SME COMPETITIVENESS CLUSTER ANALYSIS IN EAST JAVA

Muslih Muslih,Angga Erlando

doi:10.20473/jde.v4i2.13298

Muslih Muslih, Angga Erlando

Open Access

https://doi.org/10.20473/jde.v4i2.13298

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Abstract

This study aims to analyse the competitiveness of the small and medium industries in East Java in the face of global economic openness. The method used is a cluster to find out the factors that influence the competitiveness of Small and Medium Industries (SME) by grouping them into groups based on similarity of characters. The use of the cluster method is carried out hierarchically, or processed through a series of successively fusing objects into groups. Based on the results of identification and analysis, then the conclusion, there are three cluster findings based on competitiveness categories. Cluster I is SME with low competitiveness, Cluster II is SME with high competitiveness, and Cluster III is SME with medium competitiveness. SME that have high competitiveness are SME that can increase efficiency in 2 fields, namely Production and Marketing. While SME that have medium competitiveness are SME that are superior in technology, so they can be classified in the creative industry.Keywords: Competitiveness, Cluster, SME, East JawaJEL Classification: O0; O1; O2; L6

Highlights

The industrial sector is one of the main components of East Java’s economy
Becauses the method used is a cluster to find out the factors that influence the competitiveness of Small and Medium Enterprises(SME) by grouping them into groups based on similarity of characters
The conclusion based on the analysis, SMEs with high competitiveness are able to increaseefficiency in 2 fields, production and marketing

Summary

Introduction

The average contribution of the industrial sector reaches 29% of the total East Java RGDP in the period of 2012 to 2016. While other industrial sub-sectors whose contribution is not too large are tobacco processing and chemical sub-sectors. Industries in East Java classified into two, namely Large Industries (LIs), and Small and Medium Enterprises (SME). This division based on business scale factors, number of workers, investment value, and production technology. Both LIs and SME are both supportingthe economy of East Java. Both of them have different market shares. Both of them can work together, progress, be strong and have high competitiveness along with the openness of the local, regional and global economy (Disperindag Jatim, 2019)

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