Provision of funds and capital or credit with relatively low interest rates

Oct 13, 2025 by talynt.org 142 views

Analysis of Small Industry Development to Increasing Community Income

Exploring the Potential of Small Industry: The Key to Increasing Community Income in Medan Sunggal

Industrial development in North Sumatra is a top priority, with the aim of realizing a balanced and sturdy economic structure. Focus on developing industries that have high competitiveness, especially by utilizing the potential of natural resources, are expected to be the main driver of economic growth and expansion of employment. In this context, small industries and household crafts have a strategic role, given their potential in expanding employment opportunities, increasing exports, saving foreign exchange, and utilizing planned natural resources.

The Role of Small Industries in Medan Sunggal

This study focused on Medan Sunggal District, one of the regions in the city of Medan which has a significant small industry and household craft potential. The analysis conducted using multiple regression equations shows that working capital (MK), marketing system (SP), and raw material prices (HBB) are the main factors that influence the success of the small industrial sector in Medan Sunggal. Meanwhile, Manpower (TK), Labor Education (CAR), and Credit Facilities (FK) have a lower influence.

Classification of Small Industrial Sector and Household Craft in Medan Sunggal

The analysis using the location questionnaire method shows that overall, the small industrial sector and household craft in Medan Sunggal are classified as non-base sectors. That is, this sector is not the main driver of the economy in the region. The location questionnaire index showed less than 1 results on the income and labor indicator during the 1995-1999 period strengthened this conclusion.

Identifying the Base Sector in Medan Sunggal

However, further analysis shows that branches of the small industry sub-sector and building materials, as well as branches of small metal and service industry sub-sectors are the base sector based on income indicators during the same period. That is, these sectors have a significant impact on the economy in Medan Sunggal District and have the potential to encourage increased community income. Meanwhile, Branch of small food and beverage industry sub-sector, as well as public crafts is classified as a non-base sector.

The Relationship Between Income and Employment

Coefficient Analysis of Duplicating shows that increased income can trigger an increase in employment of labor, given the greater investment opportunities and the need for labor that increases with income growth.

Limitations of Small Industrial Sector in Medan Sunggal

Although the small industrial sector in Medan Sunggal has potential, contribute to the improvement of the regional economy is still limited. This can be seen from the low change index for each sector during the 1995-1999 period.

Recommendations for the Development of Small Industrial Sector and Household Crafts in Medan Sunggal

To encourage the development of the small industrial sector and household crafts in Medan Sunggal, there needs to be serious attention from the decision maker and related agencies. Some efforts that need to be made include:

Provision of funds and capital or credit with relatively low interest rates.
Improvement of training and counseling for entrepreneurs and craftsmen regarding company management, marketing systems, and improving product quality.
Cooperation in the pattern of adoptive father relations to find a new market for small industry products.
Development of small industrial centers and household crafts with focus on the branch of the industrial sector that provides a larger base.
Special Market Development With the improvement of facilities and infrastructure to facilitate marketing of small industrial production products.

Conclusion

With a focus on the base sector and appropriate efforts, the development of small industries in Medan Sunggal has a great potential to become the main driver to increase community income and regional economic growth.

Recommendations for Future Research

Future research should focus on the implementation of the recommendations made in this study, and also explore other potential areas of small industry development in Medan Sunggal. Additionally, research should be conducted to identify the factors that influence the success of small industries in other regions, and to develop strategies for promoting the development of small industries in these regions.

Limitations of the Study

This study has several limitations, including the use of secondary data and the limited scope of the analysis. Future research should aim to overcome these limitations by using primary data and conducting a more comprehensive analysis.

Conclusion

In conclusion, this study has shown that small industries and household crafts have a strategic role in the development of the economy in Medan Sunggal. The analysis has identified the factors that influence the success of the small industrial sector, and has recommended strategies for promoting the development of small industries in the region. With a focus on the base sector and appropriate efforts, the development of small industries in Medan Sunggal has a great potential to become the main driver to increase community income and regional economic growth.
Frequently Asked Questions (FAQs) About Small Industry Development in Medan Sunggal

Q: What is the role of small industries in Medan Sunggal?

A: Small industries and household crafts have a strategic role in the development of the economy in Medan Sunggal, given their potential in expanding employment opportunities, increasing exports, saving foreign exchange, and utilizing planned natural resources.

Q: What are the main factors that influence the success of the small industrial sector in Medan Sunggal?

A: The analysis conducted using multiple regression equations shows that working capital (MK), marketing system (SP), and raw material prices (HBB) are the main factors that influence the success of the small industrial sector in Medan Sunggal.

Q: What is the classification of the small industrial sector and household craft in Medan Sunggal?

A: The analysis using the location questionnaire method shows that overall, the small industrial sector and household craft in Medan Sunggal are classified as non-base sectors. That is, this sector is not the main driver of the economy in the region.

Q: What are the base sectors in Medan Sunggal?

A: Branches of the small industry sub-sector and building materials, as well as branches of small metal and service industry sub-sectors are the base sector based on income indicators during the same period.

Q: What is the relationship between income and employment?

A: Coefficient Analysis of Duplicating shows that increased income can trigger an increase in employment of labor, given the greater investment opportunities and the need for labor that increases with income growth.

Q: What are the limitations of the small industrial sector in Medan Sunggal?

A: Although the small industrial sector in Medan Sunggal has potential, contribute to the improvement of the regional economy is still limited. This can be seen from the low change index for each sector during the 1995-1999 period.

Q: What are the recommendations for the development of small industrial sector and household crafts in Medan Sunggal?

A: Some efforts that need to be made include:

Provision of funds and capital or credit with relatively low interest rates.
Improvement of training and counseling for entrepreneurs and craftsmen regarding company management, marketing systems, and improving product quality.
Cooperation in the pattern of adoptive father relations to find a new market for small industry products.
Development of small industrial centers and household crafts with focus on the branch of the industrial sector that provides a larger base.
Special Market Development With the improvement of facilities and infrastructure to facilitate marketing of small industrial production products.

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

A: This study has implications for policy makers and stakeholders in Medan Sunggal, as it highlights the potential of small industries and household crafts in contributing to the regional economy. It also provides recommendations for promoting the development of small industries in the region.

Q: What are the limitations of this study?

A: This study has several limitations, including the use of secondary data and the limited scope of the analysis. Future research should aim to overcome these limitations by using primary data and conducting a more comprehensive analysis.

Q: What are the future research directions?

A: Future research should focus on the implementation of the recommendations made in this study, and also explore other potential areas of small industry development in Medan Sunggal. Additionally, research should be conducted to identify the factors that influence the success of small industries in other regions, and to develop strategies for promoting the development of small industries in these regions.