Contribution of SMEs and SME Business in Bandung, Sumedang, Cianjur, Garut and Economic Improvement in the Region in West Java
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1 2015 International Conference of Organizational Innovation (2015 ICOI) 407 Contribution of SMEs and SME Business in Bandung, Sumedang, Cianjur, Garut and Economic Improvement in the Region in West Java Wien Dyahrini, Ibnu Rachman University Widyatama ac.id ac.id Abstract Micro Small and Medium Enterprises (SMEs) and Small and Medium Enterprises (SMEs) in the four cities of Bandung, Sumedang, Garut and Cianjur in West Java has a strategic role in economic development in West Java, because in addition to a role in economic growth andemployment work also plays a role in the distribution of development outcomes.this study analyzes the contribution of business conducted SMEs and SMEs in four cities of Bandung, Sumedang, Garut and Cianjur in order to achieve economic improvement in the four cities in terms of Gross Domestic Regional Product (GDRP) of each of the city coming from the SME sector and SMEs.Unit population in this study is SMEs and SMEs that have partnered businesses with medium-sized companies or other economic institutions in Bandung, Sumedang, Garut and Cianjur in West Java. In this study used survey methods, while the technique of data collection by means of random sampling and taken a sample of 151 respondents. Other data sources are derived from secondary data from institutions associated with the research. Based on the results obtained by the fact that SMEs and SMEs in all the four cities have been able to contribute to the value of regional gross domestic product (GDRP) at current prices of the four cities in West Java on average by 15%. While the contribution of SMEs to GDP West Java amounted to 6.53%, thus it can be concluded that the role of SMEs and SMEs have a considerable contribution to the development of the economy in West Java. Keyword: SMEs, SMEs, Business, GDRP
2 International Conference of Organizational Innovation (2015 ICOI) Background of Problems Perpetrators of Micro, Small and Medium Enterprises (SMEs) is a part of society in a regionthefour cities of Bandung, Sumedang, Garut and Cianjur in West Java that in the era of regional autonomy is one of the potential that continue to be encouraged by local governments in the respective each of the city. So that SMEs can run well, then the perpetrators should get feedback from productive activity does. Related to the economic activity that has been done will mean increased revenue for SMEs itself, which will also provide added value in their business activities. This activity will result in the increase of production activities carried out by SMEs are supported by the activities of the creative industry and trade is largely informal sector. Therefore, to stimulate productive activities that have been carried out by SMEs traditionally ie they have consistently they do still need to go ahead and even continue to be developed into a category of creative industries in West Java. This is expected to spur local economic activity in order to run a sustainable and even expectedto increase gradually. There are many views on the business of SMEs which can be grouped into several business criteria, namely: a business that is used as an opportunity to work for a living, which is more commonly known as the informal sector, which has properties craftsmen businesses but do not yet have an entrepreneurial nature, the business has an entrepreneurial spirit and able to accept work subcontracted and exports, and businesses that already have an entrepreneurial spirit and a will to transform into, medium or large businesses. SMEs in developing countries, such as Indonesia are often associated with problems of economic and social in the country such as high levels of poverty, the magnitude of unemployment, unequal distribution of income, the uneven development between urban and rural areas, as well as the problems of urbanization. In this regard the development of SMEs is expected to provide a significant positive contribution to the alleviation efforts these issues over more intensively. Economic activities involving SMEs in a region very varied, both in terms of the type of business that developed, the labor involved and the ability of capital. As is known to the program of each local government to include the role of the economic actors of the informal sector, some of them are from the SME sector to be able to become one of the pillars of which is expected to be able to contribute in the area of economic activities. Each component of the community members should be actively involved and take part in the development of the movement based on the principles of self-empowerment. Thus every individual is entitled and obliged to contribute its potential in the development movement. In this paradigm, as small and weak as any quality of human resources (HR) and potential of a person must be empowered effectively, either for himself or for others as has been done by the perpetrators of these SMEs. Economic institutions developed according to the dynamics of economic progress by applying the principles of local governance is good, namely: maintaining a healthy competition and consumer protection, promote the development of standardization of products and services to improve competitiveness, formulate strategies and policies in accordance with the technological development of economic development area, and
