Abstract:
The dynamics of urban development coupled with economic growth have contributed
positively to the development of small and medium enterprises (SMEs). Optimizing the utilization
and strengthening of the capacity of SMEs’ human resources will encourage increased productivity
of economic enterprises and the sustainability of small and medium enterprises (SMEs). This study
aims to analyze (1) strengthening the capacity of human resources (HR) of small and medium en terprises to work as a determinant of increasing the productivity of small and medium enterprises
(SMEs) and labor absorption; (2) the effect of strengthening the capacity of human resources (HR),
business productivity, technology utilization, and business diversification on the sustainability of
small and medium enterprises (SMEs); and (3) optimizing the role of government in supporting
business development, increasing productivity, business stability and sustainability of small and
medium enterprises (SMEs). This study uses a sequential explanatory design approach. Data were
obtained through observation, in-depth interviews, surveys, and documentation. Qualitative anal ysis in this study was carried out through a process of data reduction, data presentation, and con clusion drawing, while the quantitative analysis in this study uses quantitative descriptive analysis,
correlation, and multiple regression. The results showed that strengthening the capacity of human
resources, coupled with the use of technology, and followed by diversification of business, had a
positive contribution to increasing the productivity of small and medium enterprises (SMEs). Fur thermore, strengthening human resource capacity, business productivity, technology utilization,
and business diversification simultaneously have a positive and significant correlation to the sus tainability of small and medium enterprises (SMEs) with a determination coefficient of 72.3%. This
study recommends that government policy support through strengthening human resource capac ity, increasing business productivity, technology utilization, and business diversification have an
impact on the sustainability of small and medium enterprises (SMEs) in Makassar City, Indonesia.
