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DOI https://doi.org/10.18551/rjoas.2020-11.22
THE INFLUENCE OF SOCIO-ECONOMIC DEVELOPMENT ON ENTREPRENEURIAL BEHAVIOR: A STUDY OF WOODEN BATIK CRAFTSMEN IN KREBET, PAJANGAN,
BANTUL, INDONESIA
Kussujaniatun Sri*, Hartati Anis Siti
Faculty of Economics, University of National Development Veteran Yogyakarta, Indonesia
*E-mail: sri.kussujaniatun@upnyk.ac.id
ABSTRACT
Krebet Tourism Village is a wooden batik industrial center which has tourism potential both in terms of culture and nature. The significance of this research is to find out the numerous potentials, particularly in development wooden batik potential, and therefore, it is necessary to conduct a research on entrepreneurial behavior of the craftsmen. The research problem is related to the factors influencing the craftsmen's entrepreneurial behavior. This research aims at analyzing the influence of socio-economic development on entrepreneurial behavior. This is a descriptive-analytical research using primary data to explain the phenomena of the entrepreneurial behavior. The technique used is Path analysis. The research results show that there is a direct influence of social development on entrepreneurial behavior, a direct influence of economic development on entrepreneurial behavior, and direct influence of socio-economic development on entrepreneurial behavior and indirect influence of economic development on entrepreneurial behavior through social development, in which the role of social development as mediator variable did not work properly. The implementation of this research result is that there is a need to synergize among the wooden batik craftsmen as the business agents, Local Government of Bantul Regency as facilitator, and society's empathy in strengthening craftsmen's entrepreneurial behavior.
KEY WORDS
Social development, economic development, entrepreneurial behavior.
Increasing the community's economy is one of the policies of the Bantul Government to alleviate poverty in order to achieve the vision of Bantul Regency development, for that the community is required to be more developed and more creative in developing skills and utilizing existing potential. One of the efforts that are being promoted by the Bantul Regency government is with the development of a tourist village.
The goal to be achieved in Development Program is to create individuals andcommunity that are independent in their thinking and act, and that they can control what they do. Krebet Tourism Village is a wooden batik industrial center which has tourism potential both in terms of culture and nature. According to the interview conducted by the research team during the pre-survey with Mr. Agus Jati Kumara, one of the managers of Krebet Tourism Village, the sales / income data for Krebet Tourism Village in 2018 was IDR 750,000,000.00 and in 2019 IDR 835,000,000. 00. There are 57 wooden batik workshops, 75 batik tutors, 35 homestays, and 25 tour guides. Not only offers wooden batik, but Krebet Tourism Village also offers tourists batik activities, traditional art performances, village exploration, traditional games, tree planting, culinary delights, and homestays. Sales of wooden batik are more on orders from inside and outside the city, there are also tourists who come directly but the ratio is only 30 percent. The existence of cultural and artistic tourism accompanied by its natural potential, Krebet Tourism Village certainly has its own charm for tourists. Furthermore, the topic of the research is discussed since it is expected that after the community of Krebet, Bantul knows and realizes the potentials, they need particular comprehension about entrepreneurial behavior, especially dealing with teak roots potentials. The interest of this research is to find out the influence of social development aspect and economic development aspect on the entrepreneurial behavior. It is expected that with the understanding about entrepreneurial behavior, it can improve the economy and the welfare
of the community because Krebet is one of the tourist villages that has great potential in developing which can later become a pilot tourism village.
LITERATURE REVIEW
The definition of social in social department refers to the activities intended to solve problems faced by a community in terms of welfare including occupation and social welfare (KBBI 1996). Dawyer (1987) in Kusumawati (2010) suggests that the emergence of innovative products are basically to fulfill the demand of the market so that the innovative products are the one that can be used as competitive superiority for the company. Innovative products are believed to be able to improve the sales and profits (Musyafak and Ibrahim, 2017).When incorporated into production activities, product, process and organizational innovations operate as the key engine of economic growth and increased productivity leading to comparative advantages of nations, regions, cities and, obviously, firms. This innovation-growth link has been modelled using increasing unlimited growth (Giovannetti & Piga, 2017) returns production functions leading to potentially.
Risk is strongly related to the condition of uncertainty. The uncertainty can be reflected from the high movement fluctuation. The higher fluctuation is, the higher the uncertainty level will be (Hanafi, 2009). Complexity of innovative project and competitive business environment make risk assessment of innovation a difficult task (Deptula, 2017). Most of the causes of the bankruptcy start from the financial difficulty. Financial difficulty can be interpreted as the inability of the company to pay the financial duties on the due dates that causes the bankruptcy of the company (Sihombing, 2008).
