 + . . . bn Xn (6)

where Y is the dependent variable, X (1, 2, 3 . . . ) is the independent variable, a is a constant

value, and b (1, 2, 3 . . . ) is the regression coefficient value. The use of a constant value
is statistically carried out if the units of the variable X (independent) and Y (dependent)
have the same unit. The value of the constant value will then be ignored assuming that
changes in the Y (dependent) variable will be proportional to changes in the variable X
(independent). Furthermore, to determine the values of ‘a’ and ‘b1 ’, ‘b2 ’, and ‘b3 ’, a multiple
linear regression equation is used.

SY = an + b1 SX1 + b2 SX2 + b3 SX3 + . . . bn Sn (7)

SX1 Y = aSX1 + b1 SX1 2 + b2 SX1 X2 + . . . bn SXn (8)

SX2 Y = aSX2 + b2 SX1 X2 + b2 SX21 2 + . . . bn SXn 2 (9)
To calculate the values of ‘a’, ‘b1 ’, ‘b2 ’, and ‘b3 ’, the multiple linear regression equation
can be formulated, namely, nx − 1, where nx is the number of independent variables (X).
Furthermore, we answer the third research question, namely how to improve business
productivity and SMEs sustainability strategies, using a SWOT analysis. SWOT analysis
consists of strengths, weaknesses, opportunities, and threats. This analysis will logically
maximize strengths and opportunities, which are simultaneously used to minimize weak-
nesses and threats. The SWOT analysis matrix is presented in Table 2 below.
J. Open Innov. Technol. Mark. Complex. 2021, 7, 20 13 of 37

Table 2. SWOT analysis matrix.

Internal Factors External Factors

Opportunity (O) Threat (T)
Identification of Factor
Determine the opportunity factors Determine the threat factors
Strength (S) Strategy (SO) Strategy (ST)
Determine the program that Determine the programs that
External Factors Determine the strength factors emerges by matching strength (S) emerge by matching strength (S)
with opportunity (O) with threat (T)
Weakness (W) Strategy (WO) Strategy (WT)
Determine the emerging program Determine the emerging program
Determine the factors of weakness by matching weakness (W) by matching weakness (W)
with opportunity (O) with threats (T)
Source: Rangkuti [47].

Explanations related to SWOT analysis (see Table 2) used in this study include (1) the
interaction between strength factors and opportunity factors (S–O interactions), based on
the principle of “using strength to take advantage of opportunities”; (2) the interaction
between factors of strength with threat factors (S-T interactions), based on the principle
of “using force to avoid or overcome threats”; (3) the interaction between the factors
of weakness with opportunities (W–O interactions), based on the principle of “taking
advantage of opportunities” or “taking advantage of opportunities with weaknesses”;
(4) the interaction between the factors of weakness with threat factors (W–T interactions),
based on the principle of “minimizing weaknesses and avoiding threats”. The grouping of
strategic issues can be divided into four categories: (1) S–O interactions, commonly called
the “aggressive strategy”, which will generate strategic issues in the comparative advantage
group, which is the advantage of SMEs; (2) S–T interactions, commonly known as the
“action diversification strategy”, which will generate strategic issues in the mobilization
group, which are efforts to mobilize the power possessed; (3) W–O interactions, commonly
known as the “stabilization strategy or rationalization strategy”, which will produce two
possible options: doing something (investing) or doing nothing (divesting); and (4) W–T
interactions, commonly called “defensive or survival strategies”, which can control losses
or avoid possible destruction. The process of combining the qualitative and quantitative
research in this study is illustrated in Figure 3 below.

4. Results
4.1. Determinants of Economic Growth and Technological Innovation
The economic growth of Makassar City illustrates that the achievement of develop-
ment targets has not been able to boost the productivity of community economic enter-
prises in a sustainable manner. SMEs are crucial for local economic development, playing a
noteworthy role in job creation, poverty alleviation, and economic growth [48,49]. These
indicators are reviewed based on the following: (1) government regulations, policies, and
programs have not directly contributed to the empowerment of SMEs; (2) limited manage-
ment resources, technological innovation, institutions, and access to potential markets; and
(3) a legal and political framework is absent, which is an important basis for the empow-
erment of SMEs, especially the micro business sector. These three things prevent SMEs
from positively contributing to economic growth and to Makassar City’s Gross Regional
Domestic Product.
There are a high number of laborers without adequate employment opportunities
and thus there is increasing unemployment. Thus, it is likely that it will be difficult to
achieve long-term economic and social outcomes [50]. Thus, creativity and technological
innovation efforts are needed in the development of SMEs supported by government
policies. The Industrial Revolution and the global economy have advanced rapidly due
J. Open Innov. Technol. Mark. Complex. 2021, 7, 20 14 of 37

J. Open Innov. Technol. Mark. Complex. 2021, 7, x FOR PEER REVIEW 14 of 38

to technology. Furthermore, technological advances have a positive effect on economic

growth, productivity, and opportunities for new business development towards modern
(4) W–T interactions,
economic commonly
business activities called
[51,52]. This“defensive
means thatortechnological
survival strategies”, which
innovation willcan con-
encour-
trol losses or avoid
age increased possible
productivity in destruction.
SMEs. Economic The activity
process sectors
of combining
that arethe qualitative
expected and
to absorb
quantitative research
productive labor in this study
in Makassar City is
areillustrated
presentedininFigure below.
Table 3 below.

Figure 3. The process of combining qualitative and quantitative approaches.

approaches. Source: author’s elaboration.

4. Results
4.1. Determinants of Economic Growth and Technological Innovation
The economic growth of Makassar City illustrates that the achievement of develop-
ment targets has not been able to boost the productivity of community economic enter-
prises in a sustainable manner. SMEs are crucial for local economic development, playing
J. Open Innov. Technol. Mark. Complex. 2021, 7, 20 15 of 37

Table 3. The basic and non-basic economic sectors of Makassar City.

Location
Number Business Field Growth (%) Quotient (LQ) Information
Value
1 Agriculture, Forestry, and Fisheries 5.76 0.046 Non-Base
2 Mining and Excavation −10.08 0.000 Non-Base
3 Processing Industry 11.18 2.804 Base
4 Procurement of Electricity and Gas 8.63 0.656 Non-Base
5 Water Supply, Waste Management, and Waste and Recycling −0.40 2.924 Base
6 Construction 13.05 0.300 Non-Base
7 Wholesale and Retail Trade and Car and Motorcycle Repair 14.99 2.712 Base
8 Transportation and Warehousing 10.55 1.364 Base
9 Provision of Accommodation, Food, and Drink 7.61 3.021 Base
10 Information and Communication 9.47 2.698 Base
11 Financial Services and Insurance 6.88 3.377 Base
12 Real Estate 7.08 2.088 Base
13 Company Services 14.04 5.554 Base
14 Government Administration 10.86 1.626 Base
15 Education Services 25.41 3.694 Base
16 Health Services 11.98 2.831 Base
17 Other Services 13.36 4.063 Base
Source: analysis results.

Our interpretations are as follows: (1) the economic base sector consists of 13 economic
business fields, and (2) the non-basic sector includes four economic business fields. These
results confirm that the economic growth of Makassar City can drive the economy and
contribute positively to increasing regional revenue, but it has not been integrated with
the SMEs developed in the community. Thus, an economic policy from the government is
needed through strategic programs that favor SMEs. With the globalization of the knowl-
edge economy, national economic growth depends ever more on the efficiency of innovation
systems in stimulating the creation, dissemination, and use of knowledge. Technological
innovation is the main motivation in the evolutionary process of economic structures
towards economic development [53]. Furthermore, strategic efforts that can be made to
support the development of SMEs in Makassar City are as follows: (1) the empowerment
of economic enterprises; (2) business training and guidance towards the use of technology;
(3) financial management training and business capital support through formal financial
institutions; and (4) access to product marketing to reach potential markets. These will
require cooperation between the government, the private sector, and business actors. The
growth of the economic activity sector and its contribution to the Gross Regional Domestic
Product of Makassar City is presented in Table 4 below.

