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Download Article (PDF) Advances in Economics, Business and Management Research, volume 180 Proceedings of the 18th International Symposium on Management (INSYMA 2021) Innovation as a Key Solution for MSES’ Survival in the COVID-19 Pandemic: A Case Study of MSES in Bogo Village – Bojonegoro Regency – East Java Elsye Tendelilin1*, Noviaty K. D.2, Karina C. Rani3, & Nikmatul I.E. Jayani4 1University of Surabaya, Surabaya, Indonesia 2University of Surabaya, Surabaya, Indonesia 3University of Surabaya, Surabaya, Indonesia 4University of Surabaya, Surabaya, Indonesia *Corresponding author. Email: [email protected] ABSTRACT The Covid-19 pandemic has a significant impact on the economic growth of many countries. Bogo village-Bojonegoro Regency is one of the centers for moringa plants produced by MSE. Moringa plant is a herbal plant that is beneficial for health. During the pandemic, MSEs have been experiencing difficulties producing and marketing products on an offline basis. This paper aims to explore the innovations made by MSEs in the Bogo village to sur- vive the pandemic. This study used a qualitative paradigm with a field research approach. Direct conversations and observations on 34 informants were ways to obtain data. This study used narrative inquiry for analysis and triangulation for data validity. The results show that the innovations carried out in various fields, including products, marketing, facilities, man- agement, and human resources, made MEs in Bogo Village survive and begin to experience business recovery during this pandemic. Keywords: innovation, moringa plant, MSE. 1 INTRODUCTION Bojonegoro-East Java; and (2) exploring in- novations made to survive during the Covid MSEs play a significant role for a country 19 pandemic. because they contribute to economic growth, Each country has its criteria in defining employment and reduce poverty (Ayyagari entrepreneurship, and there is no consensus et al. 2007 instead of Mahmutaj 2014). One in the definition. There are many definitions of the reasons is innovation activities that of entrepreneurship. (Fillis & Rentschler can increase competition and productivity. 2010) define entrepreneurship as the process MSEs are also very flexible and easy to of creating value for the business and social adapt to market changes. However, apart community by bringing together unique from the high growth rate of MSEs, the combinations of public and private resources bankruptcy rate for MSEs is also high to exploit economic, social, and cultural op- (Tambunan 2009). portunities in a changing environment. The Covid-19 pandemic hurts all busi- (Robbins & Coulter 2012) state that "entre- nesses, including micro and small enterpris- preneurship is the process of starting a new es (MSEs). Most MSEs have stopped their business, generally in response to existing business operations due to a sharp decline in opportunities." (Schermerhorn & Bachrach sales and increased operating costs. Many 2015) describe entrepreneurship as "strategic try to survive. Almost all MSEs experience thinking and risk-taking behavior that results this condition in various countries. Innova- in the creation of new opportunities." From tion is one of the solutions to overcome it. the various definitions above, it can be con- This research focuses on (1) exploring the cluded that entrepreneurship is a process and problems experienced by MSEs in the opportunities that are done by exploiting Moringa Center in the Bogo village- existing resources for earning profit. Copyright © 2021 The Authors. Published by Atlantis Press B.V. This is an open access article distributed under the CC BY-NC 4.0 license -http://creativecommons.org/licenses/by-nc/4.0/. 279 Advances in Economics, Business and Management Research, volume 180 Entrepreneurs can see opportunities to earn methods (Moleong 2010). Data were ob- profit by creating businesses, managing and tained from various sources using depth in- utilizing their resources, and taking risks. terview techniques, field notes, and observa- Three (3) main dimensions underlie the tion results. (Neuman 2014). The MSEs are concept of entrepreneurship: innovation, the owners who are managing the business, risk-taking, and proactiveness. Innovation is totaling 34 informants. Triangulation was a way for entrepreneurs to look for new op- used to support data validity and reliability. portunities or ways to realize ideas into Narrative inquiry techniques were used for something profitable (Fillis & Rentschler data analysis. The theory development and 2010). The success of innovation lies in its sampling time, situation, type of event, loca- success in the market, not in the novelty it tion, type of person, or context of interest produces. Various authors define innovation guide the field research