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13th UBAYA INTERNATIONAL ANNUAL SYMPOSIUM ON MANAGEMENT

BUSINESS DEVELOPMENT OF SMALL AND MEDIUM ENTERPRISES


(SMEs) CREATIVE INDUSTRY IN SUPPORTING REGIONAL
ECONOMIC IMPROVEMENT THROUGH GROSS REGIONAL
DOMESTIC PRODUCT (GRDP) REGION IN BANDUNG
Wien Dyahrini
Faculty of Business and Management, University of Widyatama
wien.dyahrini @ widyatama ac.id

Abstract
In this study the business development of small and medium businesses (SMBs) in the
creative industry products in support of regional economic improvement of the gross regional
domestic product (GRDP) in Bandung. Business creative industries in the city are mostly Small
and Medium Industries (SMI), the development of creative industry has become an important
issue in scrutinizing economic growth in Indonesia. In exploring the role played by SMEs and to
find out more sub-sectors of the creative industries have become a pillar of economic growth in
the creative industries in Bandung, here are some of the potential business areas that recently
began growing rapidly in the area of Bandung which has a significant contribution to the
formation West Java provincial economy with one of the SME sector and creative industries.
Micro, small and medium enterprises (SMEs) which significantly contribute to the gross
regional domestic product (GRDP) each year is quite significant, which on average is in the
range of above 7% per year. The contribution and role of SMEs in the region of Bandung from
the creative industries is significant in moving the economy in the area of Bandung in West Java
in particular and the region in general. With the value of gross regional domestic product
(GRDP), Bandung is the largest, reaching 10.64%, and subsequently followed by Regency
Bandung at 5.98%, followed by the West Bandung regency by 2, 27%, and last Cimahi by 1 ,
67%. Overall contribution of gross regional domestic product (GRDP) regional West Java
Bandung to the GRDP amounted to 20.56%, which is quite significant figure, reaching the
amount of one-fifth GRDP of West Java.
Keywords: creative economy, creative industry, SMEs and the GRDP
JEL Classification: M13, M48
I. Introduction
I.1. Background of Problems
In the normal course of business units in the city of Bandung creative industries constitute
the majority of Small and Medium Industries (SMI), the development of creative industry has
become an important issue in scrutinizing economic growth an Indonesia. Some fields are
enough to attract attention as like the creative industry in the culinary sector, services, fashion,
and creative products such as woven, embroidered and others. By looking at these facts, this
study aims to explore creative industries in the sector and its implications for the strengthening
of the local economy, it is also to provide input on the development of creative industries
generally in West Java and particularly in Bandung area.
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Making Bandung as a creative city in Indonesia is certainly not new thing for the people in
this country. The amount of natural resources that are stored and high creativity of the human
resources that are in the city, making Bandung as a barometer of the growth of creative industries
at the national level. Not surprisingly wide range of predicates are now emerging from the
community, ranging from the big city known as a center for the development of fashion, the
center of artistic creation and culture, hawker centers and cuisine, as well as Paris Van Java now
becomes one of the icons of travel destination in Bandung. Concerning of Bandung, closely
related to a wide choice of food or culinary, tourism, distribution, and other correlates with the
development of creative industries. Meanwhile, according to the Kompas daily at the time the
contribution of creative industry in Indonesia reached 7.6%, while 2014 is expected increasing
to 8.1% ( Kompas, 2011)
Taking into consideration the above circumstances that micro, small, and medium enterprises (SMEs) play a very important role in the growth of economic development for SMEs
which can absorb the most labor than large businesses. In Indonesia Micro, small and medium
enterprises (SMEs) are some of the largest contributor to the economy, in addition to the SMEs
in Indonesia are often associated with issues of economic and social problems in the country
such as high levels of poverty, the magnitude of unemployment, unequal distribution of income,
the development process unevenly distributed between urban and rural areas, as well as the
problems of urbanization. The development of SMEs is expected to provide a significant positive
contribution to mitigation efforts such problems. As the amount of information on the
development of micro, small and medium enterprises (SMEs) in Indonesia can be seen in table
1.1 below.

