An Evaluation of the Integrated Entrepreneurship Development Program (PKT) in Supporting Jakarta's Development Agenda

Micro, Small, and Medium Enterprises (MSMEs) arguably have a pivotal role in dealing with empowerment to tackle unemployment and poverty issues [1]. However, the presence of enterprise in solving social issues is still questionable. Enterprises are certainly related to economic growth due to their impact on competitiveness [2], but it is arguably meaningless when pursuing jobless or vulnerable groups into entrepreneur sector without finance, knowledge, or other supports. This implies that entrepreneurship will contribute to solving social affairs when it is managed properly [3].

Managing MSMEs is challenging, especially in relation to the difficulty in transforming a creative economy concept into practices due to a lack of capacity, commitment, pro-business policy, and coordination on the technical level of local authorities [4]. Organizing public entrepreneurs is different from managing pure economic activities which resources of the private sector is more abundant, especially in skills, knowledge and commercial aspect.

The sustainable of MSMEs development is influenced by three aspects namely government policy, coaching, and partnership [1]. Entrepreneurship management should be captured under a legal policy to support the existence of entrepreneurs. Enterprise policy manages both new businesses and ongoing Small and Medium-sized Enterprises. By regulating the entrