Innovation and Government Support for SME Performance in Lake Toba’s Halal Culinary
Keywords:
Innovation Capability, Government Support, SME Performance, Halal Culinary, Lake TobaAbstract
This study aims to analyze the impact of innovation capability and government support on the performance of Small and Medium Enterprises (SMEs) within the halal culinary industry in the Lake Toba destination. As a Super Priority Tourist Destination in Indonesia, Lake Toba requires a robust SME sector to support its muslim-friendly tourism development. The research focuses on how internal capabilities, specifically innovation, combined with external institutional support, can drive business growth and community-based economic empowerment. The methodology employs a quantitative approach, utilizing a survey-based descriptive and explanatory research design. Data were collected from halal culinary SME owners across the Lake Toba region. Structural Equation Modeling (SEM) through SmartPLS was utilized to analyze the relationships between variables. The results indicate that innovation capability significantly enhances SME performance, enabling businesses to adapt to the competitive tourism market. Furthermore, government support plays a crucial role as a moderator, strengthening the positive effect of innovation on business outcomes. These findings suggest that the synergy between proactive innovation from entrepreneurs and strategic intervention from the government is essential for business resilience. In conclusion, empowering MSMEs through targeted innovation and policy support is vital for creating a sustainable community-based economy. This study provides practical implications for policymakers to enhance technical assistance and infrastructure to foster a more competitive halal culinary sector, ultimately supporting the local economic growth of Lake Toba as a premier international destination.
References
[1] World Population Review, “Data Populasi Muslim Dunia 2025,” 2025.
[2] A. D. Amry, S. Pebrianti, L. Fajarwati, and D. Narti, “Peran Sertifikat Halal Dalam Meningkatkan Kepercayaan Konsumen Muslim Pada Produk,” Jurnal Ekonomi Revolusioner, vol. 7, no. 6, 2024.
[3] Wijaya dan Rifqiansyah, “Entrepreneurship Based on Culture and Local Wisdom: Building Sustainable Business from Tradition,” J. Indones. Sch. Soc. Res., vol. 5, no. 1, 2025.
[4] R. Fitri, “Analyzing the moderating role of government support in enhancing UMK performance in the halal culinary industry,” Journal of Indonesian Business and Economy, vol. 10, no. 1, 2025.
[5] W. Bature, K. Woldesenbet, and M. Bola, “Proactiveness, innovativeness, and firm performance,” Journal of Business Research, vol. 145, 2023.
[6] N. Aboobakar, “Workplace Spirituality, Employee Wellbeing and Intention to Stay,” International Journal of Educational Management, vol. 33, no. 1, 2019.
[7] S. Alhabshi, et al., “The Role of Digital Competency in Enhancing Small Business Performance,” Journal of Small Business Management, 2021.
[8] Ismail, A. A. Tarigan, A. Soemitra, and Z. M. Nawawi, “Strengthening the global competitiveness of halal culinary SMEs in North Sumatra through a Maqasid of Shariah-based approach,” Journal of Islamic Economics Lariba, vol. 11, no. 1, pp. 381–406, 2025, doi: 10.20885/jielariba.vol11.iss1.art15.
[9] D. Utonga, C. S. Tundui, and E. Mkuna, “Harnessing performance through digital technology adoption,” Cogent Business & Management, vol. 13, no. 1, 2026.
[10] G. S. A. Khan dan M. S. Ahmad, “Impact of Innovation on SME Performance: The Mediating Role of Innovation Capability,” Journal of Open Innovation, vol. 7, no. 2, 2021.
[11] T. I. Yusanti dan Sri Suprapti, “Influence of Workload and Digital Competency on Performance of Employees,” Proceeding of the ICBE, vol. 1, no. 1, 2023.
[12] Y. Zhai, et al., “The Positive Impact of Transformational Leadership on Digital Transformation and Innovation in Agri-Food SMEs,” Journal of Innovation & Knowledge, 2026.
[13] M. R. Awal, “BridgingThe Intention-Success Gap in Digital Entrepreneurship,” Sustainable Futures, vol. 11, 2026.
[14] Z. Tao, “How environmental corporate social responsibility affects green product innovation,” Innovation and Green Development, vol. 5, 2026.
[15] T. N. Putri, et al., “Strategi Manajemen Perubahan Untuk Mempercepat Transformasi Digital,” Jurnal Sains Dan Teknologi, vol. 22, no. 1, 2022.
[16] N. K. Bachtiar, “Understanding the Effectiveness of Government Support in Market Sustainability Policies and Programmes for SMEs,” 2023.
