VOLUME 4 │ NUMBER 1 │ APRIL 2023
http://world.journal.or.id/index.php/epdmISSN: 2963 – 1475
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Analysis of Leading Sectors in Economic Growth in Bojonegoro District
Muhammad Fauzan, M. Taufik, Marseto
Universitas Pembangunan Nasional “VETERAN” Jawa Timur
[email protected], [email protected], [email protected]
Abstract
Abstract The leading sector is a sector that is able to empower the economy and create prosperity in an area. This study aims to identify and analyze the leading economic sector in Bojonegoro Regency in the formation of its regional GRDP.
This study uses descriptive quantitative, namely to determine the leading sector and non-leading sector in Bojonegoro district and uses secondary data in the form of time series data for 2012-2020. The analytical tools used include location quotient (LQ), Shift-share, and class typology. The results show that: (1) Location quotient (LQ) analysis shows the leading sector in Bojonegoro Regency consists of 3 sectors, namely agriculture, forestry, & fisheries, mining &
quarrying, government administration, defense & social security. (2) shift share analysis shows that the National share which has the largest value is the mining & quarrying sector. Proportional share and Diffrential share have all sectors with negative values. (3) Class typology shows that the sector that is included in the fast-growing and fast-growing classification is the water supply sector. , waste management, waste & recycling, transportation and warehousing, information & communication, real estate, government administration, defense & mandatory social security. health services & social activities. The sectors that are classified as advanced but depressed are the manufacturing sector, electricity and gas procurement, other services company.
Keyword:
Bojonegoro District, Economic Growth, Leading Sectors.
1. Introduction
Economic development is basically work carried out by public authorities with the aim that an area in a space has a higher level of government and economic assistance. Economic development is characterized as an endless cycle of dealing with existing financial assets to achieve individual government assistance goals. In achieving economic development, there are three full-scale indicators that are part of the progress of progress. There are 3 indications, namely the level of macro development which is a measure of development progress. The three indicators are the level of development, field of activity or business, and price stability (Mankiw, 2006).
(Definition of Development According to Prof. Dr. Hj. Syamsiah Badruddin, M.Sc, n.d.) In regional economic development, the average development prioritizes economic development through economic growth efforts. The benchmark for economic growth related to increased production of goods and services is Gross Regional Domestic Product (GRDP). The part that shows regional economic growth is the demand for goods and services from outside the region so that local resources will be able to manifest regional wealth because they can open employment opportunities in the region. Analyzing a region while discussing an area cannot be separated from discussing the level of income of the people in that area. In this case, GRDP is often used to see people's income in an area. by carefully calculating GRDP, both based on constant prices and current prices, it can be concluded that the success of development in a region, which shows the rate of economic growth which is an increase in production in various existing business sectors. The description of GRDP which shows the level of economic growth reflects the income generated by the economic sectors in the region.
Economic growth is an increase in the production of goods and services, as well as an indicator to measure the success of the economy in a region through the Gross Regional Domestic Product (GRDP) in the Regions, Provinces, Cities/Districts and Gross Domestic Product (GDP) at the national level (Br Surbakti et al., 2021). The World Bank estimates that world economic growth will increase by 31 percent in 2018 after economic growth in 2017 was far more influential than expected due to continued improvement in investment, manufacturing and trade and developing countries whose export products benefited from stronger product prices. Based on the explanation above, it can be concluded that economic growth does not always increase, but always fluctuates which is influenced by other factors in a country. Indonesia's economy in 2017 grew 5.07 percent higher than the 2016 reach of 5.03 percent. From the production side, the highest growth was achieved by the corporate service business sector of 9.25%. From the expenditure side, the highest growth was achieved by the goods and services export component of 8.50% (bps, 2018).
