The Role Of Msmes In Driving Regional Economic Growth: A Case Study Of Medan City

Abstract

Micro, Small, and Medium Enterprises (MSMEs) play a crucial role in fostering regional economic growth, including in Medan City, which is the third-largest city in Indonesia and the economic hub of Sumatra. The background of this study is based on the significant contribution of MSMEs to job creation and regional gross domestic product (GDP), while also recognizing the structural challenges they face. This research aims to analyze the contribution of MSMEs to the economy of Medan City and to identify the challenges and opportunities encountered. The study employed both quantitative and qualitative approaches, using secondary data from government reports and primary data collected through surveys with 150 MSME owners. The findings reveal that MSMEs absorb approximately 60% of the workforce and contribute 45% to the GDP growth of Medan City. However, MSMEs still face limited access to financing, technological constraints, and marketing difficulties. On the other hand, development opportunities can be achieved through digital transformation and government support programs. In conclusion, MSMEs are not only the backbone of the local economy but also hold great potential to enhance regional competitiveness if the main challenges are addressed through appropriate policies and strategies