3 2015 International Conference of Organizational Innovation (2015 ICOI) 409 improve the competitiveness of micro, small and medium enterprises (SMEs) in various district of Bandung, Garut and Cianjur thus become an integral part of the overall economic activity and strengthen the economic base areas in West Java. MSME development is directed to become economic actors who originally traditionally can be increased in accordance with the developments of his time is increasingly based on science and technology (Science and Technology) where this is not an easy task for SMEs, but this is a challenge and is a must for competitiveness against imported products, especially in the provision of goods and services the needs of the community, so that they can make a significant contribution to the structural change and will eventually be able to strengthen the regional economy itself. Based on the experience that has been faced by Indonesia at the time of the crisis in 1997 in which the SME sector and SMEs were able to withstand the crisis, it is not excessive if the private sector is focused on the development of SMEs and SME, moreover, this business unit is often overlooked simply because their products on a small scale and have not been able to compete with other business units were larger and had a large, namely from bigies companies that have been in operation as well as produce goods or services first in Indonesia Identification of Problems In this study intended to identify the contribution of MSME business conducted in four cities in the achievement of economic improvement in the four cities in West Java can be expressed as follows: 1. How does the business contribution of SMEs and SMEs in order to develop the economy and businesses in the four cities of Bandung, Sumedang, Garut and Cianjur in West Java 2. How big is the contribution of SMEs and SME business in the four cities of Bandung, Sumedang, Garut and Cianjur to the achievement of the increase in GDP in West Java Purpose and Objective of Problems The intent and purpose of this study to ascertain the contribution of MSME business conducted in four cities of Bandung, Sumedang, Garut and Cianjur in order to achieve economic improvement in the four cities. Furthermore, the purpose of this study are: 1. To determine the contribution of SMEs and SME business in the context of economic and business development in four cities of Bandung, Sumedang, Garut and Cianjur in West Java 2. Knowing how big the contribution of SMEs and SME business in the four cities of Bandung, Sumedang, Garut and Cianjur to the achievement of the increase in GDP in West Java.
4 International Conference of Organizational Innovation (2015 ICOI) II. THEORETICAL BASIS 2.1. Definition of SMEs and SME Understanding MSMEs (Micro, Small and Medium Enterprises), Small and Medium Enterprises (SMEs) are the types of businesses most numerous in Indonesia, but this time limitation on the criteria of small businesses in Indonesia are still diverse. Little understanding in small businesses are relative, so it needs no limit definitions of the various terms of small businesses. The Central Statistics Agency (BPS) provides a definition of SMEs based on the quantity of labor. Small business is a business entity that has a workforce of 5 to 19 people, while medium-sized businesses are entitias business has a workforce of 20 up to 99 people. Based on the Ministry of Finance No. 316 / KMK.016 / 1994 dated June 27, 1994, the small business is defined as an individual or business entity that has conducted activities / businesses that have sales / turnover per year maximum of Rp 600 million or assets / asset-high Rp 600,000,000 (excluding land and buildings occupied) consists of: (1) badang effort (Fa, CV, PT, and cooperatives) and (2) individual (craftsmen / industrial households, farmers, ranchers, fishermen, forest squatters, miners, merchants of goods and services). On July 4, 2008 has been designated Law No. 20 of 2008 on Micro, Small and Medium Enterprises. SME definition given by this Act is also different from the definition above. According to Law No. 20 of 2008, the so called Small Business is an entity that has the following criteria: (1) The net worth of more than Rp. 50,000, (fifty million rupiah) up to a maximum of Rp 500,000, (five hundred million rupiah) not including land and buildings; and (2) has an annual sales turnover of more than Rp300,000, (three hundred million rupiah) up to a maximum of Rp 2,500,000, (two billion five hundred million rupiah). Meanwhile, the so-called Medium Enterprises is a business entity that has the following criteria: (1) The net worth of more than Rp 500,000, (five hundred million rupiah) up to a maximum of Rp 10,000,000, (ten billion rupiah ) excluding land and buildingsplace of business; and (2) has an annual sales turnover of more than Rp ,00 (two billion five hundred million rupiah) up to a maximum of Rp 50,000,000, (fifty billion rupiah) Business and Business Definition Business definition according to experts, is a word with many meanings and usage. In a narrow sense means business in busy state. However, it contains a lot of business sense connotations since the word is used in all business people are busy economic activity. In terms of more stringent in the economy, the purpose of business is to create a customer / consumer for a profit. In reality, only some parts of the activities organized individual who is regarded as a business activity that is as it relates to the fulfillment of human needs or living thing. Business understanding according to Hooper, that business is everything and the overall complexity that exist in various fields such as sales (commerce) and industry, basic industry, processing and manufacturing industries and networks, distribution, banking, insurance, transportation, and so on that later serve and enters as a whole (which serve and
