The Role of Local Potential-based Entrepreneurship through

Community Empowerment in Tourism Village Development:

Case Study: Ponggok Village, Polanharjo Subdistrict, Klaten

Regency, Indonesia

Anggi Rahajeng

and Galuh Primardianti Suprapto

Regional Economic Development Study Program, Vocational College, Universitas Gadjah Mada, Indonesia

Department of Economics and Business, Vocational College, Universitas Gadjah Mada, Indonesia

Keywords: BUMDes Tirta Mandiri, Ponggok Village, Gender, Village Entrepreneurship, Entrepreneurial Ability.

Abstract: The acceleration of development in Indonesia began to focus on rural/village development. The connection

between entrepreneurship and the development of Ponggok Village is proven by the business management

under the BUMDes (Village-owned Enterprise) Tirta Mandiri. The purpose of this study was to determine

the relationship between village entrepreneurship with the development of a spring-based tourism village

(natural pond) and to find out the comparison of community entrepreneurial abilities based on gender. The

methodology used was descriptive analysis with correlation statistics. The results of this study indicated that

there was a positive relationship between village entrepreneurship and village development by an increase

in BUMDes' contribution to village revenue. The comparison of entrepreneurial abilities between men and

women was observed by using indicators of independence, motivation, tolerance, attitudes in facing risk

challenges and future orientation. The results of this study indicate that male entrepreneur groups have

better entrepreneurial abilities than female groups. Female entrepreneur groups are only superior in terms of

independence, so based on these characteristics, the efforts made by female entrepreneurs are relatively

more sustainable, but the business scale that is relatively less developed compared to male entrepreneur

groups. Indicators of entrepreneurial endurance both men and women in the tourism sector, especially

tourism village, can be developed and tested further by simulating what happens when thereare shocking

cases such as an economic crisis and security instability by using econometrics.

1 INTRODUCTION

Poverty and economic gap among regions is an

important issue in Indonesia's development

including rural and urban development based on

BPS data regarding the number of population below

the poverty line in 1970 - 2017 among villages and

cities in Indonesia issued by the Central Statistics

Agency. The number of poor people in villages and

cities is significantly different. Although in number,

the poor population in the villages has a decreasing

trend from year to year. Law No.6 of 2014 about

villages aims to accelerate Indonesia's development

through village/rural development. Village

development requires a new breakthrough in the

form of innovation, one of which is the development

of entrepreneurship.

Ponggok Tourism Village emerged from the

initiative of "agent of change" who had the

entrepreneurial spirit to develop Ponggok Village

into a tourism village by utilizing the local potential

and community empowerment. This is supported by

research conducted by Nur Firdaus (2014) and Fajar

Sidik (2015) which stated that social

entrepreneurship plays a real and important role in

solving social problems. The creation of social

values and innovation are the main instruments in

social entrepreneurship. Using an entrepreneurial

approach as an effort to solve social problems is a

tremendous breakthrough.

Utilizing local potential such as agro-tourism can

make the village more advanced and independent

(Pribeanu, Gheorghe, 2014) and can reduce

unemployment (Nordin, Aleff Omar Shah, 2014).

The biggest potential of Ponggok Village is water,

so it is utilized for tourism. The community later

Rahajeng, A. and Suprapto, G.

The Role of Local Potential-based Entrepreneurship through Community Empowerment in Tourism Village Development: Case Study: Ponggok Village, Polanharjo Subdistrict, Klaten

Regency, Indonesia.

DOI: 10.5220/0008491002270232

In Proceedings of the 7th International Conference on Entrepreneurship and Business Management (ICEBM Untar 2018), pages 227-232

ISBN: 978-989-758-363-6

227



formed a village-owned enterprise namely BUMDes

Tirta Mandiri to manage the water-based tourism.

