Industri Kecil Menengah (IKM) have important roles in economic development. The large number of IKM cannot be separated from various problems. The basic problems faced by IKM in Kendari are limited capital, inadequate human resources, difficulty in obtaining raw materials, and the Indonesian economy which has slumped due to the impact of the COVID-19 pandemic. This research was conducted with the aim of classifying the characteristics of the IKM with the optimal number of clusters. The method used is k-Prototypes Clustering with values of k = 2, 3, 4, ..., and 10. The k-Prototypes method is a clustering method that maintains the efficiency of the k-Means algorithm in handling large data when compared to the hierarchical clustering method. This method can group mixed type data (consisting of numeric type data and categorical type data). Based on the analysis, the optimal number of clusters is five clusters, with a Silhouette Index value of 0.461. Cluster 5 is the best IKM cluster with the highest average number of workers and the highest average investment value, while cluster 2 has the lowest average investment value and IKM in this cluster is relatively new compared to IKM in other clusters.
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