Explicating Human Capital Contribution for SMEs Sustainable Competitive Advantage

Abstract

Researchers debating about the role of human capital in order to increasing financial performance, sustainability and competitiveness. This study aims to examine the role of human capital in improving financial performance and competitive advantage. This study used a quantitative design through the distribution of questionnaires to managers of SMEs Wood Crafts in Badung Regency. The research sample amounted to 43 SMEs using proportional random sampling which was then analyzed with SmartPLS 3.0 software. The results contribute theoretically and practically, especially organizational efforts in maintaining the stability of financial performance, sustainability and competitive advantage. The analysis shows that human capital has a significant positive effect on financial performance, human capital has a positive and significant effect on competitive advantage, financial performance has a positive and significant effect on competitive advantage. Research limitations are discussed in the paper)

Human Capital and Performance of Micro, Small and Medium Enterprises: A Literature Review

“…SMEs can improve their human resources to become more competitive by implementing effective human resource management (Nugraha et al, 2022). Investments in employee development and training to improve the skills and knowledge of MSME players need to be made so that they can improve the performance of MSMEs (Yudistira et al, 2019). Therefore, it can be concluded that education and training play an important role in improving the performance of MSMEs.…”