BUMDes Tirta Mandiri is the main economic

driving force of Ponggok Village which manages

almost all the economic activities of the village

community. Before the BUMDes was established,

the community-managed village’s potential and the

management was not well organized. Through the

existence of BUMDes, the management can be

improved to be more organized including water

management and cropping patterns. The

management succeeded in bringing great

development to Ponggok Village.In the period of

one year which is in 2010, Tirta Mandiri BUMDes

generated a profit of IDR 100 million or around $

7,142 (exchange rate $ 1 = IDR 14,000). The

revenue was deposited to the Regional Government

as a PAD (Local-generated Revenue) of IDR

30,000,000 or $ 2,142 (30% of profit). The

allocation of the 10% profit was used to pay the

second level of BPJS (life and health insurance)

premiums of all Ponggok Village residents.

The acquisition of raw revenue of BUMDes Tirta

Mandiri in 2012 - 2016 showed an increase. The

highest increase occurred in 2015, which increased 6

times from 2014. BUMDes Tirta Mandiri is

supported by the Ministry of Village, Development

of Disadvantaged Regions and Transmigration

which has priority programs to build villages

through the village’s superior product development

program, Village-Owned Enterprise (BUMDEs), as

well as building ponds and sports facilities. The

implementation of the program is carried out by

utilizing Village Funds and Village Fund Allocation

from the APBN/APBD (State Budget/Local

Government Budget). Regarding this, each village

does not only find its potential, but also determines

the village's superior products and develops them to

improve the welfare of the community. Currently,

BUMDes Tirta Mandiri has been developed and is

able to create new entrepreneurs who can contribute

to the development of the village.

The management carried out by BUMDes Tirta

Mandiri was able to encourage the growth of

productivity of Ponggok Village community. The

success in managing local potential to improve the

economy of the local community proven by the fact

that Ponggok Village won the award as the

Community Empowerment Village and the best

BUMDes in the category of Community

Empowerment in the 2017 BUMDes Expo

organized by the Ministry of Village, Development

of Disadvantaged Regions and Transmigration.

Ponggok Village is also considered one of the 10

Best Tourism Villages according to the Ministry of

Village, Development of Disadvantaged Regions

and Transmigration. In line with Crant (1996),

Timmons and Spinelli (2004; 93) conveyed that

there are differences in entrepreneurial abilities

based on gender (Solano and Rooks, 2014; Ordaz,

2016). The entrepreneurial ability of men and

women is different (Dahalan, 2013; Sherlywati,

2017). In line with gender, Jurdana, Dora Smolčić,

Ines Milohnić, Lorena Dadić (2015) stated that

educational background, work experience and

motivation also influence the entrepreneurial

conditions.

2 LITERATURES

The tourism sector is one of alternative to achieve

rural development because tourism has a number of

distinctive economic characteristics, leading to a

special economic impact analysis. Globally, tourism

is a major industry and is a major sector in many

countries. According to the United Nations World

Tourism Organization (UNWTO), over the past six

decades, tourism has experienced sustained and

diversified growth to become one of the fastest

growing and largest economic sectors in the world.

The World Travel and Tourism Council (WTTC)

estimates that tourism accounts for 9.2 percent of

global GDP and estimates that this will continue to

grow to more than 4 percent per year over the next

ten years to reach around 9.4 percent of Gross

Domestic Product (WTTC, 2010). Over time, more

and more tourist destinations have been opened, and

this increases investment in tourism development,

turning modern tourism into a major driver for

socio-economic progress. (Tourism Economic

Summary, 2010).

Tourism development is fundamentally driven by

business. However, the government plays an

important role as a partner in tourism development

to a level which is not replicated in most other

industries through their broad involvement, by all

levels of government, in tourism planning and

strategy, marketing, infrastructure development, land

use planning and responsibility. (Tourism Economic

Summary, 2010).

Rural development, according to some experts is

part of the "Regional Development". Regional

development is an effort to develop and to improve

inter-dependency relationships and interactions

between economic systems, people (social systems)

and the environment as well as the natural resources

(ecosystem). This is manifested into the

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development of economic, social, political, cultural

and security defense that should be in the context of

balance, harmony and conformity. Regional

development conception, in addition to ensuring the

harmony of inter-regional development, also aims to

set up a link to the relationship between national

development plans and regional development plans.