Table 4. The economic growth of Makassar City.

Economic Growth
Number Business Field Component of Component of Component of
Change in
Economic Proportional Economic
Income
Growth Growth Competitiveness
1 Agriculture, Forestry, and Fisheries 1,057,065.14 −924,868.15 (116,439.18) 144,713.07
2 Mining and Excavation 2535.45 −2437.21 (1335.13) (489.89)
3 Processing Industry 37,082,199.82 −33,649,482.60 (4,268,916.21) 6,097,189.86
4 Procurement of Electricity and Gas 51,791.24 −43,041.99 7426.57 17,949.59
Water Supply, Waste Management,
5 401,717.48 −348,324.39 (40,639.64) 55,452.16
and Waste and Recycling
6 Construction 31,192,545.21 196,836,957.61 225,597,340.43 9,175,035.17
Wholesale and Retail Trade and Car
7 33,301,407.04 −25,985,279.96 5,768,581.09 10,844,389.58
and Motorcycle Repair
8 Transportation and Warehousing 4,776,005.49 −3,911,636.66 239,383.12 1,152,235.06
J. Open Innov. Technol. Mark. Complex. 2021, 7, 20 16 of 37

Table 4. Cont.

Economic Growth
Number Business Field Component of Component of Component of
Change in
Economic Proportional Economic
Income
Growth Growth Competitiveness
Provision of Accommodation, Food,
9 4,254,246.59 −3,269,843.19 428,927.40 1,027,590.73
and Drink
10 Information and Communication 16,152,629.86 −12,721,275.80 2,080,467.11 4,659,740.42
11 Financial Services and Insurance 10,880,166.30 −9,30,085.98 476,713.53 2,875,300.57
12 Real Estate 7,874,489.85 −7,068,948.51 (1,111,907.63) 1,012,762.68
13 Company Services 2,165,789.77 −1,775,437.19 121,757.94 537,327.08
14 Government Administration 6,731,082.21 −6,079,316.11 (585,154.99) 1,267,812.03
15 Education Services 16,637,165.49 −13,639,381.72 844,884.66 4,038,030.98
16 Health Services 4,924,974.78 −4,054,936.77 428,832.14 1,391,448.53
17 Other Services 4,764,170.18 −3,683,495.79 786,903.66 1,479,045.95
Source: analysis results.

Our interpretations are as follows: (1) the dominant components of Makassar City’s
economic growth are the wholesale and retail trade sector and the car and bicycle re-
pair sector; (2) the dominant proportional growth component is in the construction sec-
tor; (3) the dominant component of economic competitiveness is in the construction sec-
tor; (4) changes in the income of Makassar City are predominantly influenced by the
trade, construction, processing industry, information and communication, and education
services sectors.
Furthermore, increasing the economic productivity of SMEs will require an adaptation
in the use of technology. Business strategy and organizational behavior require dynamic
adaptation and flexibility in responding to a changing business environment [54,55]. Field
facts that are found show that there are significant differences in various types of busi-
nesses that develop in communities that take advantage of technological innovations. This
condition is marked by a shift in normative space and the rationalization of actions in
developing economic business activities. The development of small business activities has
a tendency, to shift, while medium enterprises have a tendency to be balanced. These two
types of SMEs are then followed by the rationalization of actions. A comparison of the
process of shifting normative space and the process of rationalizing actions in relation to
the adaptation to technology utilization is described in Table 5 below.

Table 5. A comparison of the processes of business adaptation, shifting normative spaces, and rationalizing actions.

Comparison of the Shift

The Process of Adapting to in Normative Space
Number Description Economic Enterprises and the Process of
Rationalizing Actions
Small Medium Small Medium
1 Investment and technology development Low Upper Low Upper
2 Shifting of normative space Moderate Upper Moderate Upper
3 The process of rationalizing actions Moderate Upper Moderate Upper
4 Efforts to increase production Low Moderate Low Moderate
5 Human resource capacity and competence Low Moderate Low Moderate
6 Business diversification Low Upper Low Upper
7 Ability to reach potential market Low Moderate Low Moderate
Source: primary data and analysis results.

Table 5 provides an overview of the differences in the adaptive capacity and techno-
logical innovation of SMEs. Interpretations can be made regarding this process. First, the
economic growth of Makassar City has an impact on business transformation, investment
development, technological innovation, and the management of SMEs. Medium-sized
J. Open Innov. Technol. Mark. Complex. 2021, 7, 20 17 of 37

economic enterprises are categorized as upper. This process is closely related to the support
of investment, technology, modern business management, and cooperation in investment
within the framework of controlling production factors based on economic motivation
and business opportunities. In small businesses that are informal, the development of
investment, technology, and business management is categorized as low. This condition is
influenced by the ability of the business to access sources of business capital. Likewise, the
investment network is also very limited, and the ability to master technology is still rela-
tively simple. The economic business pattern that has been developed tends to be simple
and aimed only at meeting subsistence needs and is more independent in nature. At the
micro, small, and medium enterprise level, the transition process has a direct relationship
with employment status, wages, job security, job and career mobility, participation, and
satisfaction with job outcomes [56–59].
Second, the shift in normative space also shows differences in relation to the proce-
dures for production and the business being developed. The shift in normative space in
medium-sized economic enterprises is categorized as upper. This condition occurs as a
result of the production procedures and work systems that are carried out contractually and
collectively based on an individual’s ability to reach a position. This means that position
and status are largely determined by the adaptive capacity of the individual in the medium
economic enterprise work system. Furthermore, in small economic enterprises, the shift in
normative space is categorized as moderate. This condition occurs due to the influence of
values and traditions that are still quite strong, so that the principles of togetherness and
kinship are used as the basis for developing economic business. Thus, the development of
a developed economic enterprise does not directly affect how production is carried out,
nor does the position and status of the business tend to be constant. Even though there has
been a polarization in the economy, its effect is not significant. Social polarization occurs
when income inequality between groups occurs in an economic enterprise [60,61].
Third, the adaptation process in relation to the economic growth of Makassar City
is followed by the rationalization of actions by SMEs. In small economic enterprises, the
rationalization of the actions shown is categorized as moderate. This condition occurs
due to the influence of business capital and limited human resources. This means that
economic efforts are developed more for prosperity and motivation. Furthermore, different
conditions are shown in medium-sized economic enterprises, in the sense that medium-
sized economic enterprises developed in the community are perfectly structured. Complex
adaptive systems consist of a multitude of agents from whose individual adaptation efforts
the adaptive behavior of the system as a whole emerges. At the level of the individual
agent and the level of the system as a whole survival depends on proper adaptation to
the environment [62,63].
Fourth, the economic growth of Makassar City is related to efforts to increase produc-
tion by SMEs. In small economic enterprises, the effort to increase production is relatively
stagnant in the low category, while in medium economy businesses there is a tendency to
follow market demand in the medium category. This means that business differentiation
developed in the community is closely related to the ability of capital and efforts to build
product marketing networks.
Fifth, the economic growth of Makassar City in relation to human resource capacity is
closely related to the type of business being developed. Small economic enterprises tend to
use family and relatives with inadequate educational backgrounds as workers. Meanwhile,
medium-sized economic enterprises tend to utilize workers who have sufficient expertise
and skills. This difference illustrates that capital capacity, business management systems,
and business classifications play an important role in the use of human resources as labor
in SMEs. The innovation strategy is more focused on developing business management to
support increased productivity and product marketing [64]. Furthermore, innovation is the
willingness to go beyond the current best conditions and pursue new opportunities, such
as introducing new ideas from established practices and trying to do more than existing
businesses, with new product designs being innovations for each business unit [65,66].
J. Open Innov. Technol. Mark. Complex. 2021, 7, 20 18 of 37

