Optimizing the Potential of Leather Micro Industry through Innovation and Product Diversification by the Department of Industry, Trade, Energy, and Mineral Resources of Garut Regency

Juliati Prihatini; I Made Aldy Wijaya

doi:10.32535/ijthap.v8i1.3750

Optimizing the Potential of Leather Micro Industry through Innovation and Product Diversification by the Department of Industry, Trade, Energy, and Mineral Resources of Garut Regency

Juliati Prihatini, I Made Aldy Wijaya

Abstract

Raw materials for sheepskin products are easily obtained in Sukaregang, Kota Wetan Village because it is a leather industry center. The Department of Industry, Trade, Energy, and Mineral Resources (Disperindag ESDM) of Garut Regency strives to improve the welfare of micro-industry business actors from leather through innovation and product diversification. The purpose of this study was to determine efforts to optimize local potential through innovation and product diversification carried out by the department, as well as inhibiting factors and efforts to overcome inhibiting factors. This research method is qualitative descriptive. Data collection techniques with observation, interviews, and documentation. Data analysis techniques include data reduction, data presentation, and drawing conclusions. The theory used is the optimization theory according to Siringoringo. The results of the study indicate that business actors have several inhibiting factors in efforts to optimize local potential. Efforts made by the Disperindag ESDM of Garut Regency to overcome these inhibiting factors include adding employees, providing capital assistance, and providing training and mentoring for product marketing through digital media and e-commerce.

Keywords

Business Welfare; Leather Micro-Industry; Potential Resource; Product Diversification; Product Innovation

Full Text:

PDF

References

Abbas, J., Zhang, Q., Hussain, I., Akram, S., Afaq, A., & Shad, M. A. (2020). Sustainable innovation in small medium enterprises: the impact of knowledge management on organizational innovation through a mediation analysis by using SEM approach. Sustainability, 12(6), 2407. https://doi.org/10.3390/SU12062407

Alma, B. (2010). Kewirausahaan [Entrepreneurship] (Rev. ed.). CV Alfabeta.

Anwar, A., Chaudary, R., Najihah, N. A., A., Athirah, N. A. A., Sakinah, N. A. M. E., Arisya, N. A., …, & Kee, D. M. H. (2024). The role of professional training in developing leadership skills among Information Technology sector employees. International Journal of Tourism & Hospitality in Asia Pasific, 7(3), 344-359.. http://dx.doi.org/10.32535/ijthap.v7i3.3572

Artomova, A., Davydova, I., & Korobko, D. (2023). Planning of innovative changes in development of the socio-economic systems. Preprints. https://doi.org/10.20944/PREPRINTS202307.1460.V1

Ayu, I. W., Nurwahidah, S., & Hartono, Y. (2021). Strategi pengembangan komoditas lokal untuk penerapan One Village One Product (OVOP) di Kabupaten Sumbawa [Strategi pengembangan komoditas lokal untuk penerapan One Village One Product (OVOP) di Kabupaten Sumbawa]. Jurnal Ekonomi Pertanian dan Agribisnis, 5(2), 306-314. https://doi.org/10.21776/UB.JEPA.2021.005.02.03

Bartolacci, F., Caputo, A., & Soverchia, M. (2020). Sustainability and financial performance of small and medium sized enterprises: A bibliometric and systematic literature review. Business Strategy and the Environment, 29(3), 1297–1309. https://doi.org/10.1002/BSE.2434

Braguinsky, S., Ohyama, A., Okazaki, T., & Syverson, C. (2021). Product innovation, product diversification, and firm growth: Evidence from Japan’s early industrialization. American Economic Review, 111(12), 3795–3826. https://doi.org/10.1257/AER.20201656

Budiman, B., Yunia, N., & Badrotusabila, B. (2022). Pengaruh diversifikasi produk terhadap kepuasan konsumen kerudung instan Rabbani di Rangkasbitung Lebak [The effect of product diversification on consumer satisfaction of Rabbani instant headscarves in Rangkasbitung Lebak]. Ad-Deenar: Jurnal Ekonomi Dan Bisnis Islam, 6(01), 89-106. https://doi.org/10.30868/AD.V6I01.2246

Central Agency of Statistics of Garut Regency (BPS Kabupaten Garut). (2021, February 26). Kabupaten Garut Dalam Angka 2021 [Garut Regency in Figures 2021]. BPS Kabupaten Garut. https://garutkab.bps.go.id/id/publication/2021/02/26/ce10c1ee0a8e01814340e334/kabupaten-garut-dalam-angka-2021.html

Devi, M. P., & Ramachandran, S. (2014). Innovation and Indian MSMEs: Emerging challenges and opportunities. Indian Journal of Applied Research.

