Abstract

This research was conducted to find out the extent to which the quality of service and innovation in services affect the sustainability of MSME businesses in the Banjarmasin City. The study uses a quantitative approach with a survey method of 100 MSME actors. Data analysis techniques were carried out through validity, reliability, classical assumption tests, multiple linear regression, t-test, F test, and determination coefficients with the help of the SPSS program. The results of the study showed that the quality of service had a positive and significant effect on the sustainability of MSME businesses with a T value of 4.796 and a significance of < 0.001. Service innovation also has a positive and significant effect on the sustainability of MSME businesses with a T-value of 2.654 and a significance of 0.009. Simultaneously, service quality and service innovation have a significant effect on the sustainability of MSME businesses with an F value of 49.586 and a significance of < 0.001. The Adjusted R Square value  of 0.476 shows that service quality and service innovation are able to explain business sustainability by 47.6%, while the other 52.4% are influenced by other factors outside of research, such as business digitalization, managerial ability, access to capital, and marketing strategy. Therefore, further research is expected to develop studies by adding broader variables to obtain more comprehensive results. The findings of this study imply that improving service quality accompanied by service innovation can strengthen competitiveness and maintain the sustainability of MSME businesses in the midst of increasingly dynamic economic competition.

Keywords: service quality, service innovation, business sustainability, MSMEs