Thus, capital capacity, business management systems, business classifications, and human
resources play an important role in business development and increasing productivity
towards sustainable product marketing.
Sixth, the economic growth of Makassar City in relation to business diversification
shows differentiation based on the category of community economic business types. In
small economic enterprises, business diversification is in a stagnant condition and has not
changed fundamentally. Meanwhile, medium-sized economic enterprises have a tendency
to follow consumer demand and developing situations. They tend to build innovations
based on the demands of consumer needs.
Seventh, the economic growth of Makassar City in relation to SMEs has limitations in
responding to and reaching potential markets. In small businesses, a business is closely
related to the ability to ensure consumer satisfaction with their products. The technology
used is relatively simple, and the market potential is limited. Meanwhile, medium-sized
enterprises have the ability to build networks in the product marketing system and use
modern technology. Thus, the differentiation of SMEs is strongly influenced by an ability to
build product marketing networks and by a mastery of technology. The actual conditions
for the accumulation of capital are quite different from those prevailing for individual
capital and simple reproduction [67]. The creative industry is now a topic of great publicity,
not only because the industry is developing in many countries because of the industry’s
peculiarities that are no longer based on economic issues (low prices), but also because
shifts to the creative aspect and product differentiation strategies (vertical and horizontal)
affect the operational performance of the SME industry significantly and negatively [68–70].

4.2. Government Policies in the SME Sector

The economic structure of Makassar City is predicted to enter the recovery phase,
meaning that recovery efforts will begin to move, in relation to the development of SMEs.
Economic improvement is focused on five strategic sectors: tourism, micro and SMEs,
labor, investment, and fisheries. The Makassar City Government also needs to resolve
seven sub-sector problems related to the pandemic: (i) accommodation, (ii) food businesses,
(iii) transportation, (iv) warehousing, (v) the processing industry, (vi) construction, and
(vii) financial services. The assumption is that if the five sectors are able to grow posi-
tively it will boost the economic growth of Makassar City. Furthermore, two things can
be developed to encourage the improvement of people’s welfare: (1) human resources
with high competence and (2) science and technology in line with needs. This means
that human resource competence is a combination of several variables: skills, personal
attributes, knowledge level, and work behavior. Problem solving competence is one of
the main competencies that the community must equip during the era of the Fourth In-
dustrial Revolution and is focused on the skills of workers needed in the context of the
workplace community [71].
The formulation of development policies towards economic growth will require
(1) managerial competence, which is related to (i) the ability to manage the workforce,
(ii) the ability to build networks for problem solving, and (iii) powerful leaders with
the ability to build communication, as well as (2) technical competence, the functional
capacity for a job. The development of human resources based on the mastery of technology
is directed at the development of material values, but more towards the fundamentals,
namely, cultural development. This means that a mastery of science and technology will be
successful if it is deeply rooted in the culture of a society. Thus, several actions are required:
(a) building cooperation and being responsive to change, (b) being rational and objective,
and (c) appreciating, motivating, and building a creative and innovative atmosphere. These
are prerequisites for the development of high-quality and competent human resources.
Further, if a company fails to properly manage and nurture employees, they may leave
the company, which may have significant implications in highly sensitive areas, such as
business strategy, goal achievement, company culture, and employee morale [72].
J. Open Innov. Technol. Mark. Complex. 2021, 7, 20 19 of 37

The development of SMEs based on technological innovation in Makassar City re-

quires efforts to rearrange policies, including: (1) licensing and progressive manufacturing
patterns that are oriented towards the introduction and mastery of superior product-
based technology; (2) building technological models, mastering more advanced production
techniques, and continuing a pattern of integrating technological components into new
products; (3) designing new, superior products after technology integration, by building
products independently; (4) determining the market, in the sense that the government pro-
vides incentives and investment for the marketing of products developed in the community,
especially in SMEs. In addition, entrepreneurs are advised to form an innovation-oriented
J. Open Innov. Technol. Mark. Complex.strategy
2021, 7, x FOR PEER REVIEW
to advance cultural heritage innovation, and to strengthen the accumulation 20 of
of in-
38
novative resources and capabilities [73]. The functional coordination of market orientation,
business culture, and the sharing economy with consumer orientation has a significant ef-
fect on of
effect product innovation,
competitive but the effect
orientation of competitive
on product orientation
innovation is notonsignificant
product innovation
[74]. Re-
is not significant [74]. Respondents’ perceptions of various programs implemented
spondents’ perceptions of various programs implemented by the government to support by the
government to support the development of SMEs
the development of SMEs are shown in Figure 4 below. are shown in Figure 4 below.

160 400
140
140 350 350 125 350 350 350
120 123
Business actor response

120 300

100 250
78 74
80 200
60
54
60 48 150
135 136 45
40
35 34.29 35.71 35.14
40 100 100 102 100 105 100 100
20 22.29 21.15
17.14 15.43 13.71
20 10 12.86 50
38.57 5.71 38.86 29.14 30
0 0
Very good Good Pretty good Not good

Creation of new entrepreneurs Business assistance Product marketing Business capital support Total

Figure 4.
Figure 4. Respondents’
Respondents’ perceptions
perceptions of
of the
the role
role and
and support
support of
of government
government policies
policies in
in the
the development
development of
of SMEs.
SMEs. Source:
Source:
primary data.
primary data.

Figure
Figure 44 shows
showsthe theresponse
responseofof SMEsSMEs to government
to government policies
policies in business
in business develop-
development.
ment.
The The interpretations
interpretations are asare as follows:
follows: (1) Government
(1) Government policypolicy
supportsupport in terms
in terms of busi-
of business
ness capital
capital supportsupport is 38.57%.
is 38.57%. (2) Government
(2) Government policypolicy
supportsupport in relation
in relation to thetoassistance
the assistance
and
and empowerment process for SME is 34.29%. (3) Government
empowerment process for SME is 34.29%. (3) Government policy support in relation to policy support in relation
to
thethe creation
creation of of
newnew entrepreneurs
entrepreneurs isis10.00%.
10.00%.(4) (4)Government
Governmentpolicy policysupport
support in in relation
relation
to SME product marketing is 17.14%. The results of the field confirmation
to SME product marketing is 17.14%. The results of the field confirmation show that the show that the
government
government policies
policiesrelated
relatedtotoMSME
MSMEdevelopment
development that have
that been
have implemented
been implemented have not
have
produced
not produced optimal results.
optimal Some Some
results. of the of factors that influence
the factors this condition
that influence are as follows:
this condition are as
(1) weak(1)
follows: coordination
weak coordinationbetweenbetween
agenciesagencies
in managing SMEs; (2)
in managing inadequate
SMEs; supportsup-
(2) inadequate for
human
port for resource capacitycapacity
human resource and insufficient professionalism
and insufficient in managing
professionalism economic
in managing enter-
economic
prises; (3) a sub-optimal
enterprises; (3) a sub-optimal abilityability
to organize SMEs;SMEs;
to organize and (4) an (4)
and ineffective fostering
an ineffective of SMEs
fostering of
in relation
SMEs to the various
in relation programs
to the various implemented
programs by the government.
implemented by the government.This means Thisthat
meansthe
implementation of government
that the implementation policies policies
of government has not hasbeen effective
not in encouraging
been effective the devel-
in encouraging the
opment
developmentof SMEs in Makassar
of SMEs City. Thus,
in Makassar the role
City. Thus, theofrole
government
of governmentis veryisimportant to in-
very important
to integrate
tegrate strategic
strategic programs
programs towards
towards increasing
increasing the productivity
the productivity of SMEs.of SMEs.
The mix Theofmix
policyof
policy
optionsoptions will depend
will depend on a numberon a number
of factorsofincluding
factors including societal attitudes
societal attitudes towards
towards entrepre-
entrepreneurship,
neurship, the structurethe structure of the workforce,
of the workforce, the size and therole
sizeofand role of government,
government, the prevalence the
prevalence
of existing of existing
levels levels of entrepreneurial
of entrepreneurial activity, and activity, and the conditions
the conditions of SMEs of SMEs
[75]. The[75].
re-
The responses
sponses of SMEs of SMEs
to thetoperformance
the performance of programs
of programs implemented
implemented by the by government
the government are
are presented
presented in Figure
in Figure 5 below.
5 below.