table 1.1
The progress of Micro, Small and Medium Enterprises (SMEs)
in Indonesia in 2010-2013
Year

Number of SMEs

2010
53.823.732
2011
55.206.444
2012
56.534.592
2013
57,895,721
Source: bps.go.id 2013 (data processing)
From table 1.1 we can be see that every year the number of SMEs increased. In 2010 the
number of SMEs in Indonesia amounted to 53,823,732 units of the business and in 2013 the
number in-creased to 57,895,721 SME business units. Here are some of the advantages
possessed by SMEs in Indonesia, namely:
1. Innovation in technology that have easily happened in product development.
2. Relationship human intimacy of the smaller companies.
3. Ability to create employment opportunities or quite a lot to labor absorption.
4. Flexibility and ability to adapt to changing market conditions faster than large-scale
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enterprises in general bureaucratic.


5. The presence of dynamism managerial and entrepreneurial role
Table 1.2
The progress of Micro, Small and Medium Enterprises (SMEs)
and Large Enterprises in West Java Year 2010-2013
Tahun

Usaha Mikro

Usaha Kecil

Usaha Menengah

2010
2011
2012
2013

8.616.254
8.626.671
9.042.519
9.218.276

106.592
116.062
115.749
116.036

7.408
8.181
8.235
8.417

Usaha
Besar
1.566
3.728
1.853
1.908

Source: Department of Cooperatives and SMEs in West Java


In exploring the role played by SMEs and to find out more sub-sectors of the creative
industries that have become a pillar of economic growth in the creative in Bandung, here are
some of the potential business areas that recently began growing rapidly in Bandung which has a
significant contribution to the formation economy of West Java province with one of the SME
sector and creative industries. It can be seen from the development of creative industries in
Bandung are shown in table 1.3 below.
Table 1.3
Growth of Micro, Small and Medium Enterprises (SMEs) in Bandung Year 2010-2013
Year
Number of SMEs
2010
1.510
2011
1.783
2012
1.889
2013
2,104
Source: Department of Cooperatives and SMEs Industry and trade in Bandung in 2013
(data processing)
Based on table 1.3 it can be seen that the number of SMEs in Bandung increases from year
to year. In 2010, the number of SMEs as many as 1,510 units and up to the year 2013 the
number of SMEs as many as 2,104 units. SMEs in Bandung experienced growth every years
since it is driven by economic growth in Bandung, which is quite good. According to Hidayat,
Chairman of the Chamber of Commerce of Bandung said "the growth of micro, small and
medium enterprises (SMEs) in the city of Bandung growth driven by the large uptake of the
product by the public, especially tourists ( Kadin 2013). Another advantage that can be gained is
from the centers of the city that can be used as a tourist destination for domestic and foreign
tourists, although not optimal because it is constrained by the lack of infrastructure that has not
been completed by the access road that is adequate, the lack of product promotion centers, lack
of help capital either in the form of material and equipment that support production and lack of
empowerment to these centers.

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1.2 Problem Formulation Research.


Based on the background of these problems, the researchers formulate the problems of the
business development of small and medium businesses (SMBs) in the creative industry products
in support lag of regional economic improvement of the gross domestic regional product
(GDRP) in Bandung.
1.3 Research Objectives.
The purpose of this study was to determine how the role of business development of small
and medium businesses (SMBs) in the creative industry products in supporting of regional
economic improvement of the gross domestic regional product (GDRP) in Bandung.
1.4 Benefits of Research.
In this study are expected to provide benefits including academically, the results of this
study will be able to add their knowledge and experience as well as to contribute ideas for the
development of science in business management and entrepreneurship. While the benefits of
practical use in order to help to contribute ideas for local government that local government
provincial and local government special town on the role of SMEs in contributing to the
economic improvement of the area role is in enhancing the gross domestic regional product
(GDRP) in Bandung, in particular and in West Java in general.

