STATISTICAL ANALYSIS OF THE IMPACT OF MSMES (MICRO, SMALL, AND MEDIUM ENTERPRISES) ON REGIONAL ECONOMIC GROWTH

Abstract

The Micro, Small, and Medium Enterprises (MSMEs) sector is the backbone of the national economy, significantly contributing to regional development through job creation and increased economic activity. This study aims to analyze the relationship and impact of MSME development on regional economic growth, based on statistical approaches and empirical evidence from various regions. The method used in this study is descriptive qualitative with a library research approach, where data collection was conducted through a review of scientific literature, statistical reports, and official publications over the past five years. The results of the study indicate that the growth in the number of MSMEs and employment in this sector has a positive and significant impact on increasing Gross Regional Domestic Product (GRDP) and regional economic dynamics, as evidenced by several provinces on the island of Sumatra. This optimal contribution is supported by government financing programs and the acceleration of digital transformation. However, the effectiveness of this contribution still faces several structural obstacles, such as limited business capital, low quality human resources, lack of product innovation, and limited market access. The conclusion of this study confirms that the more developed the MSME sector, the higher the inclusive regional economic growth. Therefore, it is recommended that the government and stakeholders expand access to microfinance and provide digital technology adaptation training to overcome obstacles and optimize the productivity of MSMEs in the regions.