140
130
125
120 115 116
110 108
ctor response

100 98
89
80 79 81
74 72
 opment of SMEs in Makassar City. Thus, the role of government is very important to in-
tegrate strategic programs towards increasing the productivity of SMEs. The mix of policy
options will depend on a number of factors including societal attitudes towards entrepre-
neurship, the structure of the workforce, the size and role of government, the prevalence
J. Open Innov. Technol. Mark. Complex.of existing
2021, 7, 20 levels of entrepreneurial activity, and the conditions of SMEs [75]. The
20 ofre-
37
sponses of SMEs to the performance of programs implemented by the government are
presented in Figure 5 below.

140
130
125
120 115 116
110 108
Business actor response

100 98
89
80 79 81
74 72
60 64

46 45 48
40 33.14 37.14
32.86 31.43 35.71
30.86 28 25.43
20 22.61 23.14 21.14 20.57
13.14 12.86 13.71 18.29
0
J. Open Innov. Technol. Mark.
VeryComplex.
good 2021, 7, x FOR PEER REVIEW
Good Pretty good Not good 21 of 38

Empowerment of economic enterprises Program implementation Easy access to information Business training program

Figure 5. 5.
Figure Respondents’ perceptions
Respondents’ of of
perceptions thethe
performance ofof
performance government programs
government inin
programs SMEs. Source:
SMEs. primary
Source: data.
primary data.

Interpretations
Interpretations that
that can
can bebe proposed
proposed regarding
regarding thethe performance
performance of of government
government pro-pro-
grams
grams (Figure
(Figure 5) 5) related
related to the
to the development
development of SMEs
of SMEs in Makassar
in Makassar City City
are asare as follows:
follows: (1)
(1) 49.42%
49.42% statedstated
that that the economic
the economic empowerment
empowerment of SMEs
of SMEs waswasnotnot
yetyet optimal;
optimal; (2)(2) 46.57%
46.57%
stated that the implementation of the SME development program
stated that the implementation of the SME development program was not yet effective; was not yet effective;
(3)(3) 48.57%stated
48.57% statedthat
thatit itwas
wasstill
stilldifficult
difficulttotoaccess
accessinformation
informationrelated
related to
to business
business oppor-
opportu-
nities; and (4) 55.43%
tunities; 55.43% stated
statedthat
thatthethetraining
trainingprograms
programsimplemented
implementedbybythe thegovernment
government
were
were not
not effective
effective ininsupporting
supporting thedevelopment
the development ofofSMEs.
SMEs.Thus,
Thus, the
the performance
performance ofofthethe
implementation
implementation ofof government
government programs
programs toto encourage
encourage thethe development
development ofof SMEs
SMEs has
has notnot
been
been optimal
optimal inin supporting
supporting increased
increased productivity
productivity inin community
community economic
economic enterprises.
enterprises.
This means that the role of SMEs has not played an important
This means that the role of SMEs has not played an important role in supporting the eco- role in supporting the
economic growth of Makassar City. This means that the existence
nomic growth of Makassar City. This means that the existence of SMEs has not been well of SMEs has not been
well organized,
organized, including
including the coaching
the coaching process,process,
which which
has nothas beennotcarried
been carried out optimally.
out optimally. Un-
Unlike
like large large corporations,
corporations, SMEsSMEshave ahave a superior
superior flexibility
flexibility to technical
to technical shifts, shifts,
a higher a higher
pro-
promotion
motion of income
of income distribution,
distribution, and better
and better adaptability
adaptability to fluctuations
to fluctuations in the in the market
market and
new customer requirements, while their organizational structure allows for quickerquicker
and new customer requirements, while their organizational structure allows for deci-
decision
sion making making [76]. types
[76]. The The types of economic
of economic development
development andand empowerment
empowerment expected
expected byby
SMEs are presented in Figure
SMEs are presented in Figure 6 below. 6 below.

140
125

120

100
89
85 85
80
Business actor response

80 82 76
69 70 68
65 64 64 65
70
60 63
55 54 55

35.71
40
22.86 24.29 25.43
19.71 18.29 20 18.29 19.43 18.57
20 21.71
18.57 20 24.29 15.71 18 16 17.71
23.43 15.43
4.57
0
Urgently require Need Simply need No need

Financial management Business product improvement training Strengthening human resource capacity

Business capital assistance Business management

Figure 6. 6.
Figure SMEs economic
SMEs development
economic and
development empowerment
and efforts.
empowerment Source:
efforts. primary
Source: data.
primary data.

Interviews related to economic development and empowerment (Figure 6) with SME

entrepreneurs in Makassar City showed the following: (1) 45.14% stated that SMEs were
oriented towards fostering business management; (2) 35.71% preferred business capital
support for the development of SMEs; (3) 36.58% prioritized strengthening the capacity
of human resources for the development of SMEs; (4) 42.86% chose business product im-
provement training; and (5) 39.71% chose financial management to support the increased
J. Open Innov. Technol. Mark. Complex. 2021, 7, 20 21 of 37

Interviews related to economic development and empowerment (Figure 6) with SME

entrepreneurs in Makassar City showed the following: (1) 45.14% stated that SMEs were
oriented towards fostering business management; (2) 35.71% preferred business capital
support for the development of SMEs; (3) 36.58% prioritized strengthening the capacity
of human resources for the development of SMEs; (4) 42.86% chose business product
improvement training; and (5) 39.71% chose financial management to support the in-
creased productivity of SMEs. Therefore, SMEs in Makassar City need stimulant support
and conformity with government policies. This means that the existence of SMEs will
require coaching support related to business resilience, business competitiveness, market-
ing strategies, and mastery of technology in the era of globalization [77]. The influence of
government policies, business capital support, and strengthening human resource capacity
on the development of SMEs is presented in Table 6 below.

Table 6. A summary of the test results for the significance of the regression equation coefficient.

Coefficient
Correlated Variables Error t-Count t-Table Information
Value
Government policy for SME development (rx1 y) 0.192 0.069 2.873 1.92 Significant
Business capital support for SME development (rx2 y) 0.137 0.052 2.853 1.92 Significant
Strengthening human resources for the development of SMEs (rx3 y) 0.405 0.096 4.182 1.92 Significant
R R2 db1 db2 F-count F-table
0.988 0.976 3 6 84,813 4.76

Interpretations of these results are as follows: (i) government policy has a positive
effect on the development of SMEs, with a value of 19.2%; (ii) support for business capital
has a positive effect on the development of SMEs, with a value of 13.7%; (iii) human resource
capacity strengthening has a positive effect on the development of SMEs, with a value
of 40.5%; (iv) strengthening government policies, business capital support, and human
resource capacity simultaneously has a positive effect on the development of SMEs, with a
determination coefficient of 97.6% on SME development. Thus, SMEs will develop rapidly if
supported by government policies, access to business capital, and human resource capacity
strengthening. Thus, it is imperative for companies to demonstrate proactive behavior
and to intensify their actions to support the achievement of a “sustainable future” [78].
Furthermore, organizations face various challenges and opportunities. However, today’s
business environment is changing at a faster pace than before, and organizations must
constantly adapt to new conditions [79].

