IMPROVING COMPETITIVENESS OF SMALL AND MEDIUM ENTERPRISES BASED ON LOCAL LEADING PRODUCTS IN TARAKAN CITY, INDONESIA

Abstract

The competitiveness of SMEs is enhanced by compiling a map consisting of local superior employment sectors and local superior products. This study aims to identify and map the work sector and products of Small and Medium Enterprises that need to be developed to become the local carrying capacity of Tarakan City. Sources of data include primary data (questionnaires from respondents) and secondary data (GRDP data for the city of Tarakan). Data analysis methods include Location Quotient (LQ), Klassen Typology, and Analytical Hierarchy Process (AHP). The results showed that the fishery-based processing industry is an employment sector that has great potential to become a local leading sector in Tarakan City. The results also reveal that the competitiveness of SMEs can be increased by developing local superior products. This development must meet three criteria, respectively: development must be oriented towards the conservation of resources and the environment; its development must only involve products with local raw materials and local uniqueness, and its development is supported by local communities. Another finding is about three priority local superior products, namely Dried Fish/Peyek Pepija, Shredded Milkfish, and Amplang Milkfish Crackers. These results can be used as a basis for making policies regarding the development of a country's local superior products.