Advances in Economics, Business and Management Research (AEBMR), volume 46 1st Economics and Business International Conference 2017 (EBIC 2017)

Partnership Model Study To And Ulos Craftsmen In Dealing With Global Competition

Sari Bulan Tambunan (Author) [email protected] Departement of Management Faculty of Economics, Medan Area University Dhian Rosalina (Co Author) Medan, Faculty of Economics, Samudra University Linda Lores (Co Author) Langsa, Indonesia Departement of Management [email protected] Faculty of Economics, Medan Area University Medan, Indonesia

Abstract-Partnership is the series to twenty people engaged ulos cloth of processes that begin with knowing the business. potential partners, the advantages and The result of this study: The weaknesses of his business, building model described is as follows: strategies, implementation, monitoring Companies, Banking, Private sectors, and to evaluate until the target is Non-Governmental Organizations achieved This research aimed to find the (NGOs), Universities in cooperation right partnership model For Craftsmen with the Government as a source of batik cloth and ulos in Medan information on the existence of SMEs This type of research is research and Protectors, cooperate in a center development (Resarch and called: SME's Promotion Produc Development) by using interactive Institution in charge of cooperation analysis, Outcome in this research is program between SMEs and Parties development model with innovative and working together under the supervision creative base. Respondents This of this center. research is a typical batik cloth craftsmen and ulos in North Sumatra in Keywords: Creative Economy, Medan City by involving relevant Interactive Analysis, SMEs Promotion government agencies. Data collection Product Institution technique with purposive sampling technique and FGD is used for model refinement, Based on the results of data 1. Introduction collection, there are 30 business actors This research concerns the who pursue batik handicrafts typical of problems faced by Small, Medium North Sumatra, while others amounted Enterpises(SMEs) in the field of creative

Copyright © 2018, the Authors. Published by Atlantis Press. 109 This is an open access article under the CC BY-NC license (http://creativecommons.org/licenses/by-nc/4.0/). Advances in Economics, Business and Management Research (AEBMR), volume 46

industries namely batik cloth and ulos reserved for small businesses and open craftsmen who become the pride of the opportunities for the performance of people of North Sumatra. North Sumatra medium or large enterprises under terms of which has a local cultural heritage that partnership. Partnership is a partnership potential to be developed and become a between small-scale enterprises and local identity for the city of Medan in medium-sized enterprises or large particular and North Sumatra in general. enterprises with the fostering and Handicrafts such as Batik motifs typical development of medium-sized enterprises North Sumatra and ulos are one of or large enterprises with due regard to the the cultural heritages that can be developed principle of mutual need, mutual and are one of the creative economy that strengthening and mutual benefit.business focuses on the creation of goods and people services by relying on expertise, talent, and creativity as intellectual property. SMEs’s Partnership is the series of products are already in great demand by processes that begin with knowing overseas including Japan, America, potential partners, the positions of Netherlands, Germany and others. excellence and weakness of their business, start building strategies, implementing, Problem-based SMEs creative monitoring, and evaluating until the target economy in general are human resources, is achieved. Pattern of partnership between capital, and mastery of modern technology SMEs in Indonesia that has been [2]. Condition-based SME creative standardized, according to Law no. 9 of economy in North Sumatra at this time, 1995 concerning Small Business and judging from empowerment opportunities Government Regulation no. 44, 1997 on from time to time, from place to place, and partnership, consists of 5 (five) patterns, from sector to sector does not indicate the namely: (1). Inti Plasma, (2) .Subkontrak, magnitude of the expectations on the (3). Dagang Umum, (4) .Keagenan, and business group to support the growth of a (5).Waralaba sustainable economic system. As in [23], Many micro, small and The problems of batik cloth and medium enterprises (MSMEs) fail to ulos craftmen above can be solved through develop because they do not get certainty the partnership program between MSMEs, on the supply of input and output between MSMEs and Big Enterprises, marketing. Financial institutions do not see between SMEs with Cooperatives that in a comprehensive way the production aims to expand market share and business chain such as processing, marketing as a management more efficiently thus the series of businesses that operate in unity UMKM will have the power to compete and capital can be returned. The with the perpetrators other business. involvement of input, process, output and Efforts to increase the existence of market access to MSMEs is often not MSMEs is through a partnership pattern, properly organized. The package of set out in Presidential Decree No. RI. 127 business development policies does not of 2001 on MSME and Partnership, stating focus on the business units that are that there is a need for a kind of business formed. Government efforts have not been