East Java's economic growth rate continues to show increasingly progressive movement in the last 2 years. The Central Statistics Agency (BPS) noted that East Java's economic growth rate was able to skyrocket to 7.05%, with this economic growth East Java was able to become the second largest economic contributor on the island of Java after DKI Jakarta with a contribution of 24.93%. While the contribution to the acceleration of national economic growth is
VOLUME 4 │ NUMBER 1 │ APRIL 2023
http://world.journal.or.id/index.php/epdmISSN: 2963 – 1475
Attribution 4.0 International (CC BY 4.0)
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14.44%, and East Java is the second largest contributing province. Bojonegoro Regency is a district in the East Java region which has also experienced withdrawals of funds due to the covid 19 pandemic. Based on constant 2010 prices, in 2019 it has decreased from 69.99 trillion rupiah in 2020 to 69.70 trillion rupiah. This shows that during 2020 the economic growth of Bojonegoro Regency is 0.40 percent. Regardless of the existence of a strategy for implementing regional leadership that is systematic and consistent, including through the development of physical infrastructure in the fields of transportation, irrigation, agriculture, strategic industries, especially in the oil and gas sectors which represent 30% of public needs and other social infrastructure. Bojonegoro was affected by Covid 19, but only experienced economic growth constraints of -0.40% and was the best district in East Java Province. Good growth can be a driving force for reducing poverty and unemployment as well as increasing the social welfare index. The oil and gas sector is currently not the mainstay of Bojonegoro Regency because oil and gas sources are not renewable, but Bojonegoro Regency continues to utilize oil and gas support in a sustainable manner by prioritizing environmental conservation
Leading sector is a sector that applies to the economic development of a region with the advantages it has. These sectors will develop more by carrying out investment activities and become the basis for economic activity. This is based on the broad role of the sector in the regional economy (Adisasmita, 2013). The criteria for leading sectors vary. This matter is based on how big the contribution of the sector is in the regional economy, including: first, the leading sector has a high growth rate. Second, the sector has a relatively large number of labor income. third, the sector has a high inter-sectoral contribution both in the future and backward. fourth, it can also be interpreted as a sector that can create high added value (Usya, 2006).
In improving the regional economy, economic basis theory is one of the theories developed. This economic basis theory states that the main determinant of economic growth in a region is directly related to the demand for goods and services from outside the region. The production process in sectors or industries in regions that use local production resources, including labor and raw materials whose output is exported will result in economic growth, increased per capita income, and job creation in the area (tambunan, 1996).
2. Research Method
The location in this research is Bojonegoro Regency, East Java Province. The type of research used is descriptive quantitative research, namely to find out the leading sectors and non-leading sectors in Bojonegoro district, leading sectors are economic capabilities that can be achieved to be grown so that they can become a source of people's livelihood and even fundamentally affect the regional economy, basically affecting the regional economy. as a whole to develop normally and financially (Irawan M.BA & M. Suparmoko, 2012).
In this study the type of data used is secondary data for 9 years from 2012-2020, which is described through the variable economic growth, namely gross regional domestic product (GDP). Data sources were obtained from the Central Statistics Agency (BPS) of East Java Province and the Bojonegoro district statistical center. The following analytical methods were used in this study:
Location quotient (LQ) analysis is a simple indicator that shows the "strength" of large and small sectors in an area compared to the same sector in a wider area (Veronica Tarigan & Dorothea wahyu ariani, 2015). LQ is also used to determine the level of specialization or leading sector. The higher the LQ value of a sector means the higher the competitive advantage of the region concerned in developing the sector. The LQ calculation aims to describe the comparative advantage of a region with other regions. The following formula is used to determine the base sector or leading sector:
LQ=Eij/Ej Ein/En Where :
LQ = Location quotient in Bojonegoro Regency Eij = GRDP sector in Bojonegoro Regency Ej = total GRDP in Bojonegoro Regency Ein = GRDP sector in East Java Province En = GRDP sector in Bojonegoro Regency
The following is a measurement of the level of specialization with the following criteria:
a. LQ > 1 means that the level of specialization of a particular sector at the district level is greater than that of the same sector at the provincial level.
b. LQ = 1 means that the level of specialization of a certain sector at the district level is the same as the same sector at the provincial level.
c. LQ < 1 means that the level of specialization of a certain sector at the district level is smaller than the same sector at the provincial level.
