Batik SMEs Efficiency and Entrepreneurship Role in Innovation

Abstract

In the long term, batik SMEs to compete in the local and global markets can not only rely on production capabilities rooted in local sources of uniqueness, but must have efficiency of economies scale for resource access and innovation. In a competitive environment, entrepreneurs in the batik industry have an important role to improve the efficiency. This study analyzed the role of entrepreneurs in the economic efficiency. This study applies production model to describe the entrepreneurs role on economic efficiency. The study was conducted by interviews to 100 Batik SMEs managers-owners in the Batik Centre in Solo, Pekalongan and Rembang. The entrepreneurs role in innovation in term of product innovation, marketing innovation, and business alliances (cooperatives). Data analysis was performed using Stochastic Frontier and Deterministic Regression Analysis. The empirical results of the technical inefficiency effects model suggest that the entrepreneurs role in product innovation, marketing innovation and business alliances are important factors affecting economic efficiency of batik SMEs. The role of entrepreneurship in marketing innovation has the highest elasticity of the production and sales of batik, and then followed by the role of entrepreneurs in new product innovation and business alliances.

Regional Innovation System in Rural Economic Institutional: Empirical Evidence From Semarang, Indonesia

“…Demand for inputs by business actors (farmers, fishermen, low traders and industrial entrepreneurs) is uncertain due to lack of liquidity and transactions for smallscale businesses. In addition, high input prices are combined with certainty the absence of output prices is an obstacle and inhibits smallscale business actors in rural areas to increase productivity and improve product quality to meet market needs (Kurniati et al, 2018). On the output side, the availability of infrastructure supports market information, quality control and inspection, and relations to the output market.…”

“…Innovation is not only done at the individual and organizational level but also at the system level. Innovation system which promotes knowledge-based economy, has been realized by many countries to improve national or regional competitiveness (Kurniati, Dian, & Prajanti, 2018;Kusharsanto & Handayani, 2017;Santos & Simões, 2014). The attention to the Regional Innovation System has grown significantly over the past three decades driven by interest in innovation as a source of competitive advantage, and the need for policies to address regional inequality (Asheim, Smith, & Oughton, 2011).…”

“…Based on New Institutional Economic Theory (NIE) (Williamson, 2015), development of the economic sector in rural areas can be done through institutional arrangements (micro level) and institutional environment (macro level). In the micro level, SMEs in rural areal can collaborate by: forming institutions (which are based on contracts, vertical and horizontal organizations, and partnerships), increasing governance in accessing resources (raw materials, information and market, finance, technology and innovation), increasing economic scale so that they have the ability to compete in the free market era (Brillyanes & Wilopo, 2018;Kurniati, 2013;Kurniati et al, 2018). In macro level, development of the economic sector in the countryside can be done through the function of regulation and rule of the system to reduce the lack of conventional economy.…”

Sustainability of Batik wastewater quality management strategies: analytical hierarchy process

“…The index rate is the economic aspect amounted to 0.1154. To install the WWTP with capacity 150m 3 systems, the batik SME needs investment cost around $ 70.4 thousand with operation cost around $6.34 thousand each year (Kurniati and Prajanti 2018). That cost investment can be a burden for them with the SMEs that have revenue of around $23.44 thousand each year (Kurniati and Prajanti 2018).…”

“…To install the WWTP with capacity 150m 3 systems, the batik SME needs investment cost around $ 70.4 thousand with operation cost around $6.34 thousand each year (Kurniati and Prajanti 2018). That cost investment can be a burden for them with the SMEs that have revenue of around $23.44 thousand each year (Kurniati and Prajanti 2018). One of the solutions is to make columnal wastewater treatment among the group SMEs within the same area, so the investment and operational cost can be shared among them.…”