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optimal in developing partnership network a. The core plasma partnership model in developing UMKM. Partnerships within is a partnership between SMEs and the framework of business linkages are large enterprises as the core of conducted through patterns appropriate to fostering and developing SMEs the type of business being partnered by that are in their position to provide being given the widest possible partnership land, production facilities, opportunities to Small Businesses, by the technical management and Government and the business world production management guidance, acquisition, mastery and Effective partnership relationships technological improvements motivate each individual partner to gain necessary for efficiency goals and safeguard their own interests. improvement and business As in [21] However, the implications of productivity . In this case, large the partnership relationship in the businesses have a social organization, certainly not apart from the responsibility (corporate social problems [21]. Preliminary research results responsibility) to foster and conclude the problems of MSME failure develop SMEs as business partners with partnerships that occur, among others: for the long term. SME development agencies are usually b. The subcontract partnership model bureaucrats / professionals, not is a partnership between SMEs and entrepreneurs, the pattern is not large enterprises, in which it comprehensive, truncated, generally produces the components required training and not sustainable. by large enterprises as part of its 2. Formulation of Research Problems production. Subcontracting as a system that describes the Based on the background of this research relationship between large problem it is necessary to create a model enterprises and SMEs, which the of partnership that supports the Big Enterprise as parent firm development of business actors batik and (parent firma) ordered to UMKM ulos, so the formulation of this research as subcontractor to do all or part of problem is: how the right partnership work (component) with full model to overcome the problems faced by responsibility to parent company. batik cloth and ulos craftsmen in Medan In addition, in this partnership City? model large enterprise provides assistance in the form of

opportunities for raw material 3. Partnership Model of Micro, Small acquisition, guidance and technical and Medium Enterprises capability of production, technological mastery, and The partnership model that has been financing implemented in Indonesia is as follows as c. Partnership Model The general in [24]: trade linkage, is a partnership between SMEs and large enterprises, whereby large

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businesses marketing SMEs or to improve the results of model SMEs produce the necessary needs development. of large entreprises as its partners. In this partnership model, large businesses market products or 5.Population and Sample receive supplies from SMEs to meet the needs required by large The population in this research is enterprises. craftsman of batik and ulos in Medan d. The Agency Partnership Model is a City. The sampling technique used is purposive sampling with the following partnership relationship between criteria: SMEs and large enterprises, in which SMEs are given special 1. Batik and ulos crafts are typical of rights to market UB goods and North Sumatra services as its partners. The agency 2. Respondent is owner of craft model is a partnership relationship, business where the principal produces or 3. Respondent's business owns something, while the other specialization is batik and ulos (not party (agent) acts as the party who a side job) runs the business and connects the 4. Long time work on batik and ulos product in question directly with at least 2 years the third party. e. The franchise partnership model is Determination of the target area of a partnership relationship, in which research is the area of Medan City, especially in Medan Tembung and the franchisor grants the right to Denai, while the craft of ulos obtained use its licenses, trademarks and from the craftsmen built by distribution channels to the Disperindag of North Sumatra and franchisee with the assistance of Medan City management guidance. In this

model, large businesses acting as franchisors provide guarantees 6. Data Collection Techniques proposed by MSMEs as franchise This study uses primary data and recipients to third parties secondary data, primary data obtained through Interview and Focus Group Discussion (FGD). The researcher 4. Types of Research interviewed the respondents of this research : the craftsman of batik and This research is a research ulos in Medan City which is in development (research and accordance with the criteria set by the development) in which researchers researcher, this research also held FGD to a number of government institutions analyze the development model that in Medan City who are willing to will be applied to batik cloth and ulos provide information that support the craftsmen to improve the capacity improvement of batik industry building of craftsmen. This research development model and ulos . involves several government agencies