Nowadays, tourism village becomes an

opportunity to develop rural area. The following

factors: (1) Scarcity, or in other words, the rare

nature of tourist attractions that cannot be found in

other places; (2) Naturalness which is the nature of

tourist attractions that have never experienced

changes due to human intervention; (3) Uniqueness

which is the nature of tourist attractions that have

comparative advantages compared to other tourism

objects; (4) Community empowerment which is able

to encourage the community to participate and be

empowered in managing tourist attractions in their

area.

Village owned enterprises as an entrepreneurship

venture of village. According to Kasmir (2013),

entrepreneurship is the ability to create something

new and different. Additionally, an entrepreneur is a

person who has the ability to create something that

has never been there before, or it could be by

creating something different from what is already

there.

Associated with entrepreneurship, Kaswan and

Akhyadi (2015:8) emphasize that there are two

essential things in an entrepreneurial society:

innovation and entrepreneurship, which are the

activities that sustain integrated life. Likewise

Suryono and Sumarno (2013) stated that in

entrepreneurship, there are at least three

components, such as entrepreneurship learning, the

existence of entrepreneurial incubators and

entrepreneurial centers.

According to the Minister of Home Affairs’

Regulation No. 39 of 2010 Article 1 paragraph (6),

BUMDes are village enterprises formed/established

by the village government whose capital ownership

and management are carried out by the local

government and the community. The establishment

of this village-owned enterprise is also based on the

Regulation No. 4 of 2015 concerning the

Establishment, Management and Maintenance, and

Dissolution of Village-Owned Enterprises and The

Minister of Home Affairs’ Regulation No. 39 of

2010 in Chapter II on the establishment of village-

owned enterprises. This formation comes from the

district/city government by establishing regional

regulations regarding the guidelines for the

establishment and management of BUMDes.

Furthermore, the local government formed a village-

owned enterprise implementing village regulations

following the regional regulations.

As an institution that is expected to encourage

village independence and to be a driving force of the

village economy through various village business

units, the Local Government has been implementing

BUMDes in many villages. It applies also in Klaten

Sub-District Government. Since 2009 until now the

Klaten Sub-District Government has been

implementing the BUMDes program in many

villages so that the village's potentials can be

developed to improve the economy of the village

community itself. Klaten Sub-District Regional

Regulation Number 21 of 2013 concerning

BUMDes, has the aim to provide guidance, certainty

and clarity about the establishment and management

of BUMDes, which hopes to become a legal basis

for BUMDes in the Klaten Sub-District. For each

region, it is obligatory to have BUMDes so that later

they can improve the welfare of the village

community itself in terms of economy, health,

education and even foster the mutual cooperation

among communities.

3 METHODOLOGY

3.1 Data

This study was done in Ponggok Village, Polanharjo

Subdistrict, Klaten Regency. This research was

quantitative descriptive. The study was conducted in

May - July 2018. The types of data used in this study

were primary and secondary data. Primary data was

obtained through questionnaires examining the

comparison of entrepreneurial abilities based on

gender. Secondary data were the outcomes of village

business recorded in the APBDes (Village Budget)

that were used to explain the village

entrepreneurship variables as a form of BUMDes’

contribution in Village-generated Revenue, and

Total Village-generated Revenue (PADes) explained

Ponggok Tourism Village development variables.

Respondents in this study were the community

groups that carried out business/entrepreneurial

activities under the management or in partnership

with BUMDES Tirta Mandiri. There were 76

respondents taken by using purposive random

sampling technique.

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3.2 Analysis Tool

This study employed descriptive analysis with

correlation analysis. The correlation analysis used

Pearson Correlation Test to determine the

relationship between village entrepreneurship and

the development of tourism village and the Mann-

Whitney Test which is a form of Non-Parametric

Test to determine the mean difference between the 2

groups. The Mann-Whitney test was intended to find

out the comparison of the entrepreneurial ability of

the community based on gender, whether there were

significant differences or not. In this study,

indicators of entrepreneurial abilities tested were

independence, risk challenges, future orientation,

tolerance and motivation. Indicators of

independence, risk challenges, future orientation and

tolerance were adopted from Sherlywati, Rini

Handayani, Asni Harianti’s research (2017), while

indicator of motivation was adopted from the

research of Dora Smolčić Jurdana, et al., (2015)

citing from Megginson (2017) about one of the

characteristics of successful entrepreneurship, which

is motivation.