5 2015 International Conference of Organizational Innovation (2015 ICOI) 411 interpenetrate) the business world as a whole.griffin and Ebert (1996)"Business is all Reviews those activities Involved in providing the goods and services needed or desired by the people". In this sense as a business activity that provides goods or services that are required or desired by the consumer. Can be done by corporate organizations that have a legal entity, a company that has business entities, and individuals who do not have the legal entity or entities such as street vendors, stalls that do not have a location permit (AIS) and the location permit (License) as well as other informal businesses. Allan Afuah (2004) "Business is the organized effort of individuals to produce and sell for a provit, the goods and services that satisfy needs societies. The general terms of business refer to all such Efforts within a society or within an industry.business intention is an individual business activities are organized to produce and sell goods and services in order to gain an advantage in meeting the needs of the community and in industry. People who seek money and time by taking the risk in running a business called Entrepreneur Definition of Gross Domestic Regional Product (GDRP) Gross Domestic Regional Product of a region is the value of all products and services produced in the region regardless of whether the factors of production comes from the region or not. The revenue raised by the production activities are domestic revenues. While the definition of the domestic territory or region is covering an area that is located in the geographical area of the region.the fact that the case shows that some factors of production of the production activity in a region coming from other regions. The factors of production owned by the region were also in the process of production in other regions. In other words, Gross Domestic Product (GDP) shows a picture of "Production originate". This causes the value of domestic production arising in a region is not the same as the income received by residents of the region. With the revenue stream (generally in the form of salary / wages, land rent, capital interest and profits) that flows between regions (including from / to overseas), then the resulting difference between Domestic Product by Regional Product. Regional products are domestic product plus income from outside the area minus income paid outside the region. In other words, Regional Product is a product that is caused by factors of production owned by residents of the region. Definition of GDP is the sum of value-added goods and services produced of all activities throughout the region in a given year or a certain periode and usually one year. GDP calculation using the two kinds of prices are current prices and constant prices. GDP at current prices is the price on the added value of goods and services is calculated using the prices prevailing during the year while at constant prices is calculated by using the prices in a given year as the base year. GDP at Current Market Prices Total gross value added (gross value added) arising from all sectors of the economy in a region (region). Which meant that Added Value is the value added to goods and services that are used by the units of production in the production process as intermediate inputs.
6 International Conference of Organizational Innovation (2015 ICOI) GDP at Constant Prices Economic growth from year to year, to show the overall rate of economic growth or each sector from year to year. GDP at constant prices is useful to know the real economic growth per capita. III. OBJECT AND METHODS 3.1. Research Object and Scope The object of the research is done by limiting the scope of the research is the business of SMEs and SMEs from For the scope of the research contribution of SMEs and SME business is all SMEs and SMEs in the four cities of Bandung, Sumedang, Garut and Cianjur in West Java The research method This study analyzes the contribution of business conducted SMEs and SMEs in four cities of Bandung, Sumedang, Garut and Cianjur in order to achieve economic improvement in the four cities of Bandung, Sumedang, Garut and Cianjur in West Java in relation to GDP of each of these cities are coming of the SME sector and SMEs. Unit population in this study is SMEs and SMEs that have partnered businesses with medium-sized companies or other economic institutions in Bandung, Sumedang, Garut and Cianjur in West Java. In this study used survey methods, data collection techniques while random manner, ie research that takes information from respondents with the process of sampling and data collection using a list of questions that have been