4.3. Existence of SMEs

The existence and improvement of the productivity of SMEs in Makassar City requires
efforts to develop and protect their business environment. Basically, SMEs interact directly
with the community, especially the middle to lower economy. Three factors cause SMEs
to survive in a situation of economic uncertainty, among others: (1) community needs, in
the sense that the dominant small businesses developing in Makassar City are needed by
the community; (2) a cheaper selling price of products, in the sense that the sale of goods
marketed is affordable by the public; (3) the absence of a direct relation to the stock index
and dollar exchange rate. SMEs do not own shares, and the economic transactions that are
built up do not involve dollars. This means that, even if the rupiah weakens and the stock
index decreases, SMEs remain stable and run normally. Thus, SMEs integrate social and
environmental goals into a business model, incorporate accountability mechanisms, and
leverage and pool the resources needed to be economically competitive [80]. Furthermore,
in order to support the sustainability of SMEs, it is very important to consider several
principles, namely economic prosperity, community welfare, and environmental promotion
in the developed business products [81].
J. Open Innov. Technol. Mark. Complex. 2021, 7, 20 22 of 37

Field findings show that the role of SMEs in Makassar City has not been able to in-
crease business productivity and increase community welfare. Four factors have a positive
effect on the productivity development of SMEs: (i) technology innovation, (ii) business di-
J. Open Innov. Technol. Mark. Complex. 2021, 7, x FOR PEER REVIEW 23 of 38
versification, (iii) product marketing, and (iv) business stability. The survey results on these
four parameters in relation to the SMEs in Makassar City are presented in Figure 7 below.

A. Small and medium enterprise technology

80 70
65
55 58
60
40
Total

40 30 32
18.6 16.6 20
20 8.6 9.1 11.4 15.7

0
Mastery of technology Percentage (%)

Food Drink Clothes Handycrafts Creative economy Printing Cafes and restaurants

B. Diversification of economic ventures

Business diversity
100
80 55
60 (F)

95 4015.71
Business expansion 80 Business segment
20
27.14 22.86
0

10
24.29
35
Percentage
(%)
85
Product diversity Market share

C. Marketing of business products

14.28
12.86
Percentage (%) 17.14
11.43
24.29
20

50
45
(F) 60
40
85
70

0 10 20 30 40 50 60 70 80 90

Distribution of goods Business expansion Service to consumers Promotions made Product selling price Products according to consumer needs

D. Stability of small and medium enterprises

Financial ability
100
80
Business management 72 60 41 Sales balance
40 82
20
0
45 58
Business location stability Ability to protect the market
52

Inventory

(F) Percentage (%)

Figure 7. Examples
Figure 7. Examples of SMEs:of(A) SMEs: (A) technological
technological innovation,
innovation, (B) (B) business
business diversification, (C)
diversification, (C) product
productmarketing,
marketing,andand
(D)
business stability. Source: primary
(D) business stability. Source: primary data. data.
J. Open Innov. Technol. Mark. Complex. 2021, 7, 20 23 of 37

Figure 7A shows the differences in the technological mastery of SMEs. Three types of
businesses can develop technological innovation: (i) cafe and restaurant business by 20%,
(ii) the creative economy by 18.6%, and (iii) printing businesses by 16.6%. These results
illustrate that technological innovation in SMEs in Makassar is still relatively low. The
informants illustrate that a weak mastery of technology in SMEs is influenced by several
factors, including (1) limited capabilities and expertise, (2) high operational costs, and
(3) unsupportive market guarantees for developing technology-based businesses. Thus,
the relatively low mastery of technology in SMEs is positively associated with business
innovation and sustainable product development. Due to resource constraints and fierce
competition, it is relatively difficult for small firms to achieve product innovation and gain
sustainable development independently [82].
Figure 7B shows the differences in the diversification of SMEs in Makassar City. Three
categories of effort increase business productivity: (i) business expansion, with a value of
27.14%, (ii) product diversity, with a value of 24.29%, and (iii) the development of business
segmentation, with a value of 22.86%. These results confirm that SMEs in Makassar City
can develop business diversification and new business patterns in a sustainable manner.
Thus, SMEs should start adopting more sustainable behaviors and a long-term vision to
design environmentally and organizationally sustainable processes [83].
Figure 7C shows product marketing efforts undertaken by SMEs. Three interpretations
can be put forward: (i) the selling price of a product needs to compete with similar
products by 24.29%, (ii) selling a product must be according to consumer needs by 20%,
and (iii) service must be given to consumers by 17.14%. These results confirm that SMEs
can market their products, even in limited quantities, and only need to meet local needs.
Accordingly, SMEs need to adopt survival strategies and strategic methods to confront
various global challenges [84].
Figure 7D shows the stability of SMEs developing in Makassar City. Three interpreta-
tions that can be proposed: (i) stability can be maintained based on an ability to manage a
business, with a value of 20.57%, (ii) 23.43% is determined by sales proceeds and the ability
to generate profits or sales balances, and (iii) 16.57% is determined by an SME’s ability to
maintain market and consumer confidence. These results confirm that SMEs can maintain
economic stability and the economic businesses that are developed. In most countries,
SMEs play a key role in promoting sustainable economic growth and job creation [85].

4.4. Strategy for Increasing Business Productivity and Product Marketing

The development of SMEs in Makassar City tends to increase from time to time,
but the use of technology has not been optimal for increasing business productivity and
achieving optimal labor absorption. The productivity of SMEs is directly related to several
factors, including (1) selection of the right location, which depends on the business being
developed; (2) the use of social media, which is a strategic choice in terms of product
marketing; (3) business innovation, so as to compete with other SMEs; and (4) financial
planning, with a good administration system. Mistakes in financial management will have
an impact on losses. Another advantage of having well-organized financial records and
reports is that they can be used as supporting documents in applying for business loans.
Thus, government policy support and intervention are needed for the development of
SMEs, as this can help SMEs in mastering technology, improving product quality, business
management, and human resource capacity strengthening [86]. Strategies for increasing
the productivity and marketing of SMEs are presented in Table 7 below.
J. Open Innov. Technol. Mark. Complex. 2021, 7, 20 24 of 37

Table 7. Strategies to increase the productivity and product marketing of SMEs.

Strength Weakness

• Speed to innovate and develop

• Limited business capital
economic enterprises
• Limited production and
• Have a stable and stable market
product marketing
and consumers
• Limited human resources
Internal • The price of product marketing is
• Business management is still traditional
External affordable by the community
• Business competitiveness is still low
• Ability to survive in
• Access to potential markets is
economic situations
still limited
• Ability to create jobs
• Productivity and business
• Flexibility in doing business
diversification are still low and limited
• Low operating costs

Opportunity Strategies (SO) Strategies (WO)

• Optimizing and increasing production

capacity through business capital
• Optimizing the use of funds based on support from the government and
product innovation and formal financial institutions
• Financial support from the technology utilization • Use of local raw materials to support
government and formal • Effectiveness of the use of raw business productivity and
financial institutions materials to meet market and business production
• Utilization of potential consumer needs • Strengthening the capacity of human
raw materials • Increased productivity and resources and the use of information
• Ease of access to information technology-based product marketing sources in a sustainable manner
• Technological innovation • Product marketing using • Information technology-based
• Online-based online media business management
product marketing • Strengthening business management • Increased competence of human
• Support for strengthening and product stability resources to support
business management • Develop new innovations and product competitiveness
• Human resource training develop human resource capacity • Strengthening business management
• Strengthening the capacity of human and potential market access
resources and mastery of technology • Diversification of business and
strengthening of
workforce competencies

Threats Strategies (WO) Strategies (WT)

• Product development and innovation

• Competitiveness in the global followed by increased product • Increase in production capacity based
market is still low competitiveness in the global market on modern business management
• Production capacity is • Increase in production capacity based • Build business cooperation based on
still limited on strengthening human strengthening institutional capacity
• The scale of product resource capacity • Optimizing the use of human resources
marketing is still limited • Expansion of the market area through based on a mastery of technology
• Promotion of business technological innovation and the use • Excellent product design to reach
products is still limited of social media domestic and global markets
• Production knowledge and • Strengthening human resource skills • Business diversification and
technology are still low and expertise through mastery of development of production capacity to
• Product models and technology reach potential markets in a
packaging are still limited • Product innovation, business sustainable manner.
• The use of online media for expansion, and absorption of • Increased business competitiveness
product marketing is skilled labor based on product excellence and
still limited • Development of potential market online-based product marketing
based on the use of technology
J. Open Innov. Technol. Mark. Complex. 2021, 7, 20 25 of 37