[17] V. Prasannath, R. P. Adhikari, S. Gronum, and M. P. Miles, “Impact of Government Support Policies on Entrepreneurial Orientation and SME Performance,” International Entrepreneurship and Management Journal, vol. 20, pp. 1533–1595, 2024, doi: 10.1007/s11365-024-00993-3.
[18] A. D. Tuhuteru and M. Iqbal, “Readiness of Micro, Small, And Medium Enterprises (Msmes) in the Food and Beverage Sector for Halal Certification Implementation: A Case Study in Magelang, Indonesia,” Journal of Halal Studies and Development, vol. 10, no. 2, pp. 1091-1114, 2024, doi.org/10.20885/jielariba.vol10.iss2.art24.
[19] L. Farida et al., “Influence of Entrepreneurial Passion and Government Support on SME Performance,” ASSETS, vol. 13, no. 1, 2023.
[20] S. R. Khattak dan S. H. H. Shah, “Role of Government Support on Proactiveness and Firm Performance,” Int. J. Entrepreneurship Small Bus., vol. 44, no. 2, 2021.
[21] F. Halim, et al., “The Influence of Social Capital and Innovation Capability on Business Performance,” Int. J. Bus. Law. Ed., vol. 4, no. 2, 2023.
[22] L. Sutanto, et al., “The Impact of Human Capital Readiness on Business Performance,” vol. 7, no. 2, 2023.
[23] D. Qiu & J. Qiu, “Digital Transformation and Innovation Capability in Manufacturing Enterprises,” Scientific Reports, 2026.
[24] K. Amoa-Gyarteng, S. Dhliwayo, E. Onyin-Emi, and S. Sisay, “The role of innovation strategy in entrepreneurial venture survival: a moderated mediation analysis of organizational adaptability and environmental influences,” J. Small Bus. Enterp. Dev., vol. 33, no. 8, pp. 32–62, 2025, doi: 10.1108/JSBED-12-2024-0610.
[25] B. P. Badoc-Gonzales, M. B. S. Mandigma, and J. J. Tan, “SME resilience as a catalyst for tourism destinations: a literature review,” Journal of Global Entrepreneurship Research, vol. 12, pp. 23–44, Mar. 2022, doi: 10.1007/s40497-022-00309-1.
[26] M. S. A. Talib, S. S. M. Sawari, A. B. A. Hamid, and T. A. Chin, “Emerging Halal Food Market: An Institutional Theory of Halal Certificate Implementation,” Journal of Islamic Marketing, vol. 7, no. 3, pp. 295–305, 2016, doi: 10.1108/JIMA-01-2015-0001.
[27]. A. R. Nasution and M. Bahman, “Public Governance of Value-Based Public Policy: Indonesia’s Halal Certification in a Global Regulatory Context,” International Journal of Economics, Research, Law and Social Sciences (IJERLAS), vol. 4, no. 2, pp. 1–15, 2026, doi: 10.5281/zenodo.18600647.
[28] M. Natsir, C. F. V. Yusuf, S. A. Angelica, A. P. Tambunan, A. B. Kesuma, and Y. Z. Putri, “Gastronomic Tourism and Cultural Identity: The Culinary Heritage of Batak Toba Cuisine in North Sumatera,” Budpar Journal, vol. 27, no. 5, pp. 260–269, 2024.
[29] H. S. C. P. Dewi, Rofiaty, R. Wijayanti, and Margono, “Resource-Based and Strategic HRM Perspectives on Halal SMEs: A Systematic Review of Innovation, Regulation, and Performance,” Lex Localis – Journal of Local Self-Government, vol. 20, no. 6, pp. 5271-5293, 2025.
[30] R. Munte, D. Peranginangin, E. Damanik, and D. Haloho, “Integrating Digital Marketing and Local Wisdom to Enhance MSME Performance in North Sumatra,” Jurnal Ilmiah Manajemen Kesatuan (JIMKES), vol. 14, no. 1, pp. 1603-1612, 2026, doi: 10.37641/jimkes.v14i1.4834.
[31] D. Gumulya, T. J. Purba, S. Hariandja, and R. Pramono, “Cultural Product Design as a Key Strategy for Innovation Capability Development: Evidence from Indonesian Creative Social Enterprises,” Archives of Design Research, vol. 36, no. 1, pp. 21–41, 2022, doi: 10.15187/adr.2022.02.36.1.21.
[32] Sugiyono, Qualitative Research Methods. Bandung, Indonesia: Alfabeta, 2020.
