Collaborative Governance-Based MSME Institutional Model Towards Local Economic Autonomy

SMEs play a vital role as providers of goods and services, absorbing labour, ensuring income equality, adding value to regional products, and improving the standard of living. The SME development program supporting local economic independence requires an institution that collaboratively involves multiple stakeholders. This research focused on the Collaborative Governance-Based MSME Institutional Model to enhance Local Economic Autonomy. The research aims to get a description of SME institutional models by considering collaborative governance among stakeholders. The research used a qualitative method. The findings of the research are that each stakeholder participates and intervenes in the development of SME based on their respective roles, functions, competencies, and core businesses in a collaborative and integrated manner through interaction and coordination. The Creative and innovative communities process natural products into processed products to become more economically valuable and useful. Academicians conduct research, training, and development. Business people develop the economy; Financial institutions provide funding, and other supporting institutions support innovation, certification, quality assurance, and legal aid. The Model of SME institutions to enhance the community economy should involve multiple stakeholders interacting, coordinating, and collaborating, Governance based on their role, function, competence, and core business under the coordination of the government. This funding is to provide input to the government and SME actors in designing SME institutional models by considering collaborative governance.