4 RESULTS AND DISCUSSION

4.1 The Relationship between Village

Entrepreneurship and the

Development of Ponggok Tourism

Village

Village entrepreneurship was observed from how

large the contribution of BUMDes as an economic

institution managing village business units that

produces village-level entrepreneurs. BUMDes'

contribution to village development can be seen

from the data of village business outcomes in the

APBDes. PADes data (Village-generated Revenue)

was used as a proxy for village development in 2012

- 2017. Previously, normality tests were conducted

to find out whether the data was normally distributed

or not. The results showed that the data was

normally distributed with P-Value greater than 0.05

or 5%, so that Parametric Test could be applied. The

Parametric Statistical Test used was Pearson

Correlation, with the following results:

From employing Pearson’s correlation test, a

positive Pearson Correlation value of 0.966 was

obtained. This positive relationship illustrates the

relationship between Village Business Outcomes

and PADes. If the Village Business Outcomes

increased, the village-generated revenue (PADes)

became higher too. Based on the 99% trust level, the

BUMDes’ contribution and the village-generated

revenue in Ponggok Village had a relationship of

96.6%. With a 99% trust level it obtained a

significance value of 0.002. If the significance value

is more than 0.05, Ho is accepted. If it is smaller

than 0.05, Ho is rejected or H1 accepted. From this

test, the significance value was <0.05, so Ho was

rejected. It means that there was a significant

relationship between BUMDes’ contribution and

village-generated revenue. As the manager of the

Village business, BUMDes Tirta Mandiri

contributed to the increase of Village-generated

Revenue through the outcome of village business in

the APBDes.

4.2 Community’s Entrepreneurial

Ability based on Gender in

Ponggok Village

4.2.1 Respondent Identity

In this study, the majority of respondents came from

the male group which was 39 people, whereas the

female group was comprised of 37 people. The

majority of male and female respondents were in the

range of 26-45 years old.

Table 1: Demographic characteristics of sample.

Age 12-25 Age 26-45 Age 46-65

Male 13% 24% 14%

Female 4% 28% 17%

Tourism

Operators

Merchandise

Cullinary

Non Fish

Fish

Cullinary

Male 8% 3% 10% 30%

Female 3% 8% 13% 25%

<1 yea

1-3 years 3-5 years >5 years

Male 13% 20% 4% 15%

Female 10% 25% 6% 7%

Source: Primary Data Processing, 2018

The majority of male group was working in

fisheries business such as fish farmers. The majority

of female groups were working in the Small and

Medium Entreprises (processing Tilapia fish). The

education level of the majority of male and female

groups were Senior High School/Senior Vocational

School. The majority of respondents did not come

from BUMDes managers or employees. The

majority of male and female groups has been

running business in the range of 1-3 years, meaning

their business emerged after the establishment of the

tourism village or BUMDes Tirta Mandiri.

Observing the indicator of time spent for

entrepreneurship, female groups spent longer hours

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of 4-8 hours compared to male groups who spent 2-4

hours in overall. This is because on average, males

were working at the fishery business from 8.00am to

12.00pm. Drawing from the previous job, the

majority of male groups worked as traders while the

majority of female groups were housewives. Along

with the existence of a tourism village or BUMDes

Tirta Mandiri, there was a change in the livelihoods

where the majority of male groups became fish

farmers and the majority of female groups worked in

SME of Tilapia fish processing. It shows that the

role of the PKK Women in collaboration with

BUMDes Tirta Mandiri succeeded in encouraging

housewives to use their spare time to be productive

in business. The existence of tourism village also

made changes in the income of the residents. If

previously the majority of male and female groups

earned below the Minimum Wages Standard,

recently their income are increasing to a range of

IDR 1,662,001 - IDR 4,000,000 ($ 118- $ 285) per

month, which is above the Minimum Wages

Standard of Klaten Regency.

