Micro Small Medium Enterprises Performance in East Java Toward the Development of Smart Cities in Indonesia

This study aims to map the characteristics of the human resources of MSMEs stakeholders based on generational category and highlight the relationship between human resource capacity and innovative behavior as an effort to increase MSMEs performance in the East Java creative industry. The approach utilized in this study was a quantitative research design using an explanatory study. The owners of MSMEs in Java totaled 188 people participated in this study. The study found that Human Resources (HR) capacity along with innovative behavior could increase the MSMEs performance, therefore MSMEs owners need to put extra effort into developing an HR system to sustain their business as it is needed for the development of smart cities in Indonesia. MSMEs in all sectors (not limited to the creative sector) should strengthen their level of awareness of HR Capacity and boost innovative behavior to increase their business performance therefore initiatives for developing smart cities can be realized. This research provides useful insights into the importance of human resources and innovative behavior as intangible assets that need to be carefully maintained by MSMEs that are rarely discussed.