The Influence of Product Innovation and Competitiveness on MSME Sustainability in Palopo City

Abstract

Micro, Small, and Medium Enterprises (MSMEs) play a vital role in Indonesia's economic structure. However, amid technological developments and global market openness, MSMEs face new challenges that require adaptation through product innovation and increased competitiveness. This study aims to analyze the influence of product innovation and competitiveness on MSME sustainability in Palopo City. The research employs a quantitative method with a survey approach. Data were collected through questionnaires distributed to 100 MSME actors in Palopo City using incidental sampling technique. Data analysis was performed using multiple linear regression with SPSS software. The research results show that: (1) product innovation and competitiveness simultaneously have a significant effect on MSME sustainability; (2) product innovation has a significant effect on MSME sustainability; (3) competitiveness has a significant effect on MSME sustainability. The research results indicate that amid a competitive and rapidly changing business environment, MSMEs must build innovation capacity while maintaining operational efficiency to achieve long-term sustainability. This study contributes to the development of MSME management theory and provides practical guidance for entrepreneurs and regulators in formulating sustainable MSME empowerment strategies.