The Influence of Social Capital, Business Capital and Innovation on the Income of Traditional Cloth Craftsmen in Indonesia

Abstract

The development of the tourism sector has a positive impact on the craft industry. Bali Province and the Special Region of Yogyakarta are two regions that are very well-known in the tourism sector that produce many types of crafts, one of which is in the textile sector. Both provinces have very specific economic characteristics when compared to other provinces in Indonesia. The increase in the tourism sector has been proven to have a positive impact on reducing poverty rates, unemployment, and also inequality in the Special Region of Yogyakarta Province and in the Province of Bali. Bali Province is famous for its woven fabric craft industry and the Special Region of Yogyakarta Province is famous for its batik cloth craft industry. Both traditional fabrics are currently still sought after by both domestic and foreign tourists, because of the beauty of the motifs that are full of meaning, but the sales figures for both fabrics are still very low. This study aims to (1) determine the effect of business capital on the income of traditional fabric craftsmen. (2) To determine the effect of social capital on the income of traditional fabric craftsmen (3) To determine the effect of innovation as a moderating variable on the relationship between business capital and the income of traditional fabric craftsmen. (4) To determine the effect of innovation as a moderating variable on the relationship between social capital and the income of traditional fabric craftsmen. The population in this study were all batik/woven fabric craftsmen in Tenganan Pengringsingan Tourism Village and Giriloyo Tourism Village. The sample used accidental sampling with questionnaires distributed to 65 respondents. The results of this study social capital and Innovation affect the income of craftsmen, while business capital does not affect the income of craftsmen. Innovation does not moderate the relationship between social capital and business capital on the income of craftsmen. The implication of this study is that craftsmen must create innovations according to local customs, culture and norms so as not to eliminate the meaning of the cloth. The limitation of this study is that the sample is only spread across several points.