Determinants of Innovation in Small and Medium Enterprises in Jember, East Java, Indonesia

Abstract

This study examines the effect of leadership, technological capabilities, learning, and industry competitive forces on the innovation of the Small and Medium Enterprises in the Jember Regency, East Java Province. The samples are the owner-managers of 113 SMEs engaged in five different sectors namely meubelair, food and beverage specialties, handicrafts; batik and embroidery. The hypotheses were tested using multiple linear regression. Results show that the technological capabilities and the industry competitive forces have positive and significant effect on the innovation of SMEs, while leadership and learning do have not significant effect