THE SME DEVELOPMENT BASED ON LEADING COMMODITIES

SMEs have an important role in economy, especially in Indonesia. Some indicator data of macroeconomic indicates that SMEs have a major contribution to economic growth. Along with the development of regional economy, many problem found by local governments in developing SMEs, both internal and external. Comprehensive study was conducted to get the policy and recommendation for stakeholders to be able to increased in developing SMEs. This research examines the development of SMEs based on leading commodity in Nabire. The methods using Analytic Hierarchy Process (AHP) to see the leading commodity featured in various sectors for development. It refers to the OTOP program, which quite successful in developing SMEs in Thailand. The results of the study indicate there are at least five major factors to consider in the development of SMEs. They are access to distribution networks or markets, limited capital, flexibility of pricing, training and accessibility of capital. Meanwhile, sub sector priorities to be developed are citrus plantation, cocoa plantations, rice and soybeans, small furniture industry and regional trade