Abstract

Purpose: This study examines the strategic approaches adopted by entrepreneurs in developing Micro, Small, and Medium Enterprises (MSMEs) in Indonesia and the Philippines, focusing on innovation strategies. Research design, data, and methodology: Conducted as a collaborative research effort, this study analyzes and compares data collected from MSMEs in Kendari City, Indonesia, and Manila City, Philippines, using a quantitative approach with descriptive and comparative statistical analysis. Results: Findings reveal that MSMEs in both countries implement similar distribution strategies, with a strong emphasis on innovation. Nearly 90% of MSMEs in Indonesia and the Philippines use innovation strategies to enhance income levels. However, a lack of awareness and knowledge regarding strategic innovation hinders their ability to maximize its potential. Conclusion: The study concludes that innovation distribution strategies play a crucial role in MSME development in both nations. However, increased education and training in strategic innovation are necessary to strengthen MSME competitiveness. Policymakers, industry associations, and educational institutions should collaborate to enhance awareness and provide resources supporting innovation-driven MSME growth. Strengthening innovation literacy will enable MSMEs to adapt effectively to market challenges, enhance resilience, and ensure long-term economic sustainability.