Economics Development Analysis Journal 9 (1) (2020) Economics Development Analysis Journal http://journal.unnes.ac.id/sju/index.php/edaj Success Factors for Small and Medium Industries Based on Creative Industries Fitria Ardiana 1Economics Development Department, Economics Faculty, Universitas Negeri Semarang Article Info Abstract ________________ ________________________________________________________________ Hisrtory of Article Received October 2019 The purpose of this study was to determine the effects of entrepreneurial characteristics, interest in Accepted December 2019 entrepreneurship, business networks, promotion and government support for the success of creative Pusblished February 2020 industries based in Magelang Regency. The sampling technique uses non-probability sampling with ________________ a convenience sampling approach, as many as 100 entrepreneurs. Data collection techniques using a questionnaire. Data were analyzed using Partial Least Square with reflective measurement models Keywords: for each latent variable in the study . Based on the results of the study, Entrepreneurial characteristics, Entrepreneurial interest in entrepreneurship do not affect the success of the industry-based creative; The business Characteristics, network, promotion and government support has a positive effect on the success of the industry- Entrepreneurial Interest, based creative. The suggestion from this research is that entrepreneurs can increase their courage in Business network, taking risks and create interesting and creative things and be more active in participating in programs Government Support, organized by the government to increase business success and the government can give awards or Business Success prizes to entrepreneurs who actively participate in government programs. __________________ © 2020 Universitas Negeri Semarang Corresponding author : ISSN 2252-6560 Address: L2 Building, 1st Floor FE UNNES Sekaran Campus, Gunungpati, Semarang, 50229 E-mail: [email protected] 23 Fitria Ardiana/ Economics Development Analysis Journal 9 (1) (2020) INTRODUCTION Table 1. Number of SMIs in the Province of Central Java in 2017 The role of Small and Medium Industries (SMI) Area Number of Attempts in the economy has a major contribution in Blora Regency 1860 employment, the largest population distribution of Grobogan Regency 833 businesses, and the formation of Gross Domestic Kudus Regency 1976 Product (GDP) (Lestari, 2010). City of Magelang 1226 SMI is one of the main pillars of the government Temanggung Regency 677 that has great potential in improving the welfare of the Purbalingga Regency 336 Banjarnegara Regency 2830 community, its labor-intensive rather than capital- Banyumas Regency 1860 intensive nature makes SMEs able to absorb large Batang Regency 2022 numbers of workers, this is what makes them unable Kendal Regency 5450 to be separated in meeting their needs (Ningsih, 2018). Pati Regency 1033 The large number of absorbed workers enables Purworejo Regency 2280 SMIs to increase community income and has a Regency of Rembang 3220 strategic role in reducing poverty and unemployment. Klaten Regency 2466 Magelang Regency 39601 There are several reasons for the very need for SMIs, Pekalongan City 3021 namely SMEs performance which tends to be better in Salatiga 550 producing productive workforce, SMIs often increase Karanganyar Regency 890 their productivity through investment, and SMEs are Kebumen Regency 4911 believed to have the advantage of flexibility compared Pekalongan Regency 1120 to other large businesses (Berry, 2001) Semarang Regency 1557 Sragen Regency 820 The processing industry is one of the types of Sukoharjo Regency 2170 business fields that provides the largest contribution in Tegal Regency 3633 the formation of GDP in Central Java Province. This Wonosobo Regency 4490 is evident that the processing industry provides the Semarang city 1832 largest contributions compared to other sectors. Surakarta 236 Nu'man (2005) One of the sectors that support Tegal City 2043 Demak Regency 732 the economy comes from SMI because it is through Wonogiri City 790 this sector that all aspects related to human life Boyolali Regency 681 patterns are sourced, starting from consumption, food, Cilacap Regency 424 fashion and arts sectors. This is supported in Source: Central Java Labour of Department, 2017 Regulation of the Minister of Cooperatives and SMEs No. 4/PER/ M.KUKM/III/2015 concerning SME Judging from the SMI data in Central Java policies in their contribution to the GRDP. Province in 2017 it can be seen that Magelang Badan Ekonomi Kreatif (Bekraf) Central Java Regency is the region with the highest number of SMI province Officially declared four districts / Cities are compared to other Regencies/Cities