II. Literature Review


2.1 Definition of the Creative Economy in Indonesia
A lot of sense and kind of creative economy to be explained, also the difference of those
terms that exist in society. There are two terms on the creative industries, some apply the
creative industries and, some use the term creative economy. But the difference of that terms,
furthermore expected that the existence of the creative economy can get serious attention from
the government. Understanding the Creative Economy, here are some understandings of the
creative economy or the creative industries from several sources.
1. The concept of Creative Economy is an economic concept in the new economic era that
intensifies information and creativity by relying on the ideas and stock of knowledge from the
Human Resources (HR) as the main production factor in their economic activities.
2. The Ministry of Trade of Indonesia stated that the creative industry is an industry that is
derived from the utilization of creativity, skill and talent of individuals to create wealth and jobs
by generating and exploiting the creativity and inventiveness of the individual.
3. The Ministry of Trade of the Republic of Indonesia (2008) formulated the creative economy as
an effort to sustainable economic development through creativity and competitive economic
climate and it has reserves of renewable resources.

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2.2. Understanding Creative Industries


In contrast to the characteristics of the industry in general, Creative Industries is an industry
group which consists of various types of industries, each of it has relevance in the process of
exploitation of ideas or intellectual property (intellectual property) into a high economic value
that can create prosperity and jobs. Based on the results of the study, the UK classified the
creative industries into 13 sectors (Advertising; Architecture; Art & Antiques Markets; Craft;
Design; Fashion Designer; Film & Video; Interactive Leisure Software; Music; Performing Arts;
Publishing; Software & Computer Services; Television and Radio). Adopting the classification
and constituted by some measures, the Indonesian creative industry grouping into 14 industry
groups (subsector).
The creative industries are the main element of the creativity, expertise and talent that has
the potential to improve the well-being through offering intellectual creations. The creative
industry consists of providing creative products directly to customers and supporting the creative
value creation in other sectors that are not directly related to the customers. Creative product has
characteristics: a short life cycle, high risk, high margin, high diversity, high competition and
replicable. Creative industries in Indonesia according to the Commerce Department noted 14
coverage of the creative economy, namely: (1) Advertising Services; (2) Architecture; (3) The
Arts; (4) Craft; (5) Design; (6) Mode (fashion); (7) Film; (8) Music; (9) for the Performing Arts;
(10) Issuance; (11) Research and development; (12) Software; (13) TV and Radio; (14) Video
games.
Furthermore, according to Deputy Chairman of the Chamber of Commerce and Industry
(Kadin) Indonesia Banking and Finance Rosan Roeslani said /assessed , all business lines need to
be moved to shore up economic growth amid the global economic slowdown. Sectors of small
and medium enterprises (SMEs) and the creative industries which have got small portions should
be encouraged because it is more robust in the face of global market turmoil "(KADIN ,2015).
In this case, West Java is the center of the creative industries and national SMEs.
Bandung area, for example, has long been recognized as a center of design creativity, fashion,
architecture, film and video, radio, music, up to software technology. Bandung is known as a
trend setter in fashion for young people, in addition it has strengthened its position as the city
services that offers a variety of products from distribution, culinary, production house of soap
operas, and good art products.
2.3 Definition of Gross Regional Domestic Product (GDRP)
Gross Regional Domestic Product (GRDP), is frequently used and expressed as one
measure in view of the economic structure of a region. The economic structure is used to
demonstrate the role of economic sectors in an economy. The most dominant sector has a top
position in the structure and will be the hallmark of an economy. The economic structure is the
ratio between the GRDP of a sector of the economy in a year with a total GRDP of the same
years. Economic growth rate expressed as a percentage. Furthermore, the form of the formulation
is expressed as follows:

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G = rate of economic growth


GRDP = PDRB in a year
PDRB0 = GRDP in the previous year.
III. Objects and methods of research
3.1 Research Object.
This case study taken in Bandung territory including: Bandung, West Bandung Regency,
Bandung regency and Cimahi entirely, West Java region.
3.2. Research methods
The study used a survey method. Data collected by descriptive quantitative interviews, and
field observations. Secondary data were obtained from the Department of Cooperatives and
SMEs, the Government of West Java province, Industry and Trade. Kadin Bandung area as well
as the creative industries studied. The secondary data in the form of publications, documents, and
reports in the activities of each of institution .
IV. Discussion
Based on the previous description it can be seen the magnitude of the contribution of the
creative economy sector, including SMEs in the creative industries to the export value that can
be achieved by Indonesia of the creative industries sector within a period of three (3) years from
the year 2011 -2013 as to be stated in table 4.1.below.
Tabel 4.1
Export value of Indonesia's Creative Industry Year 2011-2013
No
1
2
3
4
5
6
7
8
9
10