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Secondary data in this research is the finance of craftsmen because of profile and the existence of craftsmen lack of income. of batik and ulos crafts in North Sumatra, secondary data comes from Equipment the Department of Cooperatives and In the production process ulos still SMEs of North Sumatra and Medan, use manual techniques. There are Industry and Trade, and from the two looms used are traditional National Craft Council of Medan looms and Non Machine. (Dekranas). Where looms are used operation 7. Constraints faced by artisans manually so that the process of a. Craftsman of Ulos ulos manually can be reached in one month. According to craftsmen Just like the common problems of Non-Machine Looms (ATBM) faced by other small and medium- help ulos settling process faster sized businesses, ulos (partonun) manually, but the price is relatively craftsmen have some constraints in expensive so not all craftsmen have production activities. Some of the ATBM. While the materials needed constraints can be spelled out in the to make ulos cloth such as , following points: wool fabric, fabric, dye, bark, etc. are relatively easy to find. Marketing Labor Ulos cloths have constraints in terms of pricing, ulos work using a Ulos work can not be done by traditional tool commonly called anyone, ulos work requires a Gedogan to wool and silk fabrics certain skill that requires the into ulos ready to use manually process, patience and takes the fastest completion time of thoroughness, given the complexity three weeks. The duration of of ulos weaving manually, most workmanship and skill required in ulos craftsmen get the expertise ulos settlement make ulos price is from generation to generation. quite expensive. b. Craftsman of Batik Fabrics The lack of use of ulos is also a constraint, production is done Marketing continuously but the limited market Marketing on batik cloth typical of makes ulos difficult to develop, North Sumatra is still limited, batik according to the ulos cloth products still have not reached the craftsmen identified with national market. The craftsmen traditional ceremonial activities so recognize most buyers of batik that if no customary activities ulos products North Sumatra are the is not used. government and private institutions Finance in the surroundings of Medan. However, due to lack of promotion, Financial constraints faced by ulos the unique potential of North craftsmen, among others, caused by Sumatra batik is not popular the demand for a little ulos cloth, nationally. with little demand to disrupt the Equipment

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Constraints of equipment faced by (ATBM) which help the craftsmen many batik craftsmen of North working faster than traditional Sumatra, this is because the raw looms (gedogan). This assistance is materials of batik making are all obtained from Government and produced from Java. Equipment Private Institutions.Typical batik such as canting and canting cap artisans of North Sumatra also get typical for batik work, the the help of capital tools such as craftsmen have to make canting and stamp motifs. received reservations from suppliers in Java, by batik craftsmen is still from Solo exactly. While other tools government agencies only. such as white cotton cloth, pencil patterns, coloring materials and b. Training stoves can still be met from the city Ulos craftsmen received of Medan. training on the use of silk fabric Labor with Non-Engine Weaving Equipment (ATBM) from agencies Skilled workers become obstacles that provide capital equipment, but when artisans receive many although the potential of silk ulos requests for batik cloth. Not many is large enough the potential of young people who pursue the craft many artisans is reluctant to attend Batik cloth typical of North the training due to the high cost of Sumatra although economically silk thread and the difficulty level profitable. compared to the workmanship using wool cloth. Ulos craftsmen 8. Craftsman Partnership in the craft of get product innovation training, Batik and Ulos where government agencies introduce diversified products Based on the observations, batik made from ulos such as bags, and ulos craftsman work together with , and so forth. Thus government and private agencies in expanding the use of ulos cloth in improving product quality and for business public spaces. development. It shows the enthusiasm of the craftsmen to advance the cultural Batik craftsmen are also heritage of North Sumatra is quite high. training creative batik making. Training to make motifs often

