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.
Highlights
Batik is a traditional hand-crafted dyeresist textile rich in intangible cultural values, passed down for generations
The role of entrepreneurs in product innovation, marketing innovation and business alliances has a positive influence on the Batik Small and Medium Enterprises (SMEs) revenue efficiency
The role of entrepreneurs in marketing innovation has the highest elasticity to the production and sales of batik SMEs followed by the role of entrepreneur in business alliance and product innovation
Summary
Batik is a traditional hand-crafted dyeresist textile rich in intangible cultural values, passed down for generations. Batik industry has contributed to the growing the national economy with an export value of 761 million USD in 2011. Besides that, amounted to 99.39 of 326 business units engaged in the batik industry is the Micro, Small and Medium Enterprises (SMEs), with absorption batik industry worker about 838 million people that are spread in various regions in Indonesia. It means that there is a large contribution from the batik industry to job opportunities and income improvement. The additional value of the batik industry is increasing every year with the average growth of 32.27% (Deperindag, 2013)
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