The Influence Of Moderate And Large Industrial Growth On The Existence Of Micro Businesses In The City Of Medan

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The Influence of Moderate and Large Industrial Growth on the Existence of Micro Businesses in the City of Medan

Introduction

The city of Medan, located in the province of North Sumatra, Indonesia, has experienced significant industrial growth in recent years. This growth has been driven by various sectors, including the food industry, rubber and plastic goods industry, and non-engine metal industry and its equipment. As a result, the city has seen an increase in the number of micro businesses operating in the area. However, the impact of industrial growth on micro businesses has been a topic of debate among researchers and policymakers. This study aims to examine the influence of moderate and large industrial growth on the existence of micro businesses in Medan.

Background

Medan is a major industrial hub in Indonesia, with a diverse range of industries operating in the city. The food industry, in particular, has seen significant growth in recent years, with many large-scale food processing companies setting up operations in the city. The rubber and plastic goods industry has also experienced growth, with many small and medium-sized enterprises (SMEs) operating in the sector. The non-engine metal industry and its equipment has also seen growth, with many micro businesses operating in the sector.

The growth of these industries has created new business opportunities for micro businesses in Medan. Many micro businesses have been able to integrate into the supply chains of large industries, providing goods and services to these companies. This has helped to increase employment and income for micro business owners and their employees.

Methodology

This study used multiple regression analysis methods to examine the influence of moderate and large industrial growth on the existence of micro businesses in Medan. The data used in this study was time series data from 2003 to 2014, sourced from the Department of Cooperatives, Small and Medium Enterprises in Medan City, as well as the Central Statistics Agency of North Sumatra Province.

The dependent variable used in this study was the number of micro businesses operating in Medan, while the independent variables included the growth of the moderate and large industries mentioned earlier. The coefficient of determination (R²) was used to measure the strength of the relationship between the independent variables and the dependent variable.

Results

The results of this study showed that moderate and large industrial growth had a significant influence on the existence of micro businesses in Medan. The coefficient of determination (R²) was 0.880, indicating that moderate and large industrial growth could affect the existence of micro businesses by 88%. This suggests that the growth of these industries has had a significant impact on the number of micro businesses operating in Medan.

Discussion

The influence of industrial growth on micro businesses in Medan cannot be seen as trivial. The developing industrial sector, especially the food, rubber and metal industry, created new business opportunities, increasing employment, and moving the local economy. With the existence of large industries, micro businesses can often be integrated in supply chains, both as suppliers and as supporting service providers, which will strengthen their existence in the market.

In addition, large industrial growth can also have a positive multiplier effect on micro businesses. For example, when the food industry is developing, there will be more needs of raw materials from local micro businesses, which will certainly increase the income and existence of the micro business.

However, on the other hand, the existence of large industries can also trigger fierce competition. Micro businesses that are unable to compete with the products and services offered by large industries may face challenges in maintaining the continuity of their business. Therefore, it is important for the government and stakeholders to create policies that support the synergy between large industries and micro businesses, for example through training programs, access to financing, and marketing of local products.

Conclusion

The growth of moderate and large industries not only has a positive impact, but also requires micro businesses to adapt to changing market dynamics. Therefore, it is important for all parties to collaborate and create an ecosystem that supports the growth of micro business in a sustainable manner in facing challenges and opportunities in the growing industrial era.

Recommendations

Based on the findings of this study, the following recommendations are made:

  1. Government Support: The government should provide support to micro businesses in Medan, including training programs, access to financing, and marketing of local products.
  2. Industry-Micro Business Synergy: The government and stakeholders should create policies that support the synergy between large industries and micro businesses.
  3. Capacity Building: Micro businesses in Medan should be encouraged to build their capacity to compete with large industries, including through training and development programs.
  4. Market Research: Micro businesses in Medan should conduct market research to identify new business opportunities and to stay competitive in the market.

Limitations

This study has several limitations, including:

  1. Data Limitations: The data used in this study was time series data from 2003 to 2014, which may not reflect the current situation in Medan.
  2. Sample Size: The sample size of this study was limited to micro businesses in Medan, which may not be representative of micro businesses in other cities in Indonesia.
  3. Methodology: The methodology used in this study was multiple regression analysis, which may not be the most appropriate method for examining the influence of industrial growth on micro businesses.

Future Research Directions

Future research should focus on the following areas:

  1. Longitudinal Study: A longitudinal study should be conducted to examine the influence of industrial growth on micro businesses in Medan over a longer period of time.
  2. Case Study: A case study should be conducted to examine the experiences of micro businesses in Medan in integrating into the supply chains of large industries.
  3. Survey Study: A survey study should be conducted to examine the perceptions of micro business owners in Medan regarding the influence of industrial growth on their businesses.
    Frequently Asked Questions (FAQs) about the Influence of Moderate and Large Industrial Growth on the Existence of Micro Businesses in Medan

Q: What is the main objective of this study?

A: The main objective of this study is to examine the influence of moderate and large industrial growth on the existence of micro businesses in Medan.

Q: What are the independent variables used in this study?

A: The independent variables used in this study are the growth of the moderate and large industries, including the food industry, rubber and plastic goods industry, and non-engine metal industry and its equipment.

Q: What is the dependent variable used in this study?

A: The dependent variable used in this study is the number of micro businesses operating in Medan.

Q: What is the coefficient of determination (R²) used in this study?

A: The coefficient of determination (R²) is a statistical measure that indicates the strength of the relationship between the independent variables and the dependent variable. In this study, the R² value is 0.880, indicating that the growth of moderate and large industries can affect the existence of micro businesses by 88%.

Q: What are the implications of this study for policymakers and stakeholders?

A: The findings of this study suggest that policymakers and stakeholders should create policies that support the synergy between large industries and micro businesses, such as training programs, access to financing, and marketing of local products.

Q: What are the limitations of this study?

A: The limitations of this study include the use of time series data from 2003 to 2014, which may not reflect the current situation in Medan, and the limited sample size of micro businesses in Medan.

Q: What are the recommendations of this study for micro businesses in Medan?

A: The recommendations of this study for micro businesses in Medan include building their capacity to compete with large industries, conducting market research to identify new business opportunities, and integrating into the supply chains of large industries.

Q: What are the future research directions suggested by this study?

A: The future research directions suggested by this study include conducting a longitudinal study to examine the influence of industrial growth on micro businesses in Medan over a longer period of time, conducting a case study to examine the experiences of micro businesses in Medan in integrating into the supply chains of large industries, and conducting a survey study to examine the perceptions of micro business owners in Medan regarding the influence of industrial growth on their businesses.

Q: What are the implications of this study for the development of micro businesses in Medan?

A: The findings of this study suggest that the growth of moderate and large industries can have a positive impact on the development of micro businesses in Medan, but also requires micro businesses to adapt to changing market dynamics. Therefore, it is essential for policymakers and stakeholders to create an ecosystem that supports the growth of micro businesses in a sustainable manner.

Q: What are the implications of this study for the development of large industries in Medan?

A: The findings of this study suggest that large industries in Medan should create opportunities for micro businesses to integrate into their supply chains, and provide support to micro businesses to build their capacity and compete with large industries.

Q: What are the implications of this study for the development of the local economy in Medan?

A: The findings of this study suggest that the growth of moderate and large industries can have a positive impact on the development of the local economy in Medan, but also requires the creation of an ecosystem that supports the growth of micro businesses in a sustainable manner.