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Micro, Small, and Medium Scale Industry as Means of Poverty Reduction

The development of micro, small, and medium scale enterprises (SMEs) expectantly contributes to the reduction of poverty, particularly in the developing countries like Indonesia. This paper presents the theoretical phenomena of how the relationship between the two of them. The aims of this study are to determine which factors are the measurement of the development of small-scale industry and to create the mapping factors that generate poverty reduction. We used secondary data at national and provincial levels. The scatter diagram method is used to describe the relationship between development of SMEs with poverty in Indonesia and West Java Province. The results show that there is a negative relationship between the development of SMEs as measured by the number of business units, number of workers, output value, and investment value with the development of poverty levels measured by the percentage of poor people both at the national level and West Java Provinces. Keywords—small scale industry; poverty reduction; garment industry