Analysis Business Efficiency of Micro Small and Medium Enterprises in North Sumatera Using The Data Development Analysis Approach (DEA)

Abstract

Micro, Small and Medium Enterprises (MSMEs) in North Sumatra play an important role in supporting regional economic growth. However, to achieve sustainable growth, MSMEs must operate efficiently and productively. The purpose of this research is to analyze the business efficiency of MSMEs in North Sumatra using the Data Envelopment Analysis (DEA) approach. The data used in this study is secondary data from government reports and a survey conducted by the Central Statistics Agency (CSA) in 2020. DEA analysis is carried out by comparing the inputs and outputs of each MSMEs business in the same sector. The results of the analysis show that most MSMEs in North Sumatra do not operate efficiently, especially in terms of the use of capital and labor. However, there are several MSMEs that are efficient in the use of resources and can be used as models for other MSMEs. Factors that affect the efficiency of MSMEs businesses include the type of business, location, capital, and entrepreneur skills. The results of this study can be used by the government and related institutions to improve the business efficiency of MSMEs in North Sumatra by providing guidance and training, as well as providing access to better capital and technology.