Technology Improvement and Micro, Small, and Medium Enterprises (MSMEs) on Regional Development in Special Region of Yogyakarta

Rian Marita Sugiarto; Doddy Aditya Iskandar

doi:10.12928/optimum.v13i1.3829

Authors

Rian Marita Sugiarto Gadjah Mada University
Doddy Aditya Iskandar Gadjah Mada University

DOI:

https://doi.org/10.12928/optimum.v13i1.3829

Abstract

A new perspective on regional economic development is development capital generated from the region. MSMEs and Higher Education as development capital of the Special Region of Yogyakarta (DIY) have different characteristics. Development is recognized as a process in which interrelationships and effects between the variables lead to regional development. Therefore, it is necessary to identify the effect of regional development capital on regional development. This study aims to examine the use of PLS-SEM in designing a model of the relationship between technological innovation, capital, and workforce on regional development. This current study also aims to observe the effect of latent predictor variables (X_i) of technology, innovation, capital, and workforce on LPE, HDI, and poverty rate as the latent dependent variable of regional development (Y_i). Regional development capital has a positive effect on LPE. Technology has a positive and significant effect on innovation by 92.6%. Innovation Technology positively affects Economic Growth by 14.44% but is not significant. Though it is not significant, regional capital proxied by MSMEs positively affects economic growth. The workforce has a negative and insignificant effect on the economic growth of -28.3%. LPE and HDI have a negative effect on the poverty rate, although not significant at -6.8% and -13.3%, respectively. LPE and HDI play a role in reducing poverty. However, they perform on different paths. Workforce productivity is still low. Thus, it has not been able to boost economic growth and reduce poverty. These results are expected to be utilized as a basis for developing strategies for technology utilization by MSMEs

References

Arsyad, L. (2010). Ekonomi Pembangunan (5 ed.). UPP STIM YKPN.

Badan Pusat Statistik. (2019). Analisis Hasil SE2016 Lanjutan “Efisiensi Industri Manufaktur Daerah Istimewa Yogyakarta.” Diambil dari http://library1.nida.ac.th/termpaper6/sd/2554/19755.pdf

Batabyal, A. A., & Yoo, S. J. (2018). Schumpeterian creative class competition, innovation policy, and regional economic growth. International Review of Economics and Finance, 55(December 2017), 86–97. https://doi.org/10.1016/j.iref.2018.01.016

Dodgson, M., Rothwell, R., Lissoni, F., & Metcalfe, J. S. (2013). Diffusion of Innovation Ancient and Modern: A Review of the Main Themes. The handbook of industrial innovation, (March). https://doi.org/10.4337/9781781954201.00015

Florida, R. (2012). The Rise of the Creative Class--Revisited: 10th Anniversary Edition--Revised and Expanded. Diambil dari http://www.amazon.com/The-Rise-Creative-Class-Revisited-Edition-Revised/dp/0465029930

Hair, J. F., Hult, G. T. M., Ringle, C. M., & Sarstedt, M. (2017). A primer on Partial Least Squares Structural Equation Modeling (PLS-SEM) (2 ed.). https://doi.org/10.1080/1743727X.2015.1005806

Hamdani, J., & Wirawan, C. (2012). Open Innovation Implementation to Sustain Indonesian MSMEs. Procedia Economics and Finance, 4(Icsmed), 223–233. https://doi.org/10.1016/S2212-5671(12)00337-1

Iskandar, D. A. (2014). Assessing urban freeway deconstruction : a survey of 21 cities with case studies of San Francisco and Milwaukee. Diambil dari https://doi.org/10.18297/etd/661

Kardoyo, H., Handoyo, S., Triyono, B., & Laksani, C. S. (2011). Kebijakan Paten Dalam Mendorong Aktifitas Inovasi di Indonesia. Jakarta: LIPI Press.

Kuncoro, M. (2018). Metode Kuantitatif Teori Aplikasi untuk Bisnis dan Ekonomi (5 ed.). Yogyakarta: UPP STIM YKPN.

Langroodi, F. (2018). Schumpeter’s Theory of Economic Development: A Study of the Creative Destruction and Entrepreneurship Effects on the Economic Growth. SSRN Electronic Journal, (May). https://doi.org/10.2139/ssrn.3153744

Maitra, B. (2016). Investment in Human Capital and Economic Growth in Singapore. Global Business Review, 17(2), 425–437. https://doi.org/10.1177/0972150915619819

Martawardaya, B., Nugroho, A. S., & Firdaus, A. H. (2018). Peran Investasi Sektor Teknologi Informasi dan Komunikasi (TIK) serta Paten terhadap Pertumbuhan Ekonomi Indonesia. INDEF Monthly Policy Brief, 1(2), 1–4. Diambil dari http://indef.or.id/wp-content/uploads/2018/03/IMPACT-Volume-1-Issue-2-Maret-2018-E-Commerce-1.pdf

Piketty, T. (2014). Capital in the Twenty-First Century. Cambridge: The Belknap Press of Harvard University Press. https://doi.org/10.4159/9780674369542

Pramono, R. W. D., & Suminar, R. E. (2019). Ekonomi Wilayah untuk Perencanaan Tata Ruang (1 ed.). Yogyakarta: Deepublish.

Rustiadi, E., Saefulhakim, S., & Panuju, D. R. (2011). Perencanaan dan Pengembangan Wilayah (2 ed.). Jakarta: Yayasan Pustaka Obor Indonesia.

Santosa, P. I. (2018). Metode Penelitian Kuantitatif Pengembangan Hipotesis dan Pengujiannya Menggunakan SmartPLS (1 ed.; Giovanny, ed.). Yogyakarta: Andi Offset.

Sulistyastuti, D. R. (2004). Dinamika Usaha Kecil Menengah (UKM) Analisis Konsentrasi Regional UKM di Indonesia 1999-2001. Jurnal Ekonomi Pembangunan, 9(2), 143–164.

Todaro, M. P., & Smith, S. C. (2011). Pembangunan Ekonomi (11 ed.; A. Maulana & N. I. Sallama, ed.). Jakarta: Erlangga.