Sustainability of Selected Agricultural and Industrial Clusters in Central Java

Sustainability of Selected Agricultural and Industrial Clusters in Central Java

Wiwandari Handayani, Nur Ratna Mukti, Herlina Nia

LABORATORY OF REGIONAL DEVELOPMENT AND ENVIRONMENTAL MANAGEMENT

DEPARTMENT OF URBAN AND REGIONAL PLANNINGFACULTY OF ENGINEERING – DIPONEGORO UNIVERSITY

Contents

• Background• Study Area• Method• Results and Discussion• Conclusion




Background

• Central Java contributes a significant employment in the non-primary sectors, BUT the contribution to non-primary GDP is relatively low • It indicates low productivity • Significant contribution of small-medium scale enterprises

• Formed as Local Economic Development based on clustering approach




Background




Jakarta West Java Central Java DI Yogyakarta East Java Banten0

5

10

15

20

25

Share of population Share of GDP - non primary Share of employment - non primary

Province in Java Island

(%)




This papers aims to further analyze the sustainability of selected rural based agricultural and industrial clusters in Central Java focusing on the examination of the capability of the employment/local people mainly to create competitive and innovative products.

Study area




Study area




Clusters LocationType of sector

Level of Stratified Cluster

1. Red Guava Kendal Agriculture -2. Coffee Temanggung Agriculture Intermediate 3. Palm Sugar Banyumas Agriculture Intermediate 4. Organic Farming Sukoharjo Agriculture Beginner 5. Tourism Kudus Industrial Intermediate 6. Salted Egg Brebes Industrial Beginner 7. Water Hyacinth Semarang Industrial Beginner

Method




• Delphi method was used to determine priority of indicators• Weighting analysis is used by giving weight in each indicator (using expert choice software)• Scoring to calculate the cluster sustainability

Method: list of variables and indicators



Variables Indicators

Human Resources

Education level of cluster members,

Capacity development for workers,

Number of workers,

Type of workers,

Cluster members participation in the cluster activities,

Reason for joining cluster,

Commitment of cluster members,

Benefits to be the cluster members,

Willingness to bequeath the business,

Cooperation between all cluster members to face the market competition.

Product Competitiveness

Complexity for gaining the raw materials,

Technology to support the business,

Brand ownership,

Innovation of the product packaging,

Promotion of the product,

Income,

Cooperation with the company or big company,

Support from the government and other institutions,

Market range of products,

Existence of market competitors,

Estimation of business in the future.

Weighted variables and indicators



Variables and Indicators Weight

Human ResourcesThe commitment of cluster members

0.296

Cooperation between all cluster members to face the market competition

0.215

Benefits to be the cluster members 0.153Capacity development for workers 0.109Activeness of cluster members 0.076Reason for joining cluster 0.053Willingness to bequeath the business

0.037

Education level of the cluster members

0.027

Type of workers 0.019Number of workers 0.015

Total 1.000

Variables and Indicators Weight

Product CompetitivenessPromotion of the products 0.296Innovation of the product packaging

0.215

The existence of market competitors

0.153

The complexity for gaining the raw material

0.109

The technology to support the business

0.076

The market range of product 0.053The brand ownership 0.037The amount of income 0.027The Business Approximation 0.019Government and Institution Support 0.015

Total 1.000

Method: scoring for calculating the sustainability




Category ScoreNot sustainable 1.0 - 2.0Sustainable 2.1 - 3.0

The result of weighting analysis becomes basis for calculating cluster sustainability. In total, 167 questionnaires were distributed to cluster members.

Results




Variables Indicators1 Palm SugarSalted Egg

Water Hyacinth

CoffeeOrganic

FarmingRed

GuavaTourism Min2 Max3 Mean4

Human Resources

a 0.877 0.875 0.876 0.829 0.888 0.849 0.888 0.829 0.888 0.869

b 0.364 0.271 0.297 0.376 0.376 0.334 0.362 0.271 0.378 0.340

c 0.441 0.386 0.446 0.447 0.459 0.459 0.453 0.386 0.459 0.442

d 0.205 0.224 0.234 0.270 0.267 0.218 0.233 0.205 0.270 0.236e 0.167 0.172 0.222 0.216 0.211 0.208 0.218 0.167 0.222 0.202

f 0.155 0.143 0.159 0.151 0.154 0.159 0.159 0.143 0.159 0.154g 0.101 0.093 0.093 0.081 0.077 0.09 0.099 0.077 0.101 0.091

h 0.041 0.048 0.054 0.049 0.059 0.052 0.063 0.041 0.063 0.052

i 0.037 0.036 0.026 0.022 0.024 0.029 0.032 0.022 0.037 0.029

j 0.016 0.015 0.021 0.02 0.022 0.017 0.023 0.015 0.023 0.019

Total 2.402 2.262 2.427 2.462 2.537 2.415 2.529

Product Competitiv

eness

k 0.659 0.700 0.677 0.700 0.682 0.709 0.707 0.659 0.709 0.691

l 0.445 0.438 0.340 0.507 0.450 0.533 0.502 0.340 0.533 0.459

m 0.300 0.194 0.264 0.283 0.424 0.352 0.322 0.194 0.424 0.306

n 0.327 0.264 0.322 0.310 0.327 0.322 0.303 0.264 0.327 0.311

o 0.079 0.076 0.082 0.137 0.155 0.099 0.076 0.076 0.155 0.101

p 0.078 0.066 0.068 0.073 0.078 0.066 0.084 0.066 0.084 0.073

q 0.081 0.095 0.062 0.074 0.074 0.060 0.080 0.060 0.095 0.075

r 0.054 0.079 0.054 0.055 0.058 0.049 0.069 0.049 0.079 0.060

s 0.056 0.056 0.054 0.055 0.057 0.055 0.055 0.054 0.057 0.055

t 0.025 0.027 0.033 0.030 0.035 0.031 0.025 0.025 0.035 0.029

Total 2.104 1.995 1.957 2.225 2.339 2.276 2.232

Results




ClusterHuman

Resources Score

Sustainability Based on Human

Resources

Product Competitivenes

s Score

Sustainability Based on Product

Competitiveness

Organic farming in Sukoharjo 2,537 Sustainable 2,339 Sustainable

Tourism in Kudus 2,529 Sustainable 2,232 Sustainable

Coffee in Temanggung 2,462 Sustainable 2,225 Sustainable

Water Hyacinth in Semarang 2,427 Sustainable 1,957 Not Sustainable

Red Guava in Kendal 2,415 Sustainable 2.276 Sustainable

Palm Sugar in Banyumas 2,402 Sustainable 2,104 Sustainable

Salted Egg in Brebes 2,262 Sustainable 1,995 Not Sustainable

Results




• Commitment of cluster member is a very important factor to ensure cluster sustainability• Lack of innovation for market based production

Cluster with better capability of the local people to cooperate and to collaborate with each other has been leading to better innovation

Conclusion




Competitiveness of the cluster product should be improved with support of sustain and intensive capacity building program to in the end increasing cluster productivity

The cluster sustainability is there but, mainly with the status quo scenario, significant improvement will only take place gradually.

endogenous resources(local knowledge, innovation, and entrepreneurial spirit)




Thank You

Documents

Sustainability of Selected Agricultural and Industrial Clusters in Central Java