Sektor Ekonomi Kreatif


Advertising
Architecture
The Goods Market and Art
Crafts
Design
Fashion
Film, Video and Photographic
interactive games
Music
Performing Arts

Tahun 2011
17.629,5
93.285,6
10.727,2
17.773.447,0
1.551.788,6
67.896.022,7
596.302,4
572.056,2
909.294,5
252.880,8

Tahun 2012
18.889,3
99.792,0
10.898,6
20.176.373,9
1.611,491,5
70.120.777,1
612.306,3
588.034,5
913.803,0
253.521,7

Tahun 2013
19.932,2
104.258,7
11.405,4
21.723.601,0
1.612.590,7
76.788.615,1
639.438,5
593.039,6
934.263,7
259.318,5

Publishing and Printing


1.707.399,6
Computer and Software
1.066.255,9
Services
13 Radio and Television
1.378.471,6
14 Research and Development
71.355,8
15 Culinary
11.293.246,7
Exports Creative Economy
105.190.164,0
Source: BPS, processed Research SWA

1.750.281,5
1.107.831,9

1.755.826,3
1.125.528,3

1.447.760,2
73.299,0
11.359.651,2
110.144.802,7

1.509.450,1
74.665,0
11.816.125,0
118.968.031,8

11
12

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Based on the above table it can be seen that the proportion of exports of creative economy
has increased from year to year, which in 2011 amounted to 105,190,164.0 trillion (100%) to
110,144,802.7 trillion (105.1%) in 2012, there were increase of 5.1%. While in the year 2013 up
to 118,968,031.8 trillion (113.2%) there were increase of 8.1% when compared to 2011.
Central Statistics Agency (BPS) in 2014 showed West Java province was ranked as the
second in the number and types of SMEs per village / villages with a total of 16 405 units. Food
and beverage industry occupied the first position with the number of 4,023, followed by the
processing industry of wood (3987), industrial matting (2266), industrial pottery / ceramics
(1828), as well as convection and nonwovens industry (1779). All types of creative industries
mentioned above are produced in West Java in general, included Bandung area particulary.
They are Bandung city , Bandung regency, Cimahi and West Bandung District that
produces the products mentioned above. Furthermore, to see the magnitude of the contribution of
SMEs to the GDRP in West Java can be declared in the following table.

Year

2010
2011
2012
2013

Table 4.2
Comparison Contributions SMEs to GDRP of West Java
Contribution to GRDP
Growth in GRDP
West Java
Total ( Rp/ trillion )
Percentage (%)
771,59
6,06
860,98
6,22
946,86
7,31
1.070,18
9,66

Source: BPS 2013 (processed data)


Looking at data in Table 4.2 SME / SMBs significantly contributes to the GDP in every
year with quite significant, which on average in the range of above 7% per year. The largest
contribution was obtained in 2013, reaching 9.66% when compared to previous years. When
expressed in terms of money reaching 1070.18 trillion. SME performance of West Java is able
to contributes to the LPE (Economic Growth Rate) of 8.04 percent in West Java and it
contributes to the GDP of Rp 345.187 trillion.
With the role of SMEs is very important, it is actually the SMEs , an economic sector that
not only provides small business activities on people, but also can act as alternative solutions to
social problems such as the explosion of the number of workers who continue to grow in
Indonesia. Key roles are what make the excuse that SMEs continue to be developed in
Indonesia, especially in West Java.