Shift share analysis is an analytical technique that can be used to identify several factors that influence differences in economic growth and performance in several different regions (Field & Macgregor, 2018). The following is the shift share formula:
Dij = Nij + Mij + Cij
VOLUME 4 │ NUMBER 1 │ APRIL 2023
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Mij = Eij ( rin - rn) Cij = Eij (rij- rin) Where :
Eij is job opportunity in sector i area j
Ein is a job opportunity in the national sector I Rij is the growth rate of sector I in area j Rin is the national sector I growth rate Rn is the national economic growth rate
Typology klassen is an economic analysis tool in knowing the classification of economic sectors in a region. This analysis aims to identify the position of the economic sector (Br Surbakti et al., 2021). The following is the classen typology formula:
GDP capt
Growth
Yi = Yn Yi < Yn
ri = rn Developed Regions and Regions grow fast grow fast ri < rn Developed regions Relatively underdeveloped regions and
left behind Figure 1. the classen typology formula Where :
ri : Regional GRDP growth rate i rn : National GRDP growth rate Yi : Regional income per capita i Yn : National income per capita
3. Results and Discussion
Results of location quotient analysis for Bojonegoro district in 2012-2020 as result:
Table 1. Results of location quotient analysis for Bojonegoro district in 2012-2020
GDP Sector 2012 2013 2014 2015 2016 2017 2018 2019 2020 Average agriculture, forestry and
fishing 1,07 1,12 1,14 1,02 0,89 0,84 0,61 0,59 0,72 0,90 B
Mining & quarrying 9,69 9,64 9,51 10,38 10,83 10,95 7,85 8,18 17,08 10,35 B processing industry 0,20 0,21 0,21 0,19 0,17 0,16 0,05 0,15 0,16 0,17 NB supply of electricity and gas 0,08 0,08 0,09 0,08 0,07 0,07 0,05 0,05 0,07 0,07 NB
water supply, waste management, waste &
recycling
0,35 0,38 0,40 0,35 0,30 0,28 0,20 0,20 0,31 0,31 NB construction 0,73 0,77 0,82 0,74 0,63 0,60 0,43 0,43 0,61 0,65 NB wholesale & retail trade of
auto & motorcycle repair 0,43 0,47 0,50 0,45 0,39 0,38 0,27 0,27 0,37 0,39 NB transportation and
warehousing 0,27 0,29 0,31 0,29 0,26 0,25 0,18 0,19 0,25 0,25 NB provision of accommodation &
meals 0,15 0,16 0,17 0,16 0,14 0,13 0,10 0,10 0,13 0,14 NB
Information & communication 1,01 1,05 1,13 1,06 0,95 0,93 0,68 0,68 1,21 0,97 NB financial & insurance services 0,50 0,52 0,55 0,50 0,44 0,43 0,31 0,31 0,41 0,45 NB real estate 0,64 0,68 0,71 0,65 0,57 0,58 0,42 0,41 0,59 0,59 NB company services 0,16 0,17 0,18 0,17 0,15 0,14 0,10 0,10 0,13 0,15 NB government administration,
defense & mandatory social security
1,59 1,66 1,72 1,55 1,33 1,29 0,91 0,90 1,08 1,36 B Education Services 0,41 0,42 0,43 0,39 0,33 0,32 0,23 0,23 0,32 0,35 NB Health and charity service 0,62 0,64 0,69 0,61 0,51 0,48 0,34 0,33 0,50 0,53 NB
other 0,59 0,61 0,63 0,57 0,49 0,47 0,33 0,32 0,46 0,50 NB
From the results of the calculation of the LQ analysis in table 1 it can be seen that the results of the average LQ value in Bojonegoro Regency in the 2012-2020 period, there are 3 superior sub-sectors (base). The sub-sectors are (1) agriculture, forestry & fisheries, (2) mining & quarrying, (3) government administration, defense & social security. the sector is classified as the leading/base sector with the calculation results of LQ>1 . So that these sectors are sectors that are able to meet the needs of their region and can export their products to other regions. This sector can also encourage potential sectors so that it can improve the economy of Bojonegoro district.