in Central Java included in the area that are committed to develop w Province, this is evidenced in Table 1. The data in the ilayahnya as regional creative economy based on local Table shows that M Agelang Regency is the region wisdom. The four areas include Wonosobo Regency with the highest SMI business units compared to other by developing the culinary sector, Magelang Regency regencies/cities in Central Java Province. by developing the fine arts sector through the The SMI sector is vital for creating employment handicraft industry, Salatiga Regency developing the growth, the development of the SMI has an important leading culinary and cassava processing sectors and role in many ways that can be an adhesive and Banjarnegara Regency developing the agricultural stabilize the problem of social inequality that occurs. sector specifically coffee. Of the total 39.601 enterprises, there are 10.824 craft 24 Fitria Ardiana/ Economics Development Analysis Journal 9 (1) (2020) industries that produce commodities in Magelang most important thing is to know the economic District, with this result bracelet classed as regional conditions of a region can be shown by the GDP creative economy based on local wisdom through the growth rate data. GRDP revenue based on constant products of the craft by utilizing local knowledge. prices can be used to measure the success of the The handicraft sector is an economic pillar that development of an area by comparing economic supports the lives of some people in Magelang District, growth with other regions, by comparing each sector this is because it is sought as a livelihood for both between regions and can also measure the progress individuals and groups. that has been achieved in each region, so that the The handicraft sector in Magelang Regency that development priorities of each region can be known. develops is indeed potential, seen from the many types The following is the GDP growth rate based on 2010 of crafts produced in Magelang Regency, including constant prices in Central Java Province. stone crafts, temple miniatures, bamboo crafts, Table 3, which shows the GRDP growth rate calligraphy, children's toys and many others, more based on constant 2010 prices according to clearly in Table 2 below: regencies/cities in Central Java Province, shows that 4 regions were officially designated by the Creative Table 2. Number of SMIs using the SIDAK SMI Economy Agency to develop their territory as local Website in Magelang District areas, based on regions, 4 of which are Wonosobo Types of Handicraft Regency, Banjarnegara Regency, Magelang Regency, No Business unit Commodities and Salatiga City. 1 Woodcraft 482 2 Bird cage 124 From the data, it can be seen that Magelang 3 Woven handicraft 1513 Regency shows a lower growth rate compared to 4 Convection 31 Banjarnegara Regency and Salatiga City which also 5 Food 39 develop local wisdom-based regions, even though the 6 Souvenir 428 7 Clay Crafts 41 SMI in Magelang Regency is the highest compared to 8 Calligraphy 35 other regencies/cities in Central Java Province. It is 9 Carving 27 expected that its contribution to GDP is high but still 10 Children toys 58 11 Gypsum 20 relatively low despite the highest SMI in Central Java 12 Stone Crafts 128 Province. Total 2926 The success of a business is essentially the Source : Data Processed success of a business to achieve its goals, a business is said to be successful when it makes a profit because The results of Table 2 which shows that many profit is the sole aim of doing business Noor (2007). In SMIs using the SIDAK SMI website in Magelang achieving business success, it is necessary to increase Regency are forms of the presence of industry 4.0 productivity to increase competitiveness, according to which can raise new hopes in accelerating economic Prasetyo (2017) the phenomenon of productivity in progress. The greater role of science and technology is the era of free trade is increasing, in addition to increasingly demanded to increase the achieving competitiveness, productivity can also competitiveness of goods and services based on local increase the country's economic growth , therefore resources so that it is necessary to increase mastery, productivity is one of the most important indicators in development, and utilization of science and measuring the country's economic activities. With the technology in the business world especially SMI in the growth of productivity, it will affect the success of the face of globalization era (Nu 'man, 2005). In an business. economic growth, GRDP is another factor but the 25 Fitria Ardiana/ Economics Development Analysis Journal 9 (1) (2020) Table 3. GRDP Growth Rate based on 2010 Constant Prices by Regency/City in Central Java Province Regency 2014 2015 2016