WHAT CHANGES ARE NEEDED FOR THE DEVELOPMENT OF MSMES OF THE INDIGENOUS PEOPLES OF SOUTHWEST SUMBA, INDONESIA?

Authors

  • Frans Gana Faculty of Social and Political Sciences, Nusa Cendana University, Kupang, Indonesia
  • Soleman Nub Uf Faculty of Social and Political Sciences, Nusa Cendana University, Kupang, Indonesia
  • Frengky Dupe Faculty of Social and Political Sciences, Nusa Cendana University, Kupang, Indonesia
  • Ricky Foeh Faculty of Social and Political Sciences, Nusa Cendana University, Kupang, Indonesia
  • Fred Dethan Faculty of Social and Political Sciences, Nusa Cendana University, Kupang, Indonesia

Abstract

Investment for the development of MSMEs in local communities is believed to be a strategic
instrument to simultaneously preserve indigenous knowledge related to production and improve
the welfare of local communities so that local communities can escape poverty. This study takes
the context of the local Sumba community in Southwest Sumba Regency where there has been
MSMEs investment by the government, banks and communities in the production of ikat weaving
and food, but the development of MSMEs is slow. The main research question in this study is
what changes are needed for the development of ikat weaving and food MSMEs in the
indigenous communities of Southwest Sumba. This research uses primary data obtained through
interviews and focus group discussions with MSMEs, banking, academics and local government
actors in May and June 2024. Using a combined lens of competitive strategy (Porter, 1980) and
institutional theory (Acemoglu and Johnson, 2012), this study found that the main root problem
of the stagnation of ikat and food MSMEs in local communities is the contamination of MSMEs
financial management by funeral customs. and high-cost marriages which have an impact on low
levels of initial investment and low savings for re-investment for MSMEs development. As a
result, the level of production of ikat and food does not approach the economic scale, product
development is slow, and it cannot compete with substitute products from other business actors.
Weaponizing the main strengths of MSMEs, namely innate abilities passed down from
generation to generation in the local product production system, as well as funding opportunities
from the government and banks, and the threat of competition from MSMEs and large companies
that produce substitute goods, this study recommends sequential institutional and investment
changes.

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Published

2024-12-27