To Improve the Tangerang City Regional Economic Growth
Total Page:16
File Type:pdf, Size:1020Kb
The International Journal of Social Sciences and Humanities Invention 4(9): 3996-4000, 2017 DOI: 10.18535/ijsshi/v4i9.16 ICV 2015:45.28 ISSN: 2349-2031 © 2017, THEIJSSHI Research Article Featured Product Development of Small and Medium Enterprises (SMEs) to Improve the Tangerang City Regional Economic Growth Harnovinsah Syahrial 1, Wiwik Utami2 1Faculty of Economic and Business Mercu Buana University, Jakarta 11650 2Faculty of Economic and Business Mercu Buana University, Jakarta 11650 Abstract: This research is aim at identifying various opportunities investment in a regional area that results in the provision of information regarding a potentially superior product of the particular region. This study focuses on Small and Medium Entreprises (SMEs) which are the major economic agent in the regional area. Data and information in this research cover various aspects. Objectives of this research are (1) to provide information about SMEs' products need to be prioritized for advancement in support of regional economic development (2) to produce policy recommendation to the government in the form of a featured product development model of SMEs which contribute positively to growth of regional area. The method of the research is explanatory or confirmatory research by using mixed approach i.e quantitative approach involving sample surveys and semi- structured interviews and also qualitative approach involving study cases, individual interviews, and focused group discussion. Data obtained was based on a list of commodities and products published by Statistics Center Bureau/BPS (2015). Results show that the featured product and business type are: 1. micro and small merchant 2. handicraft industry 3. processed foods 4. skill training institution and 5. The shuttles urban transportation. Keywords: SMEs, economic growth, featured products, competitiveness, regional government. INTRODUCTION Small and Medium Enterprises (SMEs) in the national This research is expected to contribute to the policy and economy have an important and strategic role. The condition development model of Small, and Medium Enterprises can be seen from various supporting data, that the existence of (SMEs) that can be utilized by the local government. The aim SMEs is quite dominant in the Indonesian economy. of this research is 1) to provide information about the featured Empowerment of small and medium enterprises (SMEs) from products of SMEs which need priority to be developed in year to year is always monitored and evaluated its supporting the development of economy in regions, jobs development both in terms of its contribution to the creation of creation, and product competitiveness 2) to provide the gross domestic product (GDP), employment, exports and recommendations to the government policy in the form of investment growth (Culkin and Smith, 2000). According to superior product development model for Micro, Small and Goga, Murphy, and Swinburn (2006), for the development of Medium Enterprises that contribute positively to the regional SMEs, it is necessary to take into consideration the factor of economic growth. "locality" associated with competitive advantage. In this The Role of Small and Medium Enterprises in Regional context, the regional economic development agenda needs to Economic Growth Economic development is a process of rely on local best potentials that are of regional advantage, economic activity that is dynamic and occurs continuously. need to have a strategic focus, which can also be a multi- Development and economic growth are closely related to real stakeholder collective agenda for synergy. Knowledge and per capita income of the population. According to Todaro innovation are key in building competitiveness. Therefore, the (2000) the success of economic development is indicated by agenda of regional priorities is to raise awareness that the the three principal value chain, namely (1) the increasing knowledge, technology, and innovation have become key ability of people to meet their basic needs (2) increased sense elements of success of regional economic development (Carter of self-esteem of society as human; and (3) the increasing of and Jones-Evans, 2006). The success of regional economic society's will to choose (freedom from servitude). Economic development is influenced and determined through development regional and national will face fundamental empowerment by diverse elements and groups, either changes are taking place so fast and need the readiness of businesses, government, or the general public. Collaboration especially the small and medium enterprises (SMEs). Small or a mix of productive linkages is to face challenges and to and medium enterprises or Small and Medium Enterprise support the development and utilization of the best potential (SME) in general have similar characteristics between one and the specific characteristics of their respective regions country and another, but in terms of the benchmark / standard (Berry and Sandeem, 2001). sizes vary from one country to another, such as: asset 3996 The International Journal of Social Sciences and Humanities Invention, vol.4, Issue 9, September, 2017 Harnovinsah Syahrial et al / Featured Product Development of Small and Medium Enterprises (SMEs) to Improve the Tangerang City Regional Economic Growth leverage, business turnover, capital , the amount of labor, creativity and talent of society and institutions in the form of management style implemented, and so on (Bartik, 2003; mastery of technology, human resource capacity, Sibisi, 2009). The important role of SMEs in economics infrastructure support, and local socio-cultural conditions, at a system can increase the commitment and equity in the national certain location. Local economic development is part of the development system. It is also supported by the laws and rules process of building dialogue and partnership among the parties of procedure, which will give priority to the economic consisting of local governments, SME entrepreneurs, and local development of SMEs in order to realize economic system community organizations. The main pillar of the strategy is to based on empowerment of community role. Each regional increase the attractiveness, endurance, and competitiveness of economic development efforts has the main goal to increase the local economy. The main objective of superior product the number and types of job opportunities in local development is to create a process of high growth and communities. In an effort to achieve these objectives, local sustainable development that will be useful for all party in an governments and their communities must jointly take regional area in order to increase employment opportunities and to development initiatives. Therefore, local government, decrease poverty rate significantly. community participation, and other existing resources should RESEARCH METHODS be able to estimate the resources required to design and develop economic of regions (Meyer and Venter, 2013). The method used is explanatory or confirmatory research by using a mixed approach. The quantitative approach involves The main problems in the development of a region lie in the sample surveys and interviews semi structures while implementation of development policy which is based on qualitative approach involving both case studies, individual particular regional characteristics (endogenous development) interviews or focus group by using Analytical Hierarchy by using the existing potentials, among others: human Process (AHP), Comparative Method Performance Index. resources, organizational structure, and role of the community Data obtained based on the list of commodities and products in areas such as SMEs (Arsyad, 1999 ). This orientation leads published by BPS (2015) after being confirmed by the to the emergence of innovation and creativity that comes from departments/agencies, used as a reference basis for selection the region itself in the process of development to create jobs of superior products that exist in each sub-district and then and to stimulate the increase of local economic activity. bring the results to the level of city/regency. Resource persons Therefore, according to Patterson (2008), the local in sub-district (head of the branch office, the head of the government must always seek to encourage community economy section, the head of sub-district statistical and field participation in using and utilizing all available resources and counsellor) gives the weight of each product featured by rank the need to develop and build the local economy by using (score 1-5), based on the following criteria: (1) the market sectoral economic base so that it can open up diverse range of products; (2) raw material conditions; (3) employment opportunities. For this purpose, it is necessary to contribution to the regional economy. Data analysis is prioritize sectoral policies in determining which are the main conducted through a focus group discussion to determine priorities to be developed into superior local products featured products in each sector in accordance with the Munzhedzi (2015). ultimate goal of development and the empowerment of SMEs, Featured Local Product namely: the ability to create products (1) economic growth; (2) employment; and (3) improvement of product In a regional economic development effort, a listing of competitiveness. potential areas/communities/areas is absolutely necessary in order to set policy on development patterns, both sectoral and RESULTS AND DISCUSSION multisectoral manner (Adams