5. Discussion
5.1. Solutions for Increasing Productivity and Marketing of SME Products
The development of SMEs in the context of Makassar City will require government
support and cooperation with various parties in various aspects to encourage increased
productivity and product marketing. Several things that are needed related to efforts to
maintain the stability and existence of SMEs, among others: (1) strengthening production
capacity by subsidizing production tools and machines; (2) supporting business capital in
the form of low interest rates and competitive tax rates, enabling SMEs to remain stable in
production; (3) increasing the quality of production through tiered training efforts to im-
prove quality in terms of product design and product forms according to business quality
standards; (4) strengthening the capacity of human resources through training in terms
of product management and product packaging by utilizing environmentally friendly
technology; (5) production business management training to improve product competitive-
ness; (6) business feasibility training to obtain stimulant assistance from banks or formal
financial institutions; (7) financial management support with a modern financial admin-
istration system; and (8) the protection and expansion of marketing networks through
a startup-based business cooperation pattern based on the demands of consumers and
potential markets. These eight processes will drive economic business growth and increase
regional competitiveness through superior products that are strategic and of high economic
value. Thus, business management will be strategic within the framework of independently
developing SMEs towards business and implementing a sustainable business productivity
strategy based on product excellence and competitiveness [87]. In the era of economic
globalization, SMEs are recognized as an engine of sustainable economic development [88].
The field facts found show that limited mastery of technology, business capital, and
market access have a positive contribution to the low competitiveness of SMEs and their
contribution to the economic growth of Makassar City is not optimal. Thus, increasing
the productivity and competitiveness of small and medium enterprises requires support
for strengthening the capacity of human resources, utilizing technology and innovation
through sustainable business diversification [89]. Field findings show that four factors
cause the competitiveness of small and medium enterprises in Makassar City to be sub-
optimal in their business development, including: (i) limited business capital, (ii) low
competency of the workforce, (iii) poor business management, and (iv) limited mastery of
technology. Thus, small and medium enterprises will develop well if they have the ability
to access potential markets through government policy support followed by innovation
and business management development [90,91]. Field facts found indicate that efforts to
diversify business are not optimal and the products produced are still limited, causing
small and medium enterprises in Makassar City has not undergone significant changes.
This means that these small and medium enterprises are still faced with challenges, namely
limited access to capital, the availability of raw materials, the technology used, limited
human resources, and the role of government that is not yet optimal [92]. Furthermore, in
order to increase the productivity of these small and medium enterprises, it is necessary to
provide guidance, business training, access to capital, and support for strategic programs
from the government.
Furthermore, the efforts that need to be made to support and encourage increased
productivity of small and medium enterprises in Makassar City include: (1) increasing the
capacity and competence of the workforce; (2) adequate equipment support; (3) product
innovation; (4) business management; (5) mastery of technology; (6) business diversifica-
tion; and (7) expanding the market network. These seven things are very important to be
applied towards increasing the productivity of economic enterprises and the stability of
small and medium enterprises (SMEs). Thus, small and medium enterprises will make a
positive contribution to economic growth and job creation [93].
In the context of product marketing, SMEs need to be supported. (1) Marketing prod-
ucts through the internet and social media helps SMEs to exhibit merchandise. (2) Building
communication with various parties can help SMEs to determine market potential. This
J. Open Innov. Technol. Mark. Complex. 2021, 7, 20 26 of 37

means that SMEs will be able to understand and identify the right market for the prod-
ucts they produce. (3) Selection of the right business location is important. The location
of stalls that have business magnets that are easily accessible to potential buyers can be
considered. (4) Product marketing can be achieved through influencers. Using familiar
public figures can be used to introduce a trademark and to increase sales. (5) Product
marketing can be achieved through affiliate marketing. Promotional efforts are carried
out by building business cooperation by utilizing information technology based on online
product marketing to increase the number of consumers. (6) Discount promotions can
be implemented to entice users to re-order. (7) Marketing using social media can expand
market networks. The seven efforts related to SME optimization will require improving
product quality, human resources, digital technology-based business management, and the
ability to build partnerships through startup businesses. Technological innovation is the
driving force behind the industrial and business economy [94].

5.2. Sustainability and Stability of SMEs

Increasing the productivity of SMEs in Makassar City will require policy support
from the government and is expected to reduce the unemployment rate of the working age
population and play a role in economic growth. The role of SMEs is also expected to absorb
labor and open up profitable business opportunities. SME sustainability is oriented towards
business governance, capital support, increasing human resource capacity, and increasing
competitiveness and the marketing of business products in a sustainable manner. This
means that the role of SMEs will be a driving force for economic growth, an agent of change,
and a pioneer in saving the environment. Thus, the role of SMEs has strategic value in
encouraging regional economic growth and improving the welfare of society in general [95].
SMEs have a certain culture, and adaptability is needed in responding to healthy
economic competition, so there will be resistance. This means that it is important to
consider the risk of business, environmental, and social sustainability as a single system
in responding to the economic growth of Makassar City. For this reason, socialization
efforts are needed for SMEs related to business sustainability, protection of the business
environment and efforts to create social cohesion towards increasing community welfare,
increasing productivity, and preserving the environment around the business. Small and
medium enterprises play an important role in reducing the unemployment rate of the
productive age population [96].
The main factor that needs to be implemented to support the sustainability of small
and medium enterprises in Makassar City is to build a pattern of economic cooperation
between entrepreneurs and SMEs towards a synergy in the utilization of natural resource
potentials effectively and efficiently. This means that the development of small and medium
enterprises in Makassar City requires strategic actions, including: (1) routine guidance in
relation to efforts to strengthen the capacity of human resources who have the ability to
respond to market changes, (2) long-term business management oriented towards business
effectiveness and efficiency, (3) the use of technology; (4) the ability to innovate, and
(5) the ability to build business cooperation. Thus, the productivity of small and medium
enterprises is a potential that can be relied on to spur regional growth in a sustainable
manner [97]. Furthermore, in order to support the stability of small and medium enterprises,
it is very important to optimize the use of information technology for product marketing,
seizing business opportunities, and increasing income. These three things will have an
impact on increasing economic value added for small and medium enterprises in the
direction of improving service quality and expanding access to potential markets. This
means that small and medium enterprises will advance and develop if they have the ability
to respond to changes in the strategic environment [98].
The sustainability of SMEs in Makassar City will require several strategic steps that
need to be considered: (1) manufacturing products according to consumer needs; (2) pro-
ducing goods in small quantities to save costs and resources, in an effort to eliminate
in-process supplies of goods and waste, by using an evenly mixed production pattern;
J. Open Innov. Technol. Mark. Complex. 2021, 7, 20 27 of 37

J. Open Innov. Technol. Mark. Complex.(3) eliminating

2021, 7, x FOR PEERwaste
REVIEWon inventory, purchasing, and scheduling using a card system
28 of 38 in
production; (4) improving the production flow and building work discipline in the business
culture; (5) improving product quality by maintaining control of the production process;
(6) developing financial governance, product marketing, and human resource capacity
(6) developing financial governance, product marketing, and human resource capacity
strengthening,
strengthening, whichwhichare
are cross-functional
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ibility in placing
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sustainability The sustainability of SMEs inofMa-
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Makassar City is presented in Figure 8 below.