Devi, R. J., Usha, R., Rajkishore S., K., & Raveendran, M. (2024). Development of economic value-added products from tea waste by thermal and microbial process for environmental sustainability. Biomass Conversion and Biorefinery. https://doi.org/10.1007/S13399-024-05410-X

Faruq, M. A. A., Bassalamah, M. R., Sudaryanti, D., & Azizah, N. N. (2023). Hedonic values and utilitarian values to improve behavioral intentions and consumer satisfaction on product. Aptisi Transactions on Technopreneurship (ATT), 5(3), 319-333. https://doi.org/10.34306/ATT.V5I3.345

Goenadhi, F., Utami, A. S., Usman, M. A., Prayoga, T. Z., & Rahmiati, F. (2023). Marketing strategy for Griya's micro-small medium enterprises' product in Tanjung Jaya Village. Asia Pacific Journal of Management and Education, 6(2), 46-55. https://doi.org/10.32535/APJME.V6I2.1630

Hanaysha, J. R., Al-Shaikh, M. E., Joghee, S., & Alzoubi, H. M. (2022). Impact of innovation capabilities on business sustainability in small and medium enterprises. FIIB Business Review, 11(1), 67-78. https://doi.org/10.1177/23197145211042232

Hao, X., Li, Y., Ren, S., Wu, H., & Hao, Y. (2023). The role of digitalization on green economic growth: Does industrial structure optimization and green innovation matter?. Journal of Environmental Management, 325, 116504. https://doi.org/10.1016/J.JENVMAN.2022.116504

Hitt, M. A., Hoskisson, R. E., & Kim, H. (1997). International diversification: Effects on innovation and firm performance in product-diversified firms. Academy of Management journal, 40(4), 767-798. https://doi.org/10.5465/256948

Husriadi, A., Yulianto, E., & Mawardi, K. (2020). Implementation of policies for micimplementation of policies for micro, small and medium enterprises (UMKM) development in increasing business competitiveness (study in micro, small and medium enterprises in Kendari City). The International Journal of Accounting and Business Society, 28(1), 28-72. https://doi.org/10.21776/UB.IJABS.2020.28.1.2

Ibrahim, I., Iskandar, S., Zitri, I., & Pratama, I. N. (2024). Socioeconomic-based management strategies for industrial areas in West Sumbawa Regency. International Journal of Sustainable Development and Planning, 19(9), 3509–3518. https://doi.org/10.18280/IJSDP.190919

Kurniawan, A., Noor, I., & Setyowati, E. (2022). Local economic development strategy through scenario planning approach (study on the development of rural agro-tourism areas in Banyuwangi). Wacana Journal of Social and Humanity Studies, 25(1). https://doi.org/10.21776/UB.WACANA.2022.025.01.01

Maya, S., Maya, S., & Yohanna, L. (2018). Identification of problems and solution of the micro small middle entreprise with Nvivo-software. Sosio E-Kons, 10(2), 121–130. https://doi.org/10.30998/sosioekons.v10i2.2606

Menne, F., Surya, B., Yusuf, M., Suriani, S., Ruslan, M., & Iskandar, I. (2022). Optimizing the financial performance of SMEs based on Sharia economy: Perspective of economic business sustainability and open innovation. Journal of Open Innovation: Technology, Market, and Complexity, 8(1), 18. https://doi.org/10.3390/JOITMC8010018

Miles, M. B., & Huberman, A. M. (2014). Qualitative Data Analysis: A Method Sourcebook (3rd ed.). Sage Publication.