Competence is the ability to do a job based on certain skills and knowledge and supported by the work attitude kerja demanded in that job as the principles of the job field (Wibowo, 2012). There are two factors of ability, which are: (1) Physical ability, which is the fit condition, power, and biological characteristics, (2) Intellectual ability (Kurniadi A. 2013). Competence can be seen from the ability in designing products. By conducting product design development, it is expected that it can give identity and differentiation to the competitors' products (Kussujaniatun, et al. 2016). Competence can also be seen from the ability in developing the cooperation relationship with the business partners. Moh. Jafar Hafsah suggests that this cooperation, often called as partnership, means that it is a business strategy done by two parties or more in certain period of time to reach profits with the principles of needing one and another and developing each other.
In this research, economic development can be seen from the dimensions of market, business network, and fund source.
The basic principle of marketing process according to Kotler (2006) is mainly on how we can understand the wants and the needs of the consumers. Market orientation in this research is seen from the distribution channel factor, export through distributors, and the number of the buyers. Kotler (2000) states that the distribution channel of goods is the entire activities or functions to transfer products along with the ownership right from the producer to the end-consumer or industry users. Distribution shows the numerous activities some by a company to make the products or service available for the market target (Sukotjo and Radix, 2010). Distribution occurs among the steps in supply chain. The needed raw material flow transfers from the supplier to a producer and the company will transfer the final product to the consumers. The right distribution channel can be used to achieve numerous goals from the supply chain, starting from the low budget up to the high responses to the demand from the consumers (Chopra and Peter, 2010).
Export is all goods and services that are sold to other countries added by the services held in that country related to transportation, budgeting, and many other supporting aspects (Lestari, 2009). Actually, the chances to expand the UKM-Small Medium Enterprises that will go into export market still have the prospect and big potentials in the future, including farming products, crops, fishery, textile and attire, furniture, processing industry products, and crafts that all of them are simple-tech products (Rafinaldy, 2004).Consumers that become the target and have buying power must be determined first. According to Deswindi (2007) the
consumers' behavior is related to a decision-making process before the buying and an action in obtaining, using, consuming, and consuming the products. Understanding the consumers' behavior includes the behavior that is observable in shopping, such as how many, when, with whom, by whom, and how the products bought are consumed.
Business network can be seen from the ability to cooperate with other parties. Cooperation is a joint effort between two partners to reach the same goal and to get better result and faster result. Therefore, it needs cooperation in running life (Surminah, 2013).According to Kismantoroadji, et.al. (2016), small industries must conduct coordination with the network, for the continuity of the production and effective technology development to smoothen the products manually and semi-mechanically as well as for the improvement of the skills and capital strengthening. Besides escalating the network to open the market access by expanding the marketing channels, promotion, opening outlets and product innovation, the cooperation is also formed in groups or sub-contracts. Changes in the enterprises' approach to cooperation can be observed over the last few years - the scope and types of cooperation forms are becoming more numerous, and one of the key success factors is economic effects resulting from integration of companies (Tomaszuk, 2017).
The sources of funding in this research can be seen from banking (foreign capital) and own capital. Banking serves as the source from external party. One of the credit services given by the bank to its customers is working capital loan. According to Dendawijaya (2001), the definition of working capital loan is a credit given by a bank to the customer (debtor) to fulfill the working capital need of the debtor. The principle of this working capital is the use of the capital that will be over in one business cycle, which starts from the cash gain from the bank credit and then used to buy goods or raw materials, which are processed into final products and then sold in cash or in credit to get the cash back. In running the operational activities, the company needs enough funds to make sure that the operation will last. In this research, the sources of the funding from the banking can be seen from the ease in obtaining the fund, the amount of the loan, and the interest rate. Own capital, according to Mardiyatmo (2008) is the capital gained from the owner of the company itself. The capital consists of savings, donation, grants, families, and so on. The importance of making business plans and making calculation of profit and loss is to keep the own capital in the right amount, not too much and not too little.
Mc Clelland in Suryana, (2003) suggests the concept of entrepreneurial behavior as moderate risk taker, with knowledge of the results from the taken decisions, and knowing what will happen, motivated, and having organizational skills. Entrepreneurial behavior is generally proactive, achievement-oriented, and committed to others. Zimmerer and Scarborough citedby Benecdicta Prihatin, in Suryana (2003).