method. from different perspectives and classify it This research focuses on exploring be- differently. (Urabe 1988) states that innova- havior, thinking, interacting, culture, and en- tion consists of new ideas and their imple- trepreneurial business (MSE) in Bogo vil- mentation into new products, processes, or lage, Bojonegoro Regency. The researchers' services, leading to dynamic national eco- 2.5 years of involvement with the Bogo vil- nomic growth, employment, and profit crea- lage community allows accurate and definite tion for innovative businesses. (Twiss 1989) results to be obtained. Field research allows defines innovation as a process that com- researchers to explore social conditions, bines science, technology, economics, and subcultures, and broader aspects of social management, to achieve novelty and expan- life. The steps in field research follow the sion from emerging ideas to commercializa- stages suggested by (Neuman 2014. tion in the form of production, exchange, and consumption. Even the ability to inno- vate (create products/services) is a new re- 3 RESULTS AND DISCUSSIONS quirement for an entrepreneur. There are three (3) general classifications The results of in-depth interviews, observa- of innovation (Afuah 1998): (1) Technologi- tions, and involvement in MSE activities re- cal that includes products, processes, and veal various problems faced by Moringa services; (2) Market that includes products, center MSE in Bogo village before the prices, places, and promotions; and (3) Ad- Covid-19 pandemic, and these problems in- ministrative that includes strategy, structure, crease in intensity during the pandemic peri- systems, and human resources. od. From early January 2020 until March 2020, the sales rate decreased by 70% due to 2 RESEARCH METHODS the Covid 19 pandemic. To overcome this, the MSEs carried out various innovations The method used in this research is field re- above for approximately 1.5 years. As a re- search that aims to examine certain phenom- sult, at the end of 2020, sales increased by 200% compared to previous monthly sales ena in society that are carried out in-depth to (source: internal production house "kelori- study the background, circumstances, and ta"). In conclusion, innovation in various as- interactions (Sugiyono 2011). This research pects (technology, market, and administra- used a qualitative approach that intends to tion) is crucial to surviving the Covid-19 understand the phenomena experienced by pandemic. It is in line with research (Fillis & research subjects such as behavior, percep- Rentschler 2010) that in the current econom- tion, motivation, and action holistically and ic downturn in various parts of the world, employing descriptions in the form of words innovation from entrepreneurs is the best and language in a particular natural context, way to stimulate business and improve per- furthermore, by utilizing various natural formance. 280 Advances in Economics, Business and Management Research, volume 180 Based on an in-depth interview and ob- using a drying machine and moringa leaf servation, the problems faced by MSE grinder to make it easier and hygienic. Moringa center-Bogo village are as follows: Process: Process innovation has been car- ried out by creating production SOPs so that 3.1 Problem the production process is carried out with the proper procedures and well standardized. All Production: It is still relatively simple, us- workers use work equipment (clothes, ing traditional equipment, no working SOP, masks, and gloves) while carrying out pro- no quality control, no planning of raw mate- duction activities to guarantee product hy- rials, the source of raw materials only relies giene. For the continuity of raw materials, on people's land, and is not hygienic in the residents must plant Moringa trees in the production process. Consequently, MSEs house yard, and village officials cooperate produce a reasonably high unit cost, the con- with the government forestry agency to plant tinuity of raw materials is not guaranteed, on the forestry’s official land. Collaboration and the product quality does not meet stand- with other villages that produce Moringa ards (quality and hygienic). leaves has also been carried out. Products: It is still limited to the produc- tion of Moringa leaf tea, the packing is still simple using ordinary plastics, the product 3.3 Solution – innovations in market design is not attractive, and does not meet Products: Product innovation is done by good packing standards (no information on making more product variants. For beverage the product). Consequently, consumers are products, the initial product is only moringa not interested in buying products and cannot leaf tea, then processed into powder tea, compete with similar products
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