External Business Environment, Skills, Innovation, and Their Impact on Performance (Survey on Fashion SMEs in Bandung, Indonesia)

External Business Environment, Skills, Innovation, and Their Impact on Performance (Survey on Fashion SMEs in Bandung, Indonesia)

The research objects focus on the following construct:
1. External Environment
2. Employee Skills
3. Product Innovation

This study aims to determine the influence of the external environment, skills, and innovation on the business performance of MSMEs in the fashion sector of Bandung City. The population in this study is the fashion sector SMEs in Bandung, and a sample of 100 SMEs is taken based on the calculation of Slovin's formula.

The data analysis technique used descriptive analysis and verification through Structural Equation Modeling (SEM) with Lisrel 8.80 software. The results showed that the external environment had a positive effect on MSME business performance, skills had a positive impact on MSME business performance, and there was a positive influence on innovation on MSME business performance. The main implication is that these findings provide SMEs with a better understanding of how to respond to external environmental factors, such as capital development and corporate policies, which are so crucial to the sustainability of SMEs in Bandung.