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This paper aims to understand what factors explain the strategy of SME product innovation in Nagari (village) in Minangkabau. SME product innovation strategy is an essential achievement in an intensely competitive market in Indonesia. | Factors influencing sme innovation in local government the case of SME in Nagari International Journal of Management Volume 11 Issue 04 April 2020 pp. 221-231. Article ID IJM_11_04_023 Available online at http www.iaeme.com ijm issues.asp JType IJM amp VType 11 amp IType 4 Journal Impact Factor 2020 10.1471 Calculated by GISI www.jifactor.com ISSN Print 0976-6502 and ISSN Online 0976-6510 IAEME Publication Scopus Indexed FACTORS INFLUENCING SME INNOVATION IN LOCAL GOVERNMENT THE CASE OF SMES IN NAGARI Prima Fithri Donard Games Eka Candra Lina and Rahmat Hidayat Universitas Andalas Indonesia ABSTRACT This paper aims to understand what factors explain the strategy of SME product innovation in Nagari village in Minangkabau. SME product innovation strategy is an essential achievement in an intensely competitive market in Indonesia. However there is little research that investigates SME innovation in terms of Nagari village in Minangkabau. For a long time SMEs in Nagari is seen as backward and laggards. This is unfortunate because Nagari has been expected to become a new source of economic growth in West Sumatra. Also Nagari has been identified as a manifestation of Minangkabau values which directly implements Minangkabau wisdom. Small and Medium Enterprise SME has become an essential issue in Indonesia as an emerging market economy. The present study examines the relationship between innovation- related concepts i.e. organizational structure creativity and risk-taking and SME innovation implementation. A purposive sampling technique was used to select the respondents for this study. A total of 60 SMEs in Nagari constituted the sample. The results showed that among the innovation-related concepts two variables were found to be significant predictors of SME innovation implementation. Creativity contributed 46.9 to SME innovation implementation while Risk-Taking contributed an additional 17.1 . It was found that creativity has a strong link with SME innovation .