Only those who have entrepreneurial behavior will have credibility, creativity, and courage to benefit from the existing opportunities (A.B Susanto, 2009). Whether the business is successful or not, it really depends on the entrepreneurial behavior and managerial ability of the business agents. Priyanto (2009) suggests that a person with high entrepreneurial behavior combined with sufficient managerial ability will lead him/her to be successful in his/her business.The initial stage in conducting a business is to make a business plan. Business plan is plan to see the future, to allocate the resources, to focus on the key point and to prepare oneself to opportunities and problems (Berry, 2004). Business plans consist of: a) executive summary, b) mission statement, c) business background, d) detailed business illustration, e) market analysis, f) competitor analysis, g) business strategy plan, h) organization and management specification, and i) strategy and action planning.
Meanwhile, financial planning consists of a) the amount of working capital needed, b) cash expenditure for bank and investor, c) operational budget projection, d) financial report projection (balance and profit-loss report), and e) breakeven point analysis (Kussujaniatun, et.al , 2016). In conducting a business, we need to do calculation of the business financing. By making financial report, we can conduct evaluation and planning for the business in the following year, such as: 1) determining the net profit for next year based on the information of the net profit and net profit margin, 2) liquidity ratio, which is the ratio that shows whether our business can complete the duties in short time, in the deadline, 3) net sales ratio, which is
the ratio that shows the ability of the company to produce sales related to the assets it has, and 4) net profit ratio on capital, this ratio shows the profit remaining level from each capital in the company (Kussujaniatun, et.al , 2016).
According to Taylor (in Wahyuni, 2014), self-confidence is somebody's faith of the ability that he or she has to show certain behavior or to reach certain target. Santrock (2003) defines confidence as an entirely evaluative dimension in oneself. Confidence is also called as pride or image. Confidence brings power in making steps of an individual. Lopez and Snyder (2003) argue that optimism is a hope in an individual that something will lead to goodness. The feeling of optimism leads an individual to go to the goal they want, which is to believe in themselves and their own ability.
Entrepreneurial ability in conducting supervision that is oriented in tasks and results can be seen from the ability in finishing job from the order needs Sukanto (2003). Supply policy can determine the numbers of the economical orders that are related to the determination of how many orders are taken and the point of the orders related to when orders are taken.
The method employed in this research is descriptive analytical method using survey. The descriptive analysis is expected to be able to explain the phenomena of the entrepreneurial behavior that describes the social and economic aspects of the community. The type of data used in this research is primary data using questionnaires consisting of 17 items of questions. The sampel of the research is the wooden batik craftsmen that participate actively and are listed as members in Sanggar Punokawan organization. In order to generalize the research result for the whole population, then the samples must be representative (Sugiono, 2012). According to Cohen, et.al, (2007) the bigger samples the researcher take from the population, the better result will be. However, the minimum sample that must be taken is 30 samples. As stated by Baley in Mahmud (2011), research using statistical data should employ at least 30 samples. The research sample was a wooden batik craftsman who actively participated in the number of 57 people, and were on Krebet Pajangan Village, Bantul.
The operational definition of the dependent variable is Business Agent (Y), and in this research, it is measured by three indicators, which are: (a) managerial ability, (b) confidence, (c) task and result-oriented. The independent variables is Economic Development (X) that is measured by three indicators, which are (a) market, (b) business network, (c) sources of funding. The mediator variable is Social Development (Z) that is measured by three indicators, which are: (a) innovation, (b) risk-taking, (c) competence. The technique used for the analysis in this research is Path analysis. Path analysis is able to determine the relationship pattern among three variables or more but it cannot be used to confirm or to reject the imaginary casualty hypothesis'. The research variables are proven to have direct relationship if one variable influences another variable without the existence of the third variable that mediates the relationship, while the indirect relationship is proven if the third variable mediates the two other variables (Ghozali, 2012). The use of path analysis is to find out the direct or indirect influence. Direct influence is to identify the direct influence of the independent variable on the dependent variable. On the other hand, indirect influence is to identify the influence of independent variable on dependent variable through another variable (Juanim, 2004). In this research the path analysis is used to find out: direct influence of variable X on variable Y, direct influence of variable Z on variable Y, direct influence of variable X on variable Z, indirect influence of variable X on variable Y through variable Z.
The structural equation of the path diagram in this research is:
METHODS OF RESEARCH
Y = P0+P1X Z = P0+P2X
Y = P0 +P1 X + P3 Z
Y = Entrepreneurial behavior Z = Social development X = Economic development
Indirect influence (through Z) = P2 x P3 (Ghozali, 2012).