structured in the form of questionnaires, and secondary data obtained from government agencies and related areas, the number of samples taken in the period between 2010 up to 2012, amounting to 151 respondents. IV. DISCUSSION Based on the above circumstances, the thing to note is the activity that has been carried out by the perpetrators of SMEs and SMEs in the four cities. For economic activity can be said that the business activities of the SMEs and SME was able to contribute fairly good for economic activities is through donations in the amount of gross domestic product generated by each city. In connection with this program of local government in strategic planning that is made must be implemented in integration, which is not implemented only by one party only. The program is structured as a reference for local governments in each of the four city districts of Bandung, Sumedang, Garut and Cianjur in order empowerment goes well targeted, which include: the right time, right location, the right quantity and the right quality. Empowerment of SMEs and SMEs to economic development and the business world require the data and information in the form of the actual condition of the structure type of business and the business climate that exist in the community, so that the measures taken can be an effective local government. Seen also how much the contribution of SMEs and SME business is in regional gross domestic product (GDP) of the respective districts and four cities in the city of Bandung, Sumedang, Garut and Cianjur. Furthermore, based on the data and the
7 2015 International Conference of Organizational Innovation (2015 ICOI) 413 information can be used as a basis for formulating policies to develop the economy and business world in the four cities can be seen in Table 1 below. Table 1 Comparison Contributions SMEs to GDRP of West Java Year Contribution to GRDP Growth in GRDP West Java Total ( Rp/ trillion) Percentage(%) ,59 6, ,98 6, ,86 7, ,18 9,66 Source: BPS (processed data) When considered based on the data table 1 above, Micro, Small and Medium Enterprises (SMEs) and SME have a significant role in regional economic development looks of contribution to Gross Regional Domestic Product (GRDP) of West Java. Every year did show growth rates that are not the same, but still showed the increased rate and the greater is the average of 6.53%, namely the development of SMEs and SMEs themselves. As for the Gross Regional Domestic Product (GDP) in 2013 grew by 9.66 per cent compared with The amount of GRDP of West Java in 2013 reached Rp trillion. Furthermore, in the other hand for SMEs and SMEs are strengthening the funding issue has been pursued through cooperation with banks, among others, of Bank Jabar Banten (BJB), as well as other banks. One of these banks have carried out that people love Credit activities of Bank Jabar Banten. Attention of the Government has not been sufficient, it is still a little caused SMEs and SMEs are still untouched by government assistance. On the other hand apart from the government there is also support from the stateowned enterprises or private companies to SMEs and SME's, but unfortunately still not evenly distributed and most fields are adequately supported and nurtured is in the field of finance or funding. Though the problem of MSMEs not only on the financial sector, but also in the field of management or managerial which will determine the sustainability of their businesses. The managerial field is also closely related to the function of the company's operations in the areas of marketing, production and human resource management.
8 International Conference of Organizational Innovation (2015 ICOI) Table 2 The value of GDP at Current Market Prices Based on the four regencies / cities in West Java Year Regency/City/ GDRP (Rp./ Trillion) Provincial Bandung 63,63 70,64 78,79 Cianjur 18,44 20,57 22,27 Garut 24,84 27,49 30,15 Sumedang 12,27 13,53 14,92 Jawa Barat 771,59 860,98 946,86 Source: BAPPEDA West Java (2012) the data is processed. When observed from some of the data submitted by the government that micro, small and medium enterprises (SMEs) and small businesses puff (SMEs) for the four cities that have a significant role in regional economic development in West Java. It is evident from the contribution to the Gross Domestic Regional Product (GDRP) of West Java continues to increase every year. The significant contribution of SMEs is the case in West Java, where an increase in the role of SMEs to the Gross Regional Domestic Product (GDRP) from year to year is becoming increasingly large at around trillion (15%) in 2010 to (15%) year 2011 and trillion in 2012 (15%). Can be compared based on data from Table 2 above shows the difference in GDRP which is an increase every year and increasingly large, as well as showing the development of SMEs and SME businesses are quite significant that in 2010 reached trillion and into trillion in On the average, an increase in the number of businesses over three years to reach around Table 3 Total Business Unit, Small and Medium Industry In West Java According to Four Regency / City Year Regency/City/ Provincial Business (unit) / Year Bandung 12,269 12,273 12,283 Sumedang 5,030 5,052 5,052 Cianjur 1,211 1,236 1,236 Garut 9,763 9,801 9,801 Jawa Barat 198, , ,723 Source: BAPPEDA West Java (2012) the data is processed. When observed from Table 3 above, it turns out that in a number of businesses were presented by the government that Micro, Small and Medium Enterprises (SMEs) and small businesses puff (SMEs) for the four cities show the number increased significantly, it is proved that the contribution of SMEs and SMEs in West Java regional economic development is quite significant.. It is evident from the contribution to the total number of operators in this sector increased steadily every year in West Java. Contribution to the increase of the number amounted to (14%) in 2010, was increased to (14%) in 2011, and became (14%) in This indicates that the increase in the number of SMEs and SME entrepreneurs