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in Makassar
J. Open Innov. Technol. Mark. Complex. 2021, 7, 20 28 of 37

5.3. Open Innovation and Productivity of SMEs

Increasing the productivity of small and medium enterprises in Makassar City will
require strategic steps and policy support from the government. This government policy
support is in the form of assistance in developing ideas and ideas to be adapted in the
management of SME businesses. Furthermore, four strategic steps are needed to support
the increase in productivity of small and medium enterprises in Makassar City, namely
(i) planning, (ii) organizing, (iii) directing, and (iv) supervision. The four principles are
carried out by developing new product innovations for the purpose of increasing the com-
petitiveness of products produced by small and medium enterprises. Thus, it is necessary
to change the way SMEs think to build business cooperation through the use of technology.
The Fourth Industrial Revolution not only has tremendous potential to overhaul industry,
but this is also certain to be a widespread view not only in government and academia but
also in various walks of life [101].
The development of the innovations needed to support the increase in the produc-
tivity of small and medium enterprises are carried out through several strategic actions,
namely: (1) increasing the skills, knowledge, and technological mastery of SMEs; (2) creat-
ing new products and improving the quality of products that have been marketed so far;
(3) the transformation of business management towards the process of digitizing product
marketing; and (4) building business cooperation in a sustainable manner. The four pro-
cesses are carried out through a mentoring process by the government in the framework of
fostering creativity and new ideas for small and medium enterprises. Entrepreneurship is
a key element for SMEs to be competitive in the global market knowledge base towards
economic growth, creativity, and innovation [102].
Three steps are needed in developing the ideas and creativity of small and medium en-
terprises towards increasing the productivity of economic enterprises, including:
(1) the adaptation of the process, namely building creative product innovation to sup-
port flexibility and product originality through the process of thinking and behaving;
(2) developing products that have creative value to produce new/original products or
elaborate existing products in a more creative direction; (3) building the capacity of SME
actors, both individually and in groups, to create new products according to consumer and
market needs. There are three main strategic options based on customer experience, viz
affordability and customization, and four distinct groups: customer enjoyment, multiple
sources of differentiation, one-to-one marketing, and cost-effectiveness [103].
The development of ideas and creativity for SME players in Makassar City manifests
in several stages: The first is the learning process, namely the design idea begins with
deep learning to get an understanding of the basics of the design you want to make
for business product development. This process requires a sound knowledge base of
business design trends and developments. This means that this process can be carried out
through various trainings and comparative studies to build different product designs from
products that have been marketed by SMEs. The interaction of creativity, innovation and
sustainability is gaining momentum, but more training and comparing existing products
in the market is needed [104]. Second, the enlightenment of this process is carried out
by building creative ideas based on the ideas of SME players to complete and perfect the
product designs that have been produced. This means that the ideas that have been owned
by SMEs are then refined into a complete set of product designs that will be produced
and marketed. Third, the implementation of the design and verification of the resulting
products, namely ensuring the design is correct towards solving the problems of SMEs
in terms of increasing the competitiveness of the products produced to be marketed to
consumers. One of the factors responsible for the failure of SMEs is the high volatility of
global economic conditions [105].
Referring to the things that have been explained, efforts to increase the productivity of
small and medium enterprises in Makassar City towards sustainability, economic stability,
and the marketing of SMEs products will require further strategic steps in relation to
business diversification and expansion, including: first, ease of licensing, through support
J. Open Innov. Technol. Mark. Complex. 2021, 7, 20 29 of 37

for government policies and support for local regulations on SMEs. The ease of licensing is
oriented towards the ease of obtaining formal legality, shortening the bureaucratic pathway,
and making it easier for people to start developing economic business ventures. Second,
business cooperation and product marketing, in this case in the context of global economic
development, which will be dominated by small and medium enterprises. The role of
the government is very strategic in the framework of facilitating SMEs to build business
cooperation and product marketing through the use of technology towards industrial
competition in the domestic and global markets. This means that the government has a
role in protecting the market and facilitating the marketing of SMEs products. This effort is
carried out through an intensive process of mentoring to SMEs players in marketing their
products through e-marketing. Furthermore, technological and environmental challenges
confront society with the need to change traditional approaches and management principles
at regional and city levels [106].
Third, the creation of new market areas on a regional, national, and global scale
through government support. This process is carried out through technological innovation,
building product marketing networks, and strengthening the human resource capacity of
SMEs. This step is carried out through the following efforts: (i) technical guidance for SMEs
to enter the global market, (ii) the facilitation of global market intelligence, (iii) the cura-
tion of SMEs products with international standards, (iv) promotional cooperation abroad,
and (v) optimizing bilateral and multilateral cooperation on SMEs product marketing.
Furthermore, increasing the competitiveness of SMEs products is carried out through
the following efforts: (1) development of joint production houses in small and medium
industrial centers, including training, consultation and mentoring; (2) partnerships with
large businesses, including transfer of knowledge, management and production technol-
ogy as well as easy access to machine and technology facilities; (3) accelerated business
development, including developing the incubation and acceleration of startup business
ecosystem platform development (e.g., financing, logistics, marketing, innovation); (4) in-
ternational standardization and certification, supporting SMEs (knowledge management,
coaching, etc.) to obtain international standard certificates and enter the global market;
(5) building a logistics system for SMEs, including: (i) improving supply chain connectiv-
ity at production centers, (ii) the development of imported raw materials and local raw
material warehousing, (iii) developing warehousing that supports export consolidators,
(iv) developing e-logistics that is integrated with e-commerce and fintech, and (vi) building
facilities for reducing the postal costs for sending product samples.
Fourth, open innovation through smart cities to support the development of SMEs
in Makassar City towards implementing an environment of innovation, empowerment,
and participation of citizens, businesses, and other stakeholders in shaping the small and
medium enterprises in Makassar City. In this context, the smart city is closely related to an
open innovation strategy. Instilling a culture of innovation through training government
managers and frontline workers is an important component in achieving a holistic approach
and sustainable smart city transformations that can withstand leadership changes [107].
The meaning, the implementation of smart city is not only a government matter, but also
the responsibility of the business world and SMEs towards the integration of information
technology systems. Furthermore, the development of a smart city is oriented towards the
inbound strategy of open innovation, which includes market-based innovation strategy,
crowdsourcing, collaboration, and network building. The smart city will solve inherent
problems while reducing expenses and improving quality of life. Through the technology
of the Fourth Industrial Revolution, the advantages of the smart city are expected to be
able to overcome city spending by platforming cities [108].
Fifth, the dynamics of the entrepreneurial cycle of open innovation, in this case
developing business network relationships between companies and one another by giving
value to cooperation between individuals with one another, whereas dynamic capability
is more focused on interdependence with other companies so that the role of resources
becomes an important element in SMEs achieving greater performance and maximizing
J. Open Innov. Technol. Mark. Complex. 2021, 7, 20 30 of 37