RESULTS AND DISSCUSION
The result obtained in this research is an understanding about the Entrepreneurial Behavior of the wooden batik craftsmen in Krebet, Pajangan, Bantul. The understanding is obtained using questionnaires, interviews, and observations. The questionnaire consists of 17 items of questions. Below is the result of descriptive statistic test:
Table 1 - Descriptive Test of Path Analysis 1
Coefficients3
Unstandardized Standardized 95% Confidence
Coefficients Coefficients Interval for B Correlations
Lower Upper Zero-
Model B Std. Error Beta t Sig. Bound Bound order Partial Part
1 (Constant) 33.599 2.9942 11.611 .000 -6.746 3.603
Social Development .115 .043 .251 -2.691 .0.09 .951 1.133 .836 .959 .629
Economic Development 1.082 .157 .686 6.886 .000 1.649 2.042 .755 .940 .515
a. Dependent Variable: Entrepreneurial Behavior.
Table 2 - Descriptive Test of Path Analysis 2
Coefficients3
Model Unstandardized Coefficients Standardized Coefficients t Sig. Correlations
B Std. Error Beta Zero-order Partial Part
1 (Constant) Social Development 2.297 .0169 2.485 .063 .0365 8.042 2.328 .000 .024 .0365 .0365 .0365
a. Dependent Variable: Economic Development.
Table 3 - Descriptive Test of Path Analysis 3
Residuals Statisticsa
Minimum Maximum Mean Std. Deviation N
Predicted Value 3.62292 12.02603 0.54908 0.56026 57
Residual 0.4333 0.49498 .000000 6.752472 57
Std. Predicted Value .11431 0.11499 .000 1.000 57
Std. Residual 0.1474 0.23191 .000 .990 57
a. Dependent Variable: Social Development.
Based on the hypothesis testing result that is tested using error rate Alpha 0,05, it shows that social development has direct influence on entrepreneurial behavior. It can be seen in Table 1 that shows the path coefficient value of the social development of 0,0365 meaning that if the social development is high, then it will strengthen the entrepreneurial behavior. This is supported by the descriptive result of the variables showing that social development is characterized by the product innovation, courage in taking risks to face the failure, and the competence, which is the ability of the craftsmen in designing the products and the ability to develop their business network. It means that the great resource of the craftsmen can give positive impacts in the social development, and eventually, the economic
development can increase. Furthermore, economic development has direct influence on the entrepreneurial behavior. It can be seen from the path coefficient value in the economic development of 0,686 meaning that if the economic development is high, it will strengthen the entrepreneurial behavior. This is supported by the descriptive result of the variable showing that economic development is characterized by the product distribution channels, exports done by the craftsmen, the number of the buyers, network/cooperation with the local and private government in guidance and training, and the ease in obtaining loans and interest rate from the banking. This means that the economic development of the craftsmen will lead to the better entrepreneurial behavior. Meanwhile, economic development has indirect influence of 0,00916 on the entrepreneurial behavior that is mediated by the social development of the craftsmen. This indicates that the variable of social development cannot function as mediator variable in influencing entrepreneurial behavior.
Krebet Tourism Village is a wooden batik industrial center which has tourism potential both in terms of culture and nature. After identifying the great potential of wooden batik handicrafts, the local government seeks to make optimal use of this potential to become a handicraft industry commodity that can add economic value and create jobs for the community. Krebet Tourism Village has produced various kinds of handicrafts from wood and bamboo, from souvenirs to products that can be used as well as many other various kinds of products. The sales / income data for Krebet Tourism Village in 2018 was IDR 750,000,000.00 and in 2019 IDR 835,000,000. 00. There are 57 wooden batik workshops, 75 batik tutors, 35 homestays, and 25 tour guides. Not only offers wooden batik, but Krebet Tourism Village also offers tourists batik activities, traditional art performances, village exploration, traditional games, tree planting, culinary delights, and homestays. But, in 2020 Because during the Covid-19 pandemic many stopped producing, they were not ready to compete in product innovation and manage digital marketing. Based on this, the implementation of the results of this study is that it is necessary to empower the community through training and mentoring of wooden batik craftsmen, especially training to improve the quality of human resources both in terms of product design and product innovation, and training in financial aspects and digital marketing in order to improve.