VOLUME 4 │ NUMBER 1 │ APRIL 2023
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Table 2. Results of shift share analysis for Bojonegoro district in 2012-2020 as result:
GDP Sector Nij Mij Cij Dij
agriculture, forestry and fishing 1.778,58 - 312,38 -431,72 -742.321 Mining & quarrying 10.498,97 - 1.184,07 -1.636,43 7.678,447
processing industry 905,43 -132,52 -183,15 589,76
supply of electricity and gas 4,10 -0,66 -0,91 2,53
water supply, waste management, waste & recycling 5,45 -0,85 - 1,18 3,42
construction 1.067,56 - 146,02 -201,80 719,74
wholesale & retail trade of auto & motorcycle repair 1.297,68 - 170,28 - 235,34 892,06
transportation and warehousing 138,74 -16,58 - 22,91 99,25
provision of accommodation & meals 133,21 -16,29 -22,51 94,41 Information & communication 1.071,64 -111,43 -154,00 -264.35836
financial & insurance services 211,56 -24,73 -34,17 152,66
real estate 191,65 -23,92 -33,06 134,67
company services 20,67 -2,77 -3,82 14,08
government administration, defense & mandatory
social security 533,77 -92,56 -127,92 313,29
Education Services 167,01 -23,43 - 32,38 111,2
Health and charity service 64,60 -8,27 -11,44 44,89
other 118,63 -20,08 - 27,76 70,79
Education Services 18.209,24 -2.286,84 -3.160,50 22.437.990,8
Table 3. Results of Klassen tipology for Bojonegoro district in 2012-2020 as result:
GDP Sector Quadran
agriculture, forestry and fishing II
Mining & quarrying II
processing industry III
supply of electricity and gas III
water supply, waste management, waste & recycling I
construction IV
wholesale & retail trade of auto & motorcycle repair IV
transportation and warehousing I
provision of accommodation & meals II
Information & communication I
financial & insurance services IV
real estate I
company services IV
government administration, defense & mandatory social security I
Education Services II
Health and charity service II
other III
Based on the results obtained from the classen typology analysis in table 3, it can be seen that there are four economic patterns in Bojonegoro Regency. Sectors included in the fast-developing and fast-growing classification are the water supply, waste management, waste & recycling, transportation and warehousing, information &
communication, real estate, government administration, defense & mandatory social security. Sectors included in the classification of fast developing sectors are agriculture, forestry, fisheries, mining & quarrying, provision of accommodation & food and drink, educational services, health services & social activities. Included in the classification of underdeveloped or underdeveloped sectors are the construction sector, wholesale & retail trade, car & motorcycle repair, financial & insurance services, corporate services.
Quadrant I = A fast-developing and fast-growing area, namely an area that has a higher level of economic growth and income level than the average district/city.
Quadrant II = A fast developing area, namely an area that has a high growth rate but a lower per capita income level than the average district/city.
Quadrant III = A developed but depressed area, namely an area that has a higher per capita income, but the economic growth rate is lower than the average district/city.
Quadrant IV = Underdeveloped or underdeveloped area, namely an area that has a lower growth rate and per capita income compared to the average district/city.
VOLUME 4 │ NUMBER 1 │ APRIL 2023
http://world.journal.or.id/index.php/epdmISSN: 2963 – 1475
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4. Conclusion
Based on the results of the discussion, it can be concluded that the first, the results of the LQ analysis of leading sectors in Bojonegoro Regency for the 2012-2020 period from 17 economic sectors in the gross regional domestic product (GRDP) of Bojonegoro Regency, there are 3 sectors that have an LQ value> 1 or can be called sectors leading sectors, namely (1) agriculture, forestry & fisheries, (2) mining & quarrying, (3) government administration, defense &
social security. secondly, based on the results of shift-share analysis, it shows that the economic structure in Bojonegoro Regency from 2012-2020 compared to East Java province has increased by Rp.22,437,990.8 million. developed and fast growing are the sectors of water supply, waste management, waste & recycling, transportation and warehousing, information & communication, real estate, government administration, defense & mandatory social security. Sectors included in the classification of fast developing sectors are agriculture, forestry & fisheries, mining & quarrying, provision of accommodation & food and drink, educational services, health services & social activities. Sectors included in the classification of underdeveloped or underdeveloped sectors are the construction sector, wholesale & retail trade, car & motorcycle repair, financial & insurance services, corporate services.
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