profits, increasing income and welfare together. Currently small and medium enterprises
(SMEs) play a leading role in most of the world’s economies. For this reason, they seek
technological competitiveness and improvement of their innovation activities [109].
Sixth, the micro and macro dynamics of open innovation with the quadruple helix
model. The implementation of this model uses a positive synergy between government,
industry, and universities (academics). The application of this model is directed at three
roles in the development of innovation in a region, namely (i) the university as the center
of research-based development activities, (ii) the industry as a provider of consumer needs,
and (iii) the role of the government as a policy maker. These three things are an important
part of increasing the productivity of SMEs in Makassar City in a sustainable manner.
The implementation of the quadruple helix model refers to the findings of Ahonen and
Hämäläinen [110], namely: (1) TH + users are Triple Helix which is extended with the
community or users who provide information about their needs and experiences, for
example by testing products; (2) a company-centered living laboratory model, where the
community or users participate in each phase towards the development of ideas and
innovation as the main driving force for business ventures being developed; (3) a living
lab model that focuses on the public sector, where local government is at the center;
and (4) a community-centered model, where the user determines which innovations are
needed and developed. The implementation of these four models will lead to the creation
of cooperation between the government, academics, and the SME community towards the
sustainable economic growth of Makassar City.
Seventh, open innovation in SMEs in relation to trends, motivations and management
challenges requires SMEs to encourage regional economic growth in Makassar City. Thus,
the role of SMEs is an important element as a driver of entrepreneurship and economic
development. Furthermore, the developing SMEs in Makassar City in the future will con-
tribute positively to several things, including: (1) disseminating information related to the
quality of the products produced; (2) optimizing the use of natural and human resources in
the direction of increasing the productivity of economic enterprises; (3) optimizing demand
for imported goods and fixing domestic prices for certain products and stimulating de-
mand for domestic products towards product exports on the global market; (4) encouraging
economic development towards increasing the standard of living of the community. Fur-
thermore, global competencies and challenges due to advances in information technology
will have an impact on the life and business flow of SMEs. This means that the existence
of SMEs in Makassar City will require a transformation of business management and
innovation strategies towards sustainable SMEs. To maintain an innovative work style,
entrepreneurs need to build a unique identity to build an entrepreneurial identity [111].
Peter F. Drucker [112], stated that the main factors that support an organization to
survive change include: (1) flexibility, in the sense that the economic business community
must be flexible in making strategies. This means that in essence SMEs must be adaptive
and ready to face changes in order to remain sustainable and stable. Businesses must be
flexible in their implementation of the required strategies, namely policy, marketing, opera-
tions, and others; (2) providing facilities, in the sense that SMEs must be able to provide
facilities to support business performance, including equipment, machinery, resources
and technology. This means that increasing the productivity of SMEs will require facility
support in facing global challenges; (3) managing knowledge. In this case SMEs have the
ability to improvise changes by managing knowledge in a more productive direction; and
(4) innovation. In this case SMEs have the ability to increase productivity, diversify and
expand business.
Eighth, regional asymmetrical knowledge capabilities and open innovation in relation
to global marketing are global business-oriented activities that refer to the demand for
certain products based on global standards. Furthermore, the relational view can be under-
stood not only as a perspective for understanding organizations but also as a cultural way
that can support network settings and interactions with other actors, as well as facilitate
co-creation [113]. Thus, increasing the productivity of SMEs requires the importance of
J. Open Innov. Technol. Mark. Complex. 2021, 7, 20 31 of 37

being able to compete by paying attention to the global environment. In order to make a
production and consumption system for SME products in a sustainable manner, it is very
important to further explore and support new business models in relation to product pric-
ing, promotion, and distribution [114]. Thus, the performance of SMEs business activities
will include the pricing, promotion, and distribution of products (goods and services) to
customers/consumers for the purpose of making a profit. That is, global management is
the evolution of management towards operationalization in the global market, namely
exporting, negotiating franchises or licensing agreements, forming joint ventures, or mak-
ing direct investments in other countries [115]. Furthermore, the factors that need to be
considered in order to increase the competitiveness of SMEs to enter the global market
are: (i) expected business volume, (ii) geographic scope, (iii) SMEs involvement in global
marketing, (iv) sales volume and assets, (v) the product line and the nature of the products
produced, and (vi) business competition in foreign markets. The six basic principles will
ensure the stability of SME businesses going forward and contribute to the sustainable
economic growth of Makassar City.

6. Conclusions
The development of SMEs in Makassar City has a strategic role and function in
promoting economic growth and absorbing productive labor. To encourage an increase
in business productivity, creativity and technological innovation are needed in the de-
velopment of economic enterprises. The strategic steps needed for this are as follows:
(1) empowering economic enterprises; (2) business training and guidance towards the use
of technology; (3) training in financial management and business capital access through
formal financial institutions; and (4) access to product marketing to reach potential mar-
kets. The business transformation, investment development, technological innovation, and
management of SMEs will require the facilitation of institutional strengthening, modern
business management, and investment cooperation within a framework of controlling
production factors and business opportunities. SME diversification is closely related to the
demands of consumer needs, while business differentiation is strongly influenced by the
ability to build product marketing networks and a mastery of technology. The development
of SMEs based on technological innovation will require efforts to rearrange policies, in-
cluding (1) licensing and progressive manufacturing patterns that are oriented towards the
introduction and mastery of superior product-based production technology; (2) building
technological models, mastering more advanced production techniques, and continuing
the pattern of integrating technological components into new products; (3) designing new,
superior products after technology mastery integration by building products indepen-
dently; (4) determining the market, in the sense that the government provides incentives
and investment for the marketing of products developed in the community, especially by
SMEs. Thus, SMEs will develop rapidly if supported by government policies, access to
business capital, human resource capacity strengthening, and potential market access.
Four factors have a positive effect on the productivity development of SMEs in Makas-
sar City: (i) technological innovation, (ii) business diversification, (iii) product marketing,
and (iv) business stability. A weak mastery of technology in SMEs is influenced by sev-
eral factors: (1) capabilities and expertise are limited, (2) operational costs are high, and
(3) market guarantees for developing technology-based businesses are unsupportive. The
SMEs that are developing in Makassar City can market their products, even if they are
in limited quantities and only meet local needs. Business diversification is needed to
support business stability and develop new business patterns towards economic business
sustainability. Thus, economic growth, technological innovation, and business diversifica-
tion have a significant effect on product marketing and the economic stability of SMEs in
Makassar City.
The sustainability strategy of SMEs in Makassar City in relation to increasing busi-
ness productivity is influenced by several factors, among others: (1) selection of the right
location, which is highly dependent on the business being developed; (2) the use of social
J. Open Innov. Technol. Mark. Complex. 2021, 7, 20 32 of 37

media, the role of which is a strategic choice in terms of product marketing; (3) business
innovation, in a business with many competitors; and (4) financial planning, with a good
administration system. The sustainability of SMEs in Makassar City will require several
strategic steps that need to be considered: (1) manufacturing products according to con-
sumer needs; (2) producing goods in small quantities to save costs and resources in an
effort to eliminate in-process supplies of goods and waste, by using an evenly mixed
production pattern; (3) eliminating waste on inventory, purchasing, and scheduling by
using a card system in production; (4) improving production flow and building work
discipline in the business culture; (5) improving product quality by maintaining control
of the production process; (6) developing financial governance, product marketing, and
human resource capacity strengthening, which are cross-functional in accordance with
their levels and positions; (7) eliminating uncertainty by establishing relationships in the
production and marketing processes; and (8) ensuring long-term maintenance by improv-
ing quality, increasing flexibility in placing orders for goods, ordering in small quantities,
and continuously orienting towards a sustainable production process.
Because this study was conducted in a limited scope and focused on increasing the
productivity of SMEs in relation to economic growth, it is advisable to carry out a follow-up
study on the sustainability model of small and medium enterprises based on economic
empowerment to complement the results of this study.

Author Contributions: B.S. conceived the study; B.S., F.M. and H.S. compiled the research; S.S.,
B.S. and H.A. completed the settlement; B.S., H.S. and M.I. processed the data; S.S., M.I. and H.A.
contributed materials, methods, and analysis tools; B.S. and F.M. analyzed the data; S.S. and H.A.
contributed to data checking; B.S., S.S., M.I. and H.A. wrote and revised the paper. All authors have
read and published manuscript versions.
Funding: This research was funded by the University of Bosowa through the Research Center for
Economic and Business Research LPPM, University of Bosowa, Makassar City.
Institutional Review Board Statement: This study was carried out through the approval of the
Institute for Research and Community Service (LPPM Bosowa University and LPPM STIM Lasaran
Jaya Makassar) through a Cooperation Contract Number 12/LPPM/IV/2020 dated 12 April 2020.
Furthermore, the funding for this study is funded through the Higher Education Educator Institution.
Bosowa University and STIM Lasaran Jaya Makassar and the study results have been validated by
the two institutions.
Informed Consent Statement: The results of this study were agreed upon by the Review Board of
the Bosowa University Research and Community Service Center and STIM Lasaran Jaya Makassar to
be published as outlined with the approval of the Review Board Number 76/LPPM/VI/2020.
Data Availability Statement: We fully support open scientific exchange through MDPI in sharing
and archiving research data from this study. We fully comply with the provisions that have been set
by referring to the established journal guidelines.
Acknowledgments: We are grateful for the participation of stakeholders in contributing ideas in
carrying out this study. Thank you to the Bosowa Foundation for their support and financial
assistance in carrying out this research.
Conflicts of Interest: The authors declare that there is no conflict of interest.

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