Indirect influence (through Z) = P2XP3
Interpretation:
• Direct influence from X to Y = 0,686 (P1)
• Direct influence from Z to Y = 0,251 (P3)
• Direct influence from X to Z = 0,0365 (P2)
• Indirect influence (through Z) = 0,251 x 0,0365= 0,00916, where 0,00916< 0,686
• Total influence = 0,686 + 0,00916 = 0,69516
DISCUSSION OF RESULTS
Y= P0+P1X
Z=Po+P2Z
Y=Po+P1X+PsZ
X= Economic Development Z= Social Development Y= Entrepreneurial Behavior
Figure 1 - Path Analysis Diagram
Based on the descriptive result of the research variables, it shows that the entrepreneurial behavior of the craftsmen is measured by the improvement seen from: (a) managerial ability aspect seen from the ability of the craftsmen in making business plans in one year and the ability of the craftsmen in making the calculation of the profit/loss, (b) high confidence aspect seen from the optimism of the products to be sold in certain time, and the confidence of the craftsmen of their abilities and skills in making the products.
The Influence of Social Development on Entrepreneurial Behavior. Based on the research result, it shows that the variable of social development has positive influence on entrepreneurial behavior. It can be seen in Table 1 that shows the path coefficient value of 0,251, thus it means that the high the social development will strengthen the entrepreneurial behavior. This is supported by the descriptive result of the variable that shows that the social development is characterized by the product innovation, the courage of the craftsmen in taking risks and brace to face failure, and the competence that is seen from the craftsmen's ability in making product designs and the ability of the craftsmen in developing the business cooperation network to fulfill the demand of the market. It indicates that the better social development they make, the stronger entrepreneurial behavior they have.
The Influence of Economic Development on Entrepreneurial Behavior. Based on the research result, economic development has direct influence on the entrepreneurial behavior. It can be seen from Table 1 that the path coefficient value in the economic development is 0,686 meaning that if the economic development is increased, it will strengthen the entrepreneurial behavior. This is supported by the descriptive result of the variable showing the existence of first, market development aspect, is characterized by (a) product distribution channels, (b) product development, (c) number of the buyers, second, the aspect of network/cooperation with the local and private is signified by the good cooperation with the government in guidance and training, and third, fund resource aspect is signified by (a) the ease in obtaining fund, (b) the amount of the loans, (c) the amount of the interest rate from the banking, and personal fund resource. This indicates that the ability of the craftsmen in improving their economic aspect will lead to the better entrepreneurial behavior.
Direct Influence of Economic Development on Social Development. Based on the research result, economic development has direct influence on the social development. It can be seen from Table 2 that the path coefficient value is 0,0365 meaning that if the economic development is increased, it will strengthen the social development. This is supported by the descriptive result of the variable showing the existence of first, market development aspect, characterized by (a) product distribution channels, (b) product development, (c) number of the buyers, second, network/cooperation with the local and private signified by the good cooperation with the government in guidance and training, and third, fund resource aspect signified by (a) the ease in obtaining fund, (b) the amount of the loans, (c) the amount of the interest rate from the banking, and personal fund resource.This indicates that the ability of the craftsmen in improving their economic aspect will lead to the better social development.
Indirect Influence of Economic Development on Entrepreneurial Behavior Through Social Development. Based on the research result shown in Figure 1, it can be seen that the variable of economic development has indirect influence on the entrepreneurial behavior through the variable of social development with the value of 0,00916, which is smaller than P1=0,686, meaning that the role of the social development variable as mediator variable does not necessarily work. This indicates that the craftsmen's entrepreneurial behavior cannot be indirectly influenced by the economic development through social development.
CONCLUSION
The significance to discuss this topic in a research is that it is expected that the people of Krebet Tourism Village will understand and realize the potentials in their region, especially the tourism potential both in terms of culture and nature. Therefore, there is a need to study further about the aspects in the social and economic development in influencing the entrepreneurial behavior of the craftsmen. Based on the result of the analysis, it shows that
there are, first, a direct influence of the social development on the entrepreneurial behavior, second, a direct influence of the economic development on entrepreneurial behavior, third, there a direct influence of the economic development on the social development, and fourth, there is an indirect influence of the economic development on the entrepreneurial behavior through the mediator variable, which is social development. In this case, the role of social development as mediator variable does not function well. Economic development has the biggest direct influence on the entrepreneurial behavior. It is expected that the people in Krebet Tourism Village make use of the aspects of social and economic development as the ways in improving the entrepreneurial behavior. The potentials of a region must be well managed, so that it will be well-known by the society and that they will get profit, along with the improvement of the entrepreneurial behavior of the craftsmen, empower the community through training and mentoring of wooden batik craftsmen, especially training to improve the quality of human resources both in terms of product design and product innovation, and training in financial aspects and digital marketing in order to improve. The implementation of the research result is that it is expected that there will be a synergy among the wooden batik craftsmen as the business agents, Local Government of Bantul Regency as the facilitator, and the empathy of the community in terms of strengthening the entrepreneurial behavior of the craftsmen so that the society welfare can improve.
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