4.2.2 Validity and Reliability Test

Validity test in this study employed a formula of

corrected item – total correlation. This value was the

value of item validity. Validity test was done by

comparing the value of validity per item with R table

in DF = N-2 and probability 0.05. This study used a

2-way test so that the R table value with DF 74 was

0.2257. Thus the statement item was confirmed

valid. The method used to test the reliability in this

study employed the Cronbach Alpha coefficient. The

measurement of reliability according to Sekaran in

Sugiono (2011) is seen from the value of Cronbach

Alpha. If it is above 0.6 it can be concluded that the

research instrument is good or reliable.

All statements in each variable had fulfilled the

validity test because it had r count> r table value

(0.2257) and reliability, so the instrument was valid

and reliable to use.

4.2.3 Mann-Whitney Test

The Mann-Whitney test was used due to the

condition that the research data came from a number

of respondents who were classified into groups that

were mutually independent, which is based on

Gender (Male and Female). The data was observed

to see a comparison of community entrepreneurial

abilities based on gender.

Based on the results of the Mann-Whitney Test,

table of Ranks showing the Mean Rank or average

rank of each group was obtained.

The table shows that the variable of

independence in the female group is higher than the

male group, which is 39.94> 37.20. The second

variable is the risk challenge. In the male group this

variable has a greater value than the female group

that is equal to 39.41> 37.49. The third variable is

the future orientation. It shows that the male group

has a higher value than female group, which is

39.96> 36.88. The fourth variable shows that the

male group has a higher tolerance compared to the

female group, which is 43.50> 32.94. The fifth

variable regarding the motivation shows that the

level of males’ motivation is higher than that of

females, which is 41.16> 35.54. Therefore, male

group is considered having higher entrepreneurial

abilities than female. Male group has higher value

on 4 out of the 5 indicators. Nowadays gender

difference was no longer a barrier in business or a

barrier to become entrepreneurs especially in terms

of tourism sector for promoting tourism and

hospitality. The number of women entrepreneurs

grows rapidly, which is relevant to the emergence of

new tourism destinations such as village tourism,

agritourism, ecotourism. For some reasons, cultural

background, norms and religion influence

entrepreneurship perfomance of women in rural

areas. Based on the significance of women’s roles in

rural development through entrepreneurship,

improving the environment and employment of

women in rural areas should be seen as an important

aspect in tourism development planning and

policies.

5 CONCLUSIONS

The development of Ponggok Village is associated

with its success in utilizing local potential and

empowering its people through BUMDes. BUMDes

is one of the strategies to develop new entrepreneurs

that support the improvement of community welfare.

The results of- this study indicate that there is a

positive relationship between village

entrepreneurship and village development as

indicated by an increase in BUMDes' contribution to

village income. Entrepreneurial growth turns out to

have relationship with gender. The comparison of

entrepreneurial abilities between men and women

employs indicators of independence, motivation,

tolerance, attitudes in facing risk challenges and

future orientation. The results of this study indicate

that male entrepreneurial groups have better

entrepreneurial abilities than females.

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Table 2: The Statistics on Mann-Whitney Test.

Test Statistics

Independence Ris

Future Tolerance Motivation

Mann-Whitney U 668.000 683.500 661.500 520.000 613.500

Wilcoxon W 1488.000 1349.500 1327.500 1186.000 1279.500

Z -.544 -.384 -.617 -2.100 -1.113

Asymp. Sig. (2-tailed) .586 .701 .537 .036 .266

a. Grouping Variable: Gende

Source : Primary Data, 2018 (processed)

Female entrepreneur groups are only superior in

terms of independence. Therefore, based on these

characteristics, the efforts made by female

entrepreneurs are relatively more sustainable, but the

business scale is relatively less developed/growing

when compared to male entrepreneurial groups.

6 LIMITATIONS

This study has limitation in research sampling

because the number of population of the study was

not known. In this case, the population was a

community that has an entrepreneurial entity under

BUMDes Tirta Mandiri, Ponggok, Klaten. Another

limitation of this study lies in the factors that

become indicators of entrepreneurial ability, namely

independence, risk taking, future orientation,

tolerance, and motivation; while there are still many

other factors that can become indicators of

entrepreneurial ability.

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