THE DEVELOPMENT OF HUMAN CAPITAL AS A COMPETITIVE STRATEGY, NOW AND FUTURE. Wahyuddin Latunreng*) ABSTRACT

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1 THE DEVELOPMENT OF HUMAN CAPITAL AS A COMPETITIVE STRATEGY, NOW AND FUTURE Wahyuddin Latunreng*) ABSTRACT Indonesia's economy has increased from 2010 to 2011 and estimated of 6.7 percent. Despite the high growth but Indonesia position still remain below the level of other countries in Asia and even the world. The data is reinforced by the data rate of workers education in Indonesia. Objective : To analyze whether there is a relationship between human capital development with a competitive strategy and to find out the solusion strategies. Research methods : Regression between human capital development with a competitive strategy and qualitative analysis of the solutions to problems. Results : Human capital development affect competitive strategy and there are 5 (five) solution strategies to overcome the problem of employment. Based on data from the Central Bureau of Statistics Indonesia, the total labor in Indonesia in February 2012 reached million, increased of approximately 3 million people compared to the labor in August 2011 or increased of 1.0 million people compared to February, The number of people working in Indonesia in February 2012 reached million, increased, compared to the state in August During the last year (February 2011 to February 2012), the number of people working has increased, especially in the trade sector about 780 thousand people and the Financial Sector for 720 thousand people. While the sectors are Agriculture decreased 1.3 million and the Transport Sector, Warehousing and Communications 380 thousand. In February 2012, workers at the primary education level down still dominates in the amount of 55 million people, while workers with diplomas approximately 3.1 million people or 2.77 percent and workers with education universities only 6.43 percent. The Problem of Employment in the Economy in Indonesia

2 In the same period the employment data above, the Indonesian economy grew by 6.1 percent in 2010, 6.4 percent in 2011 and an estimated 6.7 percent in late In estimating the economic development of Indonesia, identified several challenges that must be addressed, such as : the level of investment in Indonesia's gross domestic product by 30 percent despite equivalent to many other countries, such as China, India, and South Korea, but the power of this investment to economic growth is not optimal, compared with other countries in the ASEAN region, Indonesia's progress in infrastructure development is still lagging behind, Indonesia's investment climate must be improved because Indonesia is still ranked in position 121st (version Global Rank in Doing Business), which, although more both from the Philippines and Cambodia, each of which is still under Singapore which is in the first position, Thailand and Malaysia. Based on initial observations (ofcourse) the ability of labor conditions in Indonesia correlated with ratings of the Indonesian economy at the international level both in Asia and worldwide. Phenomenon in Indonesia is supposed to improve the economy is higher, as have been achieved by Indonesia when under the rule of President Suharto before 1998 with vast natural resources and a very large area compared to other countries in Southeast Asia even to South Asia in Indonesia's labor problem is the low quality of workers represented by a low level of education by the number of primary school educated work force by 49 percent while the educated bachelor is only about 6.4 percent. Thus the main problem to be solved for companies in Indonesia and even Indonesia as a country can compete is to improve the quality of the labor with a variety of policies and strategies undertaken by universities in Indonesia. To further assure that the quality of the worker is the key to improve performance in the company can be seen from several previous studies (Asia and Africa) in different countries, especially in Asia and Africa to discuss about the relationship between human capital management with the competitive strategy. Relationship between Human Capital Development with Competitive Strategy.

3 There are many opinions importance of the quality of labor in the economy as has been researched by Esther Wangithi Waiganjo, Elegwa Mukulu, James Kahiri entitled "Relationship between Strategic Human Resource Management and Firm Performance of Kenya's Corporate Organizations". In their research in 2012, Esther, Elegwa and Kahiri stated that rapid environmental changes, competition to provide innovative products and services, changing customer and investor demands and globalization have become the standard backdrop for firms. Sustained competitive advantage could be generated from a firm s human capital by designing strategic human resource management to diagnose a firm s strategic needs which is required to implement a competitive strategy and achieve operational goals. Effective human resource management strategy systematically organizes all individual human resource management measures to directly influence employee attitude and behavior in a way that leads business to achieve its competitive strategy. The result of research explains that there are the relationship between strategic human resource management, competitive strategies and firm performance. Waseef Jamal and M. Saif Iqbal (2011) in their study entitled Impact of Human Capital Management on Organizational Performance, and said that there is relationship between human capital management and organizational performance. Hypotheses were developed to test the impact of Human Capital Management on the performance of organizations of company. Petra De Saa-Perez and Juan Manuel García-Falcón (2002) has conducted a study entitled "A resource based view of human resource management and organizational development capabilities". Perez and Falcon (2002) said that from empirical research on a nation-wide sample of Spanish savings banks, suggest that human resource decisions, integrated in a human resource system, have an important on the development of organizational capabilities and on the firm's performance. Related to what the Perez and Falcon (2002), Jamal and Saif (2011), as well as Waiganjo, Mukulu, Kahiri (2012), the issue of employment in Indonesia is a very important issue because labor is one of the factors that affect the country's development Indonesia in the future. If Indonesia can improve the quality of the labor, estimated condition of the company work in Indonesia will increase performance to growth in Indonesia will also be pushed up, to match the economic growth of other countries in the world. Currently, companies in

4 Indonesia can not compete with other companies owned by foreign investors in Indonesia using labor which have better quality from the outside of Indonesia. Research Methods The research in this paper was conducted using quantitative analysis by regression between the variables used to examine the relationship between Human Capital Management with Competitive Strategy and perform qualitative analysis followed by direct application of some strategic solutions to address employment issues. Results Based on the regression performed between the variables is the dimension of human capital management with the competitive development and qualitative analysis of the appropriate approach to be applied to education and community service programs in Indonesia resulted that the dimensions of the Human Capital Development to significantly affect the dimensions of the Strategic Competitive, meaning that human capital development should be done to improve the company's competitivestrategy. Literature Perez, Petra De Saa and Falcon, Juan Manuel Garcia A resource-based lew of human resource management and organizational capabilities development,international Journal of Human Resource Management 13. Jamal Waseef, Saif M. Iqbal Impact of Human Capital Management on Organizational Performance, Department of Management Sciences, Foundation University Islamabad, Pakistan Waiganjo, Esther Wangithi, et al Relationship between Strategic Human Resource Management and Firm Performance of Kenya s Corporate Organizations.

5 International Journal of Humanities and Social Science Vol. 2 No. 10 [Special Issue May 2012] 62 Lampiran Biro Pusat Statistik, Berita Resmi Statistik, No. 33/05/Th. XV, 7 Mei 2012 EXIBITH Tabel 1 Penduduk Usia 15 Tahun Ke Atas Menurut Jenis Kegiatan Utama, (juta orang) Jenis Kegiatan Utama 1. Angkatan Kerja Bekerja Penganggur 2. Tingkat Partisipasi Angkatan Kerja (%) 3. Tingkat Pengangguran Terbuka (%) 4. Pekerja tidak penuh Setengah penganggur Paruh waktu *) 2012 (1) Agustus (2) (3) Agustus (4) (5) 116,00 116,53 119,40 117,37 120,41 107,41 108,21 111,28 109,67 112,80 8,59 8,32 8,12 7,70 7,61 67,83 67,72 69,96 68,34 59,66 7,41 7,14 6,80 6,56 6,32 32,80 15,27 17,53 33,27 15,26 18,01 34,19 15,73 18,46 34,59 13,52 21,06 *) Sejak tahun 2011 menggunakan penimbang penduduk berdasarkan hasil SP2010 (final) Sumber : Biro Pusat Statistik 35,55 14,87 20,68