The Contribution of MSMEs to Economic Empowerment Local Communities (Case Study: On Cahaya Catering in Lhokseumawe)

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FORMOSA NEWS - Medan - How Small-Scale Catering Businesses Drive Local Economic Empowerment. Micro, Small, and Medium Enterprises (MSMEs) play a critical role in local economic development by providing jobs, generating income, and building essential workforce skills. A comprehensive study conducted by researchers Ella Ghifrah, Maisyuri, Ayu Angelina Pasaribu, and Nurmasyahyati from Universitas Senior Medan investigated how a suburban culinary business influences community welfare. Published in 2026 in the Formosa Journal of Sustainable Research, the research sheds light on the combined socio-economic impact of small businesses in Lhokseumawe City, offering valuable insights for policymakers and community leaders aiming to foster sustainable regional growth.

Background and Research Approach

In modern economies, small-scale enterprises act as vital catalysts for reducing economic disparities and driving local growth, particularly in suburban areas where formal employment opportunities may be limited. While individual factors like job availability or basic skill-building are often credited with improving livelihoods, less is known about how these elements interact dynamically within specific micro-enterprises. To explore these mechanics, the researchers focused on Cahaya Catering, a culinary business located in Uteunkot Village, Lhokseumawe, founded in 2018. Utilizing a quantitative descriptive research design, the team evaluated a population of 50 employees, ultimately drawing a sample of 33 respondents through purposive sampling and the Slovin formula. Primary data was gathered using structured questionnaires featuring Likert scales. The study measured four core variables: Employment ($X_1$), Income ($X_2$), Skills ($X_3$), and Local Community Economic Empowerment ($Y$). Analytical procedures involved instrument validity and reliability testing, classical assumption checks, and multiple linear regression analysis processed via SPSS software.

Key Findings and Results

• Methodological Rigor: Instrument testing confirmed high data reliability with an initial Cronbach's Alpha of 0.876, and validity checks streamlined the evaluated questionnaire items to 26 robust indicators.
  
• Statistical Assumptions Met: Classical assumption evaluations proved that the regression model achieved a normal residual distribution (Kolmogorov-Smirnov significance of 0.200), remained free from multicollinearity (VIF values well below 10), and showed no signs of heteroscedasticity.
  
• Regression Model: The multiple linear regression equation established was $Y = -0.127 + 0.532X_1 + 0.300X_2 + 0.132X_3$.
  
• Simultaneous Impact: While partial t-tests indicated that individual variables did not independently reach standard statistical significance on their own, the simultaneous F-test revealed a powerful collective influence with an F-value of 15.230 and a significance level of $0.000$.
  
• Explanatory Power: The coefficient of determination ($R^2$) reached 0.620, indicating that employment, income, and skills collectively account for 62% of the variation in local community economic empowerment.
  

Implications and Real-World Impact
The findings demonstrate that fostering true economic empowerment cannot rely on isolated measures such as merely opening up jobs or raising wages. Instead, small businesses create optimal outcomes when they deploy an integrated strategy that simultaneously offers employment opportunities, income growth, and comprehensive skill development. For business owners, policymakers, and local leaders, this highlights the necessity of combining job creation with targeted worker training, financial management mentorship, and capital access. Implementing these multi-faceted support systems allows regional enterprises to maximize their socioeconomic footprint and uplift community welfare sustainably.

Author Profile
Ella Ghifrah is a researcher and academic affiliated with Universitas Senior Medan, specializing in business management, socio-economic development, and MSME contributions. Co-authors Maisyuri, Ayu Angelina Pasaribu, and Nurmasyahyati are likewise researchers at Universitas Senior Medan focusing on economic empowerment and sustainable community practices.

Source
Ella Ghifrah, Maisyuri, Ayu Angelina Pasaribu, dan Nurmasyahyati. The Contribution of MSMEs to Economic Empowerment Local Communities (Case Study: On Cahaya Catering in Lhokseumawe). Formosa Journal of Sustainable Research (FJSR). Vol. 5, No. 8, Tahun 2026 (Halaman 691-700)
DOI : https://doi.org/10.55927/fjsr.v5i8.69 
URL: https://journalfjsr.my.id/index.php/fjsr