**1. Introduction**

A total of 65 million micro, small, and medium entrerprises (MSMEs) in Indonesia contribute more than 61% of the Gross Domestic Product (GDP), which absorbs 97% of the workforce and contributes to exports by 14%. The MSMEs still dominate the economic structure by 99.9%, while large businesses are only 0.01%. Based on data from the Ministry of Cooperatives and Small and Medium Enterprises [1], it is reported that 65 millions of micro, small, and medium enterprises (MSMEs) in Indonesia are dominated by women up to 64.5% of all existing MSME actors. This

indicates that women are empowered and play a very significant role in the economy of themselves, their families, and even the state. In the end, perspective on gender has become an important part. Thus, the interventions to be given should not exclude women as only recipients or subjects, but also women as agents or crucial actors to advance the economy, social, and culture.

During the last few years to date, the percentage of women's income contribution has shown increasing progress. Based on data obtained from Central Statistics Agency regarding the contribution of women's income in Indonesia, it can be concluded that the percentage has continued to increase every year, that is, in 2010, it reached 33.50%, and in 2020, it reached 37.26%. In 2022, the prospect of the Indonesian economy was predicted to increase, and it was expected that it will improve the economy that had slumped during the pandemic by empowering the community, especially in the MSME sector. This is because MSMEs are the main sector that the Government of Indonesia pays attention to in the context of the National Economic Recovery, both before and after the COVID-19 pandemic. Empowerment in the MSME sector is expected to maintain and improve performance to continue to contribute greatly to the Indonesian economy.

The increase is a positive signal of an improvement in the active participation and autonomy of women in the economy, specifically in the industry of entrepreneurship. This is expected to continue until 2022 to improve the regional economy. The Ministry of Cooperatives and SMEs noted that the number of micro, small, and medium enterprises (MSMEs) spread across Indonesia reached 65.47 million units in 2019, which was an increase of 1.98% compared with 2018, which was 64.19 million units. In 2016, there were 61.7 million units, and in 2017, it reached 62.9 million units. It was predicted that in 2020, 2021–2022, the number will continue to increase. Based on data from the Central Statistics Agency in 2021, a total of 64.5% of the total MSMEs spread throughout Indonesia are managed by women [1]. At the micro-enterprise level, 52% of the 63.9 million micro-enterprises in Indonesia are women. For the small business level, there are 56% of the 193 thousand small businesses that are owned by women. At the medium-sized businesses, 34% of the 44.7 thousand business actors are women [1]. The Minister of Cooperatives and SMEs (MenKop UKM), Teten Masduki [1] also target the number of women entrepreneurships in Indonesia's economic ecosystem to continue to increase. These data show that the involvement of empowered women is very important and makes the economy of themselves, their families, and even Indonesia's economic growth increase through the MSMEs they manage. Given these relatively large numbers, it can be concluded that the development and progress of MSMEs are very dependent on the role of women who become business actors. If we take a look at the position of MSMEs, which are one of the pillars of national economic resilience, given the majority of MSME actors driven by women, capacity and competency development for each female actor are definitely needed in order to achieve MSME progress so as to produce optimal development.

There are strategies required to be studied to strengthen the role of women as entrepreneurs, including the transformation of informal businesses to formal businesses, transformation in supply chain, modernization in digital technology, and the growth of productive entrepreneurs. This requires an increase in the capacity of human resources, training, mentoring, access to financing facilities, legal aid facilities, information, etc., to be able to develop together.

According to the MSME actors' perspective on development, their personal capacity, which is psychological capacity, has become the main factor as it is the driving factor of other resources that encourage superior entrepreneurial behaviors. Concern *Women Entrepreneurship Psychology in Managing Micro, Small, and Medium Enterprises… DOI: http://dx.doi.org/10.5772/intechopen.109320*

to these psychological factors will provide a more comprehensive approach, because an individual's success is not only influenced by the facilities received, the opportunities obtained, or the policies provided by the government, but also influenced by the internal factors that give them the internal power to take a stand, make decisions, decide to improve, and learn new things. This is what will be formulated through a women entrepreneurial empowerment approach, which are things that can be done by women from various backgrounds in empowering themselves as MSME actors.

#### **1.1 Psychological capital**

Implicitly, the entrepreneurial process for women entrepreneurs of SMEs is closely related to the concept of psychological capital consisting of hope, self-efficacy, resilience, and optimism proposed by Luthans et al. [2]. A person can rise to face challenges and move forward to achieve goals is influenced by psychological capital. Luthans et al. [2] define psychological capital as an individual's psychological condition characterized by self-confidence in taking on and overcoming difficult jobs (self-efficacy), positive attribution of current and future success (optimism), hope to achieve goals and the ability to finding alternative ways to achieve goals (hope), and the ability to recover quickly when faced with difficult challenges or problems (resilience). Psychological capital is possessed at the individual and organizational levels to achieve excellence through increased knowledge and human capital [2, 3]. Individuals with high psychological capital will be more adaptable and flexible in dealing with heavy work demands. At the same time, the psychological capital possessed will help in improving abilities and well-being [2].

Working women have many responsibilities at work and at home, which can lead to health problems such as stress, anxiety disorders, and other unpleasant consequences. Based on the research of Chawla & Sharma [4], psychological capital has the potential to play an important role to assist female workers in overcoming challenges in the workplace and in managing stress. Psychological capital can help a person to be better able to develop, survive, and maintain something they want [5]. Based on a research by Ambepitiya & Gao [6], when women's empowerment is combined with psychological capital, women can find out their own abilities for success and improvement in businesses that are run sustainably.

Psychological capital is part of positive organizational behavior and is directly related to a person's positive emotions [2]. Positive emotions have a significant impact on individual performance at work. Fred Luthans and colleagues proposed the notion of psychological capital (PsyCap) to explain the factors that drive the impact of positive emotions [2]. Based on this, psychological capital is an individual's positive psychological state, which is characterized by: (1) having confidence (self-efficacy) to take on and put in the necessary effort to succeed at challenging tasks; (2) making a positive attribution (optimism) about succeeding now and in the future; (3) persevering toward goals and when necessary, redirecting path to goals (hope) in order to succeed; and (4) when beset by problems and adversity, sustaining and bounce back and even beyond (resilience) to attain success [3].

Psychological capital is possessed at the individual and organizational levels to create excellence by enriching knowledge and human capital [2]. According to Peterson et al. [7], psychological capital is a positive approach, meaning, and outcome that is considered important for human motivation, cognitive processing, struggle for success, and resulting performance in the workplace. At the individual level, psychological capital is described as a positive psychological state [8], which includes hope,

#### *Entrepreneurship – New Insights*

efficacy, resilience, and optimism that will contribute to a person's performance of work better.

Psychological capital emphasizes the positive side of human life in the form of hope, creativity, courage, wisdom, responsibility, etc. [9]. The positive side of psychological capital can trigger a positive affective state that can facilitate the expansion of one's actions and thoughts that lead to higher creativity [10, 11]. Positive emotions can basically build and restore energy, physically, socially, and psychologically, which was previously depleted [10]. Psychological capital cannot stand alone and is not an implication of only one dimension, but the joint variance of the four accompanying dimensions, namely self-efficacy, hope, resilience, and optimism [12], as follows.

