THE INFLUENCE OF INFORMALITY ON THE LIFE CYCLE OF INDUSTRIAL CLUSTERS (CASE STUDY: SENTRA BATIK TRUSMI, KABUPATEN CIREBON)

• Main Author: Azahra Ramadhani, Intan
• Format: Theses
• Language: Indonesia
• Subjects: Produksi
• Online Access: https://digilib.itb.ac.id/gdl/view/73633
• Institution: Institut Teknologi Bandung

The informal sector is considered a failure or gap of the formal sector and a stepping stone to the formal sector. On the other hand, informality has the potential to be a catalyst that encourages the sustainability of industrial clusters. A business unit will easily enter without barriers into a cluster that contains informal business units. In addition, informal business units are also referred to as saviors for the lower class in providing employment. However, informal clusters have limitations in access to capital, less strategic locations, burdensome regulations, and other things that can make the cluster vulnerable and threaten the sustainability of the cluster in its life cycle. It is necessary to know the influence of informality that makes industrial clusters sustainable. The influence can be seen from the aspects of business units and employment. This influence is expected to be a consideration for the government to formulate policies so that it will have implications for urban economic development, especially in industrial clusters that are the foundation of the community in prospering their lives. Based on this explanation, the purpose of this study is to identify the influence of informality on the life cycle of industrial clusters. Case study approach to Sentra Batik Trusmi, Kabupaten Cirebon was conducted to answer the objective of this research. Data collection is conducted by interviews and literature study. Data analysis is done by qualitative analysis method. The result showed that the characteristics of business units in Sentra Batik Trusmi are informal in terms of business units and employment. The effect of informality on the life cycle of industrial clusters, especially in the growth and sustainment phases that show business sustainability, shows a tendency to have business sustainability even though the business units in Sentra Batik Trusmi show an informal. In general, when there are no binding regulations or regulations that do not require micro and small enterprises to have business licenses in the growth and sustainment phases, business units are free and easy to operate business. However, informality can also inhibit business sustainability because there are regulations that require business units to have licenses so that informal business units do not have the opportunity to get customers from the government or not get access to capital and work with large companies. Despite the obstacles, strong encouragement such as the existence of adaptation strategies outside the formal framework such as labor stratification, labor needs and abilities, regeneration, and cultural institutions as a target to market batik are able to maintain Sentra Batik Trusmi in businessiv sustainability. Regulations and policies that accommodate informal business units, such as location, pay system, and work agreements can actually make the Sentra Batik Trusmi business unit threatened in business sustainability.