obtained batik artisans from 9. Support of Government and Private government agencies. Like ulos, Agencies to craftsmen batik craftsmen also get training in product diversification such as Based on the results of interviews bags, shoes, trays, and so on with with the craftsmen, it is known that batik motifs of North Sumatra. government and private agencies play a role in providing assistance. The forms of .c. Marketing assistance from the agencies summarized Both batik and ulos artisans in the interview are as follows: get marketing support from a. Equipment government agencies by involving typical North Sumatra products to The ulos craftsmen in various exhibitions in Indonesia Samosir and surrounding areas get and abroad. Generally, the the help of Non-Machine Looms

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craftsmen have not mastered online helpful for batik and ulos craftsmen, there marketing so that it takes training are some companies that provide aid only on e-commerce to improve batik production equipment, working capital, and ulos craft market. training for labor and others. The assistance provided by the company has worked well, but such assistance should be provided along with continuous guidance d. Business Establishment until the craftsmen can become self- There are craftsmen who employed entrepreneurs or entrepreneurial are incorporated in the local groups. Researchers create models that are government bank business, expected to help empower and strengthen business support here is the SMEs of batik and ulos in a model or provision of business credit partnership pattern: Government as the assistance and training financial protector and policy maker of SMEs, reports. But most artisans do not private parties, corporations, communities, get or join this business. universities should work together to empower SMEs Batik and Ulos.

The model described is as 10. Pattern or Model Partnership For follows: Companies, Banking, Batik and Ulos Craftsmen Private Parties, Non-Governmental Organizations (NGOs), Based on the observation of the Universities in cooperation with researcher to the artisans of batik and Ulos, the Government as a source of there are some conclusions in making the information on the existence of partnership model that is expected from SMEs and Protectors, cooperate in the craftsmen in the form of partnership a center called: SME's Promotion that not only provide marketing, capital Produc Institution in charge of and raw materials but needed partners who cooperation program between help the craftsmen become an SMEs and Parties working together entrepreneur, the Government has under the supervision of this supported the craftsmen by developing center. batik and ulos craftsmen with various activities and facilities given to craftsmen, but there are still unidentified craftsmen to be given the facility, this shows the need to be formed batik and ulos artisans community in the field which consists of all batik and ulos artisans in the city of terrain. The role of the successful craftsmen business is also expected to empower the builder of Batik and Ulos craftsmen who are still small operational. Like companies that have CSR programs to the community, it is very

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Figure 1 Partnership Model

Small business product promotion c. Capital: center acts as a liaison between big companies, banks, and universities in 1. Provision of credit information providing various contributions to increase 2. The mediator of the sources of the competitiveness of batik art craftsmen financing; and ulos of North Sumatra. These 3. Information and procedures for equity contributions include: participation; a. Marketing, by: d. Management: 1. Helping open network or market 1. Proper financial management access; 2. To provide assistance to be copyright 2. Promote the products of craftsmen and trademark. 3. Helping to identify the market and consumer behavior; e. Technology, by: 4. Helping to increase product quality and value-added packaging. 1. Helping innovation and technology transfer; b. Guidance and development of human 2. Assist in the development of resources, by: innovative product design; [23]

1. Education and training of product Contribution from parties who design and innovation cooperate with small business product 2. Comparative study; promotion center will be able to help 3. Consultation or Assistance

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improve the competitiveness of batik cloth Dengan Pemodelan Systems and ulos typical of North Sumatera Archetype , Disertasi, UI, 2011 Basically partnership is a reflection of the willingness of the party has excess [2] Adiningsih, Adi. 2010. Regulasi resources to help other people who lack Dalam Revitalisasi Usaha the resources, ie those who do require coaching. Therefore, in essence the pattern Kecil dan Menengah di of such approach is a mirror or a form of a Indonesia.www.lfip.org sense of concern to promote small business. [3] Candiwan.2014. Analysis of ISO