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Table 4.3
Total Business Unit, Small and Medium Industry In West Java
According to Four Regency / City Year 2010 - 2012
Regency/City/
Provincial

Business (unit) / Year

2010
2011
Kota Bandung
12,269
12,273
Kab. bandung
5,030
5,052
Kota Cimahi
1,211
1,236
K.Bandung Barat
9,763
9,801
Jawa Barat
198,478
199,537
Source: BAPPEDA West Java (2012) the data is processed.

2012
12,283
5,052
1,236
9,801
199,723

Based on Table 4.3 showed that Bandung city has the largest number of SMEs, and further
followed by the districts of Bandung, Cimahi and Bandung Barat districts that have large
contribution to the regional gross domestic product in West Java. SME performance West Java is
able to contribute to the LPE (Economic Growth Rate) of 8.04 percent its contribution to the
GRDP around Rp 345.187 trillion (diskumkm.jabarprov.go.id).

Tabel 4.4
Creative industries contribution to National
Gross Domestic Product (GDP)
Public Services
167.544.819.489
Creative industry
104.787.209.313
Transportation and Communications
124.399.000.000
Trade , Hotels and Restaurants
259.272.101.124
Building
112.762.200.000
Processing industry
479.928.098.413
Agriculture, Livestock , Forestry , and Fisheries 261.296.800.000
Electricity , Gas , and Water
12.263.600.000
Mining and excavation
168.729.900.000
Finance , Real Estate and Business Services
155.633.748.390
Source : BPS , data is processed

( 9,07%)
( 5,67%)
(6,74%)
(14,04%)
(6,11%)
(25,99%)
(14,15%)
(0,66%)
(9,14%)
(8,43%)

Furthermore, the amounted of donations of regional gross domestic product (GDP) value
for Bandung area that consist of 4 regencies/ cities in West Java, in 2010-2012 with the
calculation including oil & gas as and without oil &Gas can be expressed in the following table.

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Tabel 4.5
The value of GDP at Current Market Prices
By Regency / City in West Java Year 2010-2012
(Trillion rupiah)

No. By Regency / City

1
2
3
4

Bandung
Bandung Barat
Kota Bandung
Kota Cimahi
Jawa Barat
Source: BAPPEDA West
Java 2012) the data is
processed West Java 2012) the
data is processed.

Including Oil and


Gas

Without Oil and


Gas

2010 2011*)2012**) 2010 2011*)2012**)


46,09 51,29 57,07 45,59 50,74 56,48
17,54 19,35 21,72 17,54 19,35 21,72
82 95,61 111,12
82 95,61 111,12
12,85 14,16 15,54 12,85 14,16 15,54
771,59 860,98 946,86738,89 824,06 908,45

*) Figures Repairs
**) Preliminary figures
1) Has the oil and gas sector

Based on table 4.5 it can be stated that the value of GDP, Bandung is the largest, reaching
16.02%, and further followed by Bandung District 11.00%, followed by the West Bandung
regency by 10, 57%, and the last Cimahi city of 10.00%. Overall contribution to the GRDP
Bandung territory , West Java amounted to 21.06%. Which the numbers are significant, reaching
the amount of one-fifth of the GDP of West Java.
GDRP growth in supporting the economy in Bandung area can be expressed as a
percentage. Calculation of growth are as follows:

Note:
Sector GRDP sector GDP value it = i in year t
Total PDRBt = value of total GRDP in year t

a. Bandung district
r(t-1,t)=PDRBt PDRBt-1 x 100%
PDRBt-1
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= 51,29 46,09 x 100% = 11.01%


46,09
r(t-1,t)= 57,07 51,29 x 100%
51,29
= 10,98%
b. Average for districts of Bandung
11,01 % + 10,98 % = 11,00 %
2
Thus, the average of economic growth from the year 2010 - 2012 was 11.00%

c. For West Bandung regency


r(t-1,t)=PDRBt PDRBt-1 x 100%
PDRBt-1
= 19,35 17,54 x 100%
17,54
=10.11%
r(t-1,t)= 21,72 19,35 x 100%
21,72
= 11,02%
d. average for the district of West Bandung
10,11 % + 11,02 % = 10,57 %
2

