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 improve 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 competitiveness; (6) business feasibility training to obtain stimulant assistance from banks or formal financial institutions; (7) financial management support with a modern financial administration 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 suboptimal 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 diversification; 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 products 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 means that SMEs will be able to understand and identify the right market for the products 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) 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 using a card system 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 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 improving quality, increasing flexibility in placing orders for goods, ordering in small quantities, and continuously orienting towards a sustainable production process. Thus, small and medium enterprises that are able to maintain product quality and efficiency in production management, have competitiveness, and have the ability to manage superior products will create economic competitiveness towards business sustainability [
99,
100]. The sustainability of SMEs in Makassar City is presented in
Figure 8 below.
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 competitiveness 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 productivity of small and medium enterprises are carried out through several strategic actions, namely: (1) increasing the skills, knowledge, and technological mastery of SMEs; (2) creating 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 processes 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 enterprises towards increasing the productivity of economic enterprises, including: (1) the adaptation of the process, namely building creative product innovation to support 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 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 curation 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 technology 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) international 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 connectivity 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 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 contribute 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 demand for domestic products towards product exports on the global market; (4) encouraging economic development towards increasing the standard of living of the community. Furthermore, 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, operations, 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 understood 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 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 pricing, 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 making 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.