Interrelationship between Institutional Potential and Social Entrepreneurship: An Approach Towards Business Opportunity and Competitiveness

This study aimed to explain the importance of the tie-in between institutional potential and social entrepreneurship in encouraging the creation of job ventures and MSME competitiveness in Indonesia. The new institutional theory advises economic and social systems to reform institutional barriers to improve productivity and efficiency. Business prospects are mostly created by institutional potential. The consistency and interaction between institutional and entrepreneurial potential-shaping factors, however, was not emphasized in earlier research. Mixed methods were used, with basic concepts focusing on new institutional economic theory. The results showed that standardization, commercialization, technology, productivity, invention, social capital, and human capital strengthened institutional potential and social entrepreneurship. This created more ventures and encouraged competition. However, there is a need to eliminate institutional barriers to improve the efficiency and productivity of the socio-cultural-economic systems. The correlation between institutional potential and social entrepreneurship resources provides business opportunities and improves competitiveness. Moreover, it regulates efforts, speeding up the achievement of socio-economic equity. Policy implications should regulate and reform institutional barriers to improve the functionality of the socio-cultural-economic system.