Thus, the average economic growth from the year 2010 - 2012 is 10.57%.
e. Bandung city
r(t-1,t)=PDRBt PDRBt-1 x 100%
= 95,61 82,00 x 100% = 17.01%
82,00
r(t-1,t)= 111,12 95,61 x 100%
95,61
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= 16,02%
f. Average of Bandung city
17,01 % + 16,02 % = 16,52 %
2
The average of economic growth from 2010 - 2012 is 16.52%
g. District of Cimahi.
r(t-1,t)=PDRBt PDRBt-1 x 100%
= 14,16 12,85 x 100% = 10.01%
12,85
r(t-1,t)= 15,54 14,16 x 100%
14,16
= 9,99%
h. Average of District Cimahi
10,01 % + 9,99 % = 10,00 %
2
Thus, the average of economic growth from the year 2010 - 2012 is 10.00%
Based on the above calculation, it can be said the GDRP contribution to the GDRP in
Bandung, is quite significant in supporting economic growth in West Java. In addition, there are
several other reasons that underlie businesses or small industries continue to be developed in
West Java, Bandung Region in particular and Indonesia in general.
V. CONCLUSIONS AND SUGGESTIONS
Based on the results of the discussion that has been done before in previous chapter, it
can be concluded that present below, and suggestions are referred in this study as follows:

5.1. Conclusion
1.Small micro and medium enterprises (SMEs) which significantly contribute to the regional
gross domestic regional product (GDRP) each year is quite significant, which on average in the
range of above 7% per year. The largest contribution was obtained in 2013, reaching 9.66%
when compared to previous years. When expressed in monetary value reached 1070.18 trillion.

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2. The creative industries have been able to make a contribution to the Gross Domestic Regional
Product (GDRP) significantly with the average a significant contribution in each year during the
study period, that was 2010 -2013 period.
3. Contribution and the roles of SMEs in the region of Bandung from the creative industries are
significant in economy growth in Bandung area particulary in West Java.
4.The value of gross domestic regional product (GDRP), Bandung are the largest, reaching
10.64%, and subsequently followed by Bandung regency at 5.98%, followed by the West
Bandung regency by 2, 27%, and the last is Cimahi 1.67%.
5. Overall contribution of gross domestic regional product (GDRP) Bandung regional West
Java to the GDP amounted to 20.56%. Which the numbers are significant, reaching the amount
of one-fifth of the GDRP of West Java.
5.2. Suggestion
1. The creative industry is an integral part of the creative economy. Be aware that the creative
economy, which focuses on the creation of goods and services by relying on the expertise, talent
and creativity as intellectual property, is the hope for the Indonesian economy to rise, compete
and achieve excellence in the global economy, including West Java, especially in Bandung area.
2. Development of Indonesian creative economy is not only emphasizes on the development of
creative industries of 14 national groups, but also on the development of a variety of factors
significant role in the creative economy, such as human resources, raw materials based on
natural resources, technology, institutional arrangements and financial institutions which became
a component in the model of development that will be able to increase its contribution to the
improvement of the gross domestic regional product (GDRP) in Bandung, West Java
particularly and the economy of nation in general.

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ISBN: 978-602-73852-0-7

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13th UBAYA INTERNATIONAL ANNUAL SYMPOSIUM ON MANAGEMENT

Bank Indonesia 2013, Menjaga Stabilitas, Mendorong Reformasi Struktural Untuk


Pertumbuhan Yang Berkelanjutan.
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Biro Pusat Statistik (BPS) Propinsi Jawa Barat, tahun 2013
Merdeka .Com, Genjot Peran UMKM, Pemerintah Janji Pangkas Izin KUR, diunduh 16
Februari 2014.
Tempo.Co, Jakarta, Gerakan Oneintwenty Dorong Pelaku UMKM Naik Kelas, diunduh 16
Pebruari, 2014.
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Strategic Management Model, Strategic Analysis and Choice in Single or DominantProduct Business Building Sustainable Competitive Advantages.
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Business Policy, Tenth Edition, Prentice Hall, USA.

ISBN: 978-602-73852-0-7

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