9 2015 International Conference of Organizational Innovation (2015 ICOI) 415 This significant occurs in MSMEs in West Java, where the increase in the role of SMEs on thenumber of business entrepreneurs also becomes larger. Table4 TotalBusiness Unit, Industry GreatIn West JavaBy Regency / CityYear Regency/City / Business Unit/Year Provincial Kab. Bandung 1,200 1,200 1,200 Kab. Sumedang Kab. Cianjur Kab. Garut Jawa Barat /West Java 3,475 3,523 3,592 Source: Office of Industry&Commerceof West Java province, (dataprocessing) BasedonTable4 above, it turns outthat in anumber oflargeindustrialbusinessesin the development ofrelatively smalleramountcompared to thenumber ofsmes andsmedevelopmentfor thefourcities.this showsthat the number oflargeenterprisesincreaserelativeslowerandevenless likelyto grow. This condition is seenfrom the numberamounted to1,297(37%) in 2010, amounted to1,298(37%) in 2011, andcontinues to be1,298(37%) in 2012.This indicatesthat theincrease in the numberof large industrialbusinessesless significant. Table 5 Working Population by Industry In West Java For Regency / City Year 2012 No Regency/City / Industry (person) Trade (person) Provincial 1 Bandung Sumedang Garut Cianjur Jawa Barat Source PUSDALISBANG Prop. Jabar 2012,( the data processed) Furthermore, in Table 5, expressed to the number of people working in the industry and trade sectors are also included in the SMEs and SME keeping a significant position of the four cities, which reached 82.75% in quantity and 83.07% in industry trade, This situation shows that the industrial and commercial sector is a sector that is pretty much in demand by the population in the four cities of Bandung, Sumedang, Garut and Cianjur in West Java. Therefore, it is proper that the presence of these two sectors should be able to be kept and maintained by the local government because it has a major role in improving the economy in the four cities in West Java.
10 International Conference of Organizational Innovation (2015 ICOI) IV. CONCLUSIONS AND SUGGESTIONS a. Conclusion From the results above can empirically ditarik some conclusions as follows: 1. Usaha Micro Small and Medium Enterprises SMEs and SMEs in four cities of Bandung, Sumedang, Garut and Cianjur in West Java has a strategic role in economic development in West Java because in addition to a role in economicwithdrawngrowth and employment also contributed to the growing role regional gross domestic product (GDP) in West Java on average by 6.53% for the economy in West Java., 2. The significant contribution of SMEs have occurred in West Java, where the greater role played by SMEs to the Gross Regional Domestic Product (GDP) from year to year is becoming increasingly large at around trillion (15%) in 2010 to (15% ) in 2011 and trillion in 2012 (15%). On the average increase in GDP over the three years to reach about 15%. 3. It is evident from the contribution to the total number of operators in this sector increased steadily every year in West Java. Contribution to the increase of the number amounted to (14%) in 2010, was increased to (14%) in 2011, and became (14%) in Businesses large industry in the development of relatively smaller amount compared to the number of SMEs and SME development for the four cities. This shows that the number of large enterprises increase relative slower and even less likely to grow., This shows that an increase in the number of large industrial businesses less significant. 5. Industry and trade sector is a sector which is pretty much in demand by the population in the four cities of Bandung, Sumedang, Garut and Cianjur in West Java. Furthermore, to the number of people working in the industry and trade sector is also included in the average SMEs and SME very significant, reaching the amount of 82.75% in industry and 83.07% in trading. b.suggestions As for suggestions thatcan be deliveredin this study are: 1. SMEsandSMEs need togetthe most attentionfrom both the governmentand societyin order to growmore competitivealong withother economic actors. 2. Nextgovernmentneeds to be pursuedmore conducive to thegrowth and development ofsmesandsme. The governmentneeds toincreaseits role inempoweringsmesandsmesin addition to developinga mutually beneficialbusiness partnershipbetweensmall entrepreneursandmicro entrepreneursandbankindonesiaandimprove thequality ofhuman resourcesandother resourcesownedbysmesandsme. 3. Always bemaintainedtocontinue tomaintainthe populationworking in thesectorsof tradeandindustry, because itproved to be asectorthat ismuch in demand bythe populationinthe four cities ofbandung, Garut, SumedangandCianjurin West Java province.
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