Muangmee, C., Dacko-Pikiewicz, Z., Meekaewkunchorn, N., Kassakorn, N., & Khalid, B. (2021). Green entrepreneurial orientation and green innovation in small and medium-sized enterprises (SMEs). Social Sciences, 10(4). https://doi.org/10.3390/SOCSCI10040136

Nurcholidah, L., Yaqin, M. A., Hayu, N., Watin, S., Kusuma, E. N., & Pranata, M. B. (2024). The role of creativity and information technology in product diversification and its implications for increasing MSME Profits. Journal of Contemporary Administration and Management (ADMAN), 2(2), 554–560. https://doi.org/10.61100/ADMAN.V2I2.199

Osabutey, E. L. C., Seny Kan, K. A., Senyo, P. K., Arndt, F., & Röell, C. (2024). Technology transfer potential in local and foreign-owned firms in emerging economies. British Journal of Management. https://doi.org/10.1111/1467-8551.12814

Prayitno, E., Tarigan, N. L. L., Mauidzoh, U., & Sukmawaty, W. E. P. (2024). The revival of SMEs in Indonesia from the impact of the COVID-19 pandemic. Journal of the Community Development in Asia, 7(2), 230–245. https://doi.org/10.32535/jcda.V7I2.2950

Prieto-Sandoval, V., Jaca, C., Santos, J., Baumgartner, R. J., & Ormazabal, M. (2019). Key strategies, resources, and capabilities for implementing circular economy in industrial small and medium enterprises. Corporate Social Responsibility and Environmental Management, 26(6), 1473–1484. https://doi.org/10.1002/CSR.1761

Rainanto, B. H., Tinggi, S., & Kesatuan, I. (2019). Analisis permasalahan yang dihadapi oleh pelaku usaha mikro agar berkembang menjadi usaha kecil (scalling up) pada UMKM di 14 kecamatan di Kabupaten Bogor [Analysis of problems faced by micro business actors in order to develop into small businesses (scaling up) in MSMEs in 14 sub-districts in Bogor Regency]. Jurnal Ilmiah Manajemen Kesatuan, 7(1), 201–210. https://doi.org/10.37641/JIMKES.V7I1.213

Shi, J., Visas, H., Ul-Haq, J., Abbas, S., & Khanum, S. (2023). Investigating the impact of export product diversification on environmental degradation: Evidence from Chinese Provinces. Environment, Development and Sustainability, 25(10), 11455–11486. https://doi.org/10.1007/S10668-022-02536-8

Simon, J., Nasution, F. H., & Hasoloan, A. (2020). Identification of potential and development of medium small-medium enterprises (UMKM) in Celawan Village, Beach Mirror District, Serdang District, North Sumatera Province. Dharmawangsa: International Journal of the Social Sciences, Education and Humanitis, 1(3), 12–26. https://doi.org/10.46576/IJSSEH.V1I3.818

Siringoringo, H. (2005). Seri Teknik Riset Operasional Pemrograman Linear [Linear Programming Operational Research Techniques Series]. Graha Ilmu.

Sumitro, W. (2004). Asas-Asas Perbankan Islam dan Lembaga Terkait [Principles of Islamic Banking and Related Institutions]. Raja Grafindo Persada.

Timonen, K., Reinikainen, A., Kurppa, S., & Riipi, I. (2021). Key indicators and social acceptance for bioenergy production potential as part of the green economy transition process in local areas of lapland. International Journal of Environmental Research and Public Health, 18(2), 1–20. https://doi.org/10.3390/IJERPH18020527

Wise, N., Mulec, I., & Armenski, T. (2017). Towards a new local tourism economy: Understanding sense of community, social impacts and potential enterprise opportunities in Podgra?e Ba?, Vojvodina, Serbia. Local Economy, 32(7), 656–677. https://doi.org/10.1177/0269094217734329

Yazfinedi, Y. (2018). Usaha mikro, kecil, dan menengah di Indonesia: Permasalahan dan solusinya. Quantum: Jurnal Ilmiah Kesejahteraan Sosial, 14(25), 33–41.

Zhang, L., & Wan, J. (2024). The impact of cultural and creative products arising from intangible cultural heritage on economic development: A case study of Ebian County, China. Journal of Resources and Ecology, 15(4), 1106–1112. https://doi.org/10.5814/J.ISSN.1674-764X.2024.04.028

Zhao, K., Li, X., Hou, X., & Zhang, Y. (2024). Deep collaborative innovation product decision-making model based on multi-objective optimization. IEEE Access. https://doi.org/10.1109/ACCESS.2024.3439623

DOI: https://doi.org/10.32535/ijthap.v8i1.3750