THE CONTRIBUTION OF THE MICRO, SMALL, AND MEDIUM-SIZED ENTERPRISES (MSMEs) OF FOOD PROCESSED PRODUCTS TO THE ECONOMIC DEVELOPMENT IN GORONTALO

Abstract

This research aims to analyze (1) the development of micro, small, and medium-sized enterprises (MSMEs) in Gorontalo and (2) the impact of the micro, small, and medium-sized enterprises (MSMEs) of food processed products on the economic development from the perspective of employment rate in the MSME sector and poverty level in Gorontalo. This was quantitative research. The secondary data used here were collected from Statistics Indonesia and the Gorontalo Food Service. Data analysis used were descriptive-statistic (LQ, LQShare, and LQShift analyses) and inferential (simultaneous equation/indirect least square). Findings indicate that (1) micro, small, and medium-sized enterprises (MSMEs) had different potencies in each district/city in Gorontalo. The MSMEs of food processed products in Gorontalo District, Boalemo, Pohuwato, Bone Bolango, and Gorontalo Utara were attested progressive. MSMEs of food processed products greatly rested on feedstocks. Sufficient availability of feedstocks would make production costs more efficient, and thereby accrued the demand for food processed products at a competitive price. This would elevate MSME business actors’ income and the local economic development (district/city) where the business was operated, and (2) the employment rate in the MSMEs of food processed products had a significant negative impact on poverty in districts/cities in Gorontalo. The negative coefficient indicated that the more the MSMEs of food processed products in Gorontalo (districts/cities), the more enhanced or optimized the economic development. The impact was indicated by a high employment rate, which in turn would reduce poverty levels in districts/cities in Gorontalo.