Inclusive Economic Education for Empowering Local Tourism MSMES Through Human Capital and Innovation in The Lake Toba Region

This study investigates the influence of Inclusive Economic Education on the empowerment of local tourism MSMEs in Labuan Bajo, with Innovation as a mediating variable and Human Capital as a moderator. Using the Partial Least Squares Structural Equation Modeling (PLS-SEM) approach, data were collected from MSME owners engaged in the local tourism industry. The results indicate that Inclusive Economic Education significantly enhances both Innovation and the empowerment of MSMEs. Furthermore, Innovation directly contributes to MSME empowerment and serves as a robust mediator between education and empowerment. The moderating effect of Human Capital is also significant, strengthening the relationship between Inclusive Economic Education and MSME empowerment. These findings align with the Innovation Diffusion Theory (IDT), emphasizing how knowledge dissemination and human capacity foster innovation adoption within small enterprises. Statistically, the model demonstrates strong explanatory power, with R² values of 0.808 and 0.708 for MSME empowerment and Innovation, respectively. Practically, the results highlight the need for comprehensive educational interventions supported by human resource development to achieve sustainable local entrepreneurship. The study offers theoretical, practical, and policy insights while also identifying avenues for future research involving broader geographic scopes and longitudinal analysis.