In facing free market and ASEAN Ecibinuc Community or Masyarakat Ekonomi Asean (MEA), there are some points to be prepared. One of them is UMKM which is considered to be a more resilient in facing monetary crisis. Let say for West Java Province, there are about 30 UMKMs or 25% of the total number of UMKMs in Indonesia. The work force reaches the level of 90% while the Gross Domestic Product or Produk Domestik Bruto (PDB) reaches the level of 50% or more.
It is necessary to pay attention to UMKMs since most of them still work in traditional work pattern. Therefore, this study is focused on Intellectual Capital (IC) which is hardly possessed or even considered by UMKM.
This study take some cases in seven industrial and trade centres in Bandung including knitting industrial centre of Binong Jati, shoe industrial centre of Cibaduyut, tshirt and screen printing center of Suci, jean trade centre of Cihampelas, textile and textile- product centre of Cigondewah, tahu and tempe centre of Cibuntu and doll centre of Sukamulya.
IC has become an important factor in a company since it relates to the intangible assets. IC is comprised by three components of human capital, structural capital and relational capital.
Human capital refers to the people working in accordance with their skill and leadership. Structural capital refers to culture, innovation, knowledge transfer, etc. as the organizational knowledge capital. The last is relational capital. It relates to the relationship of a company with other parties including customers, suppliers, government, society, etc.
IC is thecompany long-term capital which is very essential though it is and endless process to acquire it, i.e. as long as the company exists. Unfortunately, there are still many UMKMs which are still not aware on this issue since either they have already been comfortable with their current position or the owners have somelimited knowledge.
The interview involving 25 respondences of UMKM practitioners shows that the seven industrial centershave some weaknesses. Doll Centre of Sukamulya and Tahu Center of Cibuntu are mostly weak in IC of instrument management. Jean Centre of Cihampelas is mostly weak in IC of Relationship to Co-Operation Partner. T-Shirt and Screen Printing Centre of Suci is mostly weak in IC of relationship with government. Knitting Centre of Binong Jati, however, is mostly weak in IC of Corporate Culture. Shoe Center of Cibaduyut is mostly weak in IC of professional competence. The last is Management Information System or Sistem Informasi Manajemen(SIM) which becomes the lowest IC the Textile Center of Cigondewah has.
From the two year study,In its first, the study had found the main problems often faced by UMKMs pertaining to IC, i.e. instrument management and relationship with government. Instrument management relates to the internal structure of a company which was still not complete. There were still many UMKMs which hadno organizational structure and clear job description and minimum skill, and were lack of knowledge pertaining to the intelectural property on the products they made, etc. However, the relationship with the government was still merely a formal relationship.
On the other hand, government as the decision maker had not already given its main role in managing, guiding and developing UMKM. Though government had often facilitatedseveral discussions and forums pertaining to the development of UMKM, when they were asked to give some solutions, many of the solutions offered could not be realized. One of the ways to support the development of UMKM is the sustainable, systematized, and structured process.
Besides government, there are four other elements that should be responsible for the development of UMKM including the practitioner, academician, media and community. Though they have different roles, the five elements cannot work on their own. The government, for instance, can hold a training and mentoring for UMKM collaborating with academicians or academicians become a consultation medium for UMKM while media can play its role as the marketing for UMKM products. Community, on the other hand, can either be a medium to develop innovation ideas or be a brainstrom medium for UMKM. UMKM practitioners, however, should also be willing to participate if they want to be developped.
Competitiveness and the Implementation of Strategy Formulation
The study found several facts pertaining to UMKMs particularly the ones in seven centers above. Quantitavely, the government has already provided some training to UMKM though the impact has not been significant yet. In fact, it may also relate to the synergy in the five elements of pentahelix. There is still no synergy among them. However, after finding the weaknesses of each element, researchers can design the IC model for UMKM. This measurement model can be used to find whether an UMKM has implemented IC management effectively to reach its competitive factors not.
UMKM practitioners also welcome the development points as well as the measurement towards IC in order to buildthe competitionof their company. However, the practitioners need some support from the government to guide, monitor, evaluate, and help them in finding the solutions for the problems and issues they have. It means that they need not only some measurement but also the follow-ups, particularly to minimize the problems. The results of the study havealso been given to the government, i.e. the Ministtry of Research and Technology, so that there will be some coordination among related ministries in order to follow up the study.
To improve the competitiveness and realize the strategy formulation, all UMKM centers should be willing to develop and adopt this model. They should start it by knowing the visions and missions of their components of their instrument management as well as maintaining or improving their relationship with the governement. Therefore, UMKMs can develop IC model. Unfortunately, there are still some UMKMs which have not designed their visions and missions of their business yet.
In order to improve the competitiveness and design the strategic formulation, there should be a study which analyzes the SWOT (Strenght, Weakness, Opportunity, dan Threats) of the seven UMKM centers in accordance with the IC model. Later the SWOT analysis will be the basis in formulating the strategy for UMKM competitiveness and for therecommendation towardsthe development of the stragey of the competitiveness the seven industrial centers in Bandung have.
