Village-Owned Enterprises Performance and Rural Entrepreneurship Development in Central Java

Abstract

Rural entrepreneurship in Indonesia is implemented through Village-Owned Enterprises (BUMDesa). Village-Owned Enterprises has a vital role as a collective economic institution that aims to optimize the welfare of rural communities and develop village potential. However, the implementation and effect of the Village-Owned Enterprises s program are questionable. Thus, this study aims to investigate the role of Village-Owned Enterprises in encouraging rural entrepreneurship and strengthening rural economic development. In addition, this study also explores the challenges and performance of Village-Owned Enterprises. This study uses a qualitative method with a case study approach. Data were obtained through in-depth interviews: this research interviews some society, Village-Owned Enterprises administrators, village heads, and village secretaries. The results show that Village-Owned Enterprises are proven to encourage rural entrepreneurship with the dimensions of exploration and empowerment, capacity building, and all stakeholders' support and involvement. The village government provides a capital stimulus through village funds so that Village-Owned Enterprises can develop sustainable businesses. During the pandemic, Village-Owned Enterprises can continue to run their business. Except for Village-Owned Enterprises with tourism business units, their income has decreased significantly. The challenge faced by Village-Owned Enterprises is the weak commitment of the management and traditional management. So that innovation is needed in developing the business.

Empowering village-owned enterprises: Examining leadership, innovation and government support

“…The challenges are complex and involve various aspects such as constraints in human resource s, limited availability of capital for businesses in rural regions, underutilization of local natural resources, a lack of promotional and cooperative economic partnerships, ongoing reliance on transfers and subsidies and the persistence of a vulnerable rural economic, sociocultural and environmental framework [7]. The study aims to provide a thorough knowledge of the dynamics inside critical economic institutions by exploring linked determinants in the performance of VOEs in rural Indonesia [8].…”