27001 Implementation for 11. Acknowledgment Entreprises and SMEs In Craftsmen are looking for Indonesia. Proceeding of The sustainable partnerships in skills, International Conference on marketing and capital tool support. Skill Cyber Crime Investigation and enhancement is needed by craftsmen to innovate products and can be more Cyber Security, Kuala Lumpur productive to produce new products acceptable to the market. Marketing [4] Direktorat Peningkatan Peran support is crucial for artisans since ulos is Kelembagaan Sosial still synonymous with ceremonial Masyarakat dan Kemitraan ceremonies so partners are needed to Direktorat Jenderal introduce ulos more widely to public space in the form of diversification of products Pemberdayaan Sosial made from ulos, as well as batik fabrics Departemen Sosial RI, North Sumatra also need to receive Acuan Jaringan Kerjasama marketing training assistance either through the exhibition as well as on line to Dunia Usaha Dalam expand market reach. Support of capital Pembangunan Kesejahteraan tools will also be required by artisans Sosial, 2005 considering the high cost of production equipment will be able to inhibit the [5] Erfit. Analisis Kesetaraan craftsmen in meeting market demand Dalam Kemitraan Pada Agribisnis Hortikultura. Jurnal 12. Reference Embrio. Volume 5, No.2. 2012

[1] Augustin Rina Herawati, [6] Jingga, Freddy., Limantara, Sistem Kemitraan Usaha Natalia. 2015. The Mikro Kecil Menengah Development of Indonesia (Umkm) – Usaha Besar Small Medium Enterprise

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(SME) Rating and Review Journal of Economics, Portal. International Journal of Management and Accounting 1 Multimedia and Ubiquitous (1): 101-117. Juni EngineeringI. Vol 10 (3) [11] Mohani, Abdul.,hasanah, pp.211-218 Ismail., Mazlina, Mustafa. [7] Golibjon, Y. 2016. Innovation 2013. Indonesian Small and SME Development: Medium Entreprises (SMEs) Indonesian Experience in and Perception on Halal Food Uzbekistan Context. Journal of Certification. African Journal Entrepeneurship & of Bussiness Managhement. Organization Vol 7 (16).pp 1492-1500. 28 Management.5(3) April

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untuk Kelompok Usaha Kecil [20] Ghassani, Nabila. Kemitraan Studi pada Industri Kerajinan Pengembangan UMKM. di Jawa Barat. Bandung: UPI Kebijakan dan Manajemen Publik. Vol.3, No.2, Mei- [16] Suryaningrum, Diah Hari. Agustus 2015 2012.Knowledge Management and Performance of Samll and [21] Putu Sudira, Dkk, 2014. Medium Entities in Indonesia. Pengembangan Model Lis 5 Cs International Journal of Pada Pendidikan Teknologi Innovation and dan Kejuruan. DIPA Pasca Technology.Vol. 3 No 1. Sarjana UNY. February. [22] Rojewski. J.W (2009). A [17]Tambunan, Tulus. 2008. Conceptual Framework for Development of SME in Technical and Vocational ASEnal oAN with Reference Education and Training. In R. to Indonesia and Maclean, D. Wilson, & C. Thailand.Chulalongkorn Chinien (Eds.), International Jounal of Economics, 20 (1) Handbook of Education for the April. Changing World of Work, Bridging Academic and [18] Budi Tri Siswanto, Vocational Learning (pp. 19- Pengembangan higher order 40). Germany: Springer. skills four cs (hos4c) pendukung industri kreatif , [23] www.rohmadpertanianft- jurnal UNY, 2013. peternakan.kediri.wordpress.co m. Di akses pada tanggal 10 [19] Dani Danuar Tri, 2013. Desember 2017 Pengembangan usaha mikro kecil dan menengah (umkm) [24] Huseini, Martani. Menata Ulang berbasis ekonomi kreatif di Strategi Pemasaran Indonesia. kota semarang, Skripsi, Jurnal Reformasi Ekonomi. Universitas Diponogoro, FEB, Volume 1 No 1 Mei Semarang,

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