How human capital may boost competitive advantage in cafés? Findings from Bukittinggi

Abstract

This study investigated the relationship between Human Capital (HC) and Competitive Advantage (CA) in the
coffee shop industry of Bukittinggi, a prominent tourist destination in West Sumatra. Utilizing a quantitative approach,
primary data were collected through structured questionnaires distributed to 55 coffee shop owners. The research
employed Structural Equation Modeling (SEM) with SmartPLS to analyze the data, aiming to elucidate how investments
in human capital contributed to achieving competitive advantage in a highly competitive market. The findings indicated a
significant positive relationship between human capital and competitive advantage, highlighting the critical role of
employee education, skills, and experience in enhancing business performance. Additionally, the study introduced social
capital as a vital variable linked to networking within the coffee business community, which further supported
competitive advantage. The results emphasized the importance of developing human capital strategies for coffee shop
owners to thrive in an evolving marketplace. These insights provided practical implications for l ocal entrepreneurs,
policymakers, and stakeholders, suggesting that continued investment in human resources could foster business growth
and positively impact the tourism sector in Bukittinggi. Ultimately, this research contributed to the broader understanding
of human capital's role in driving competitive advantage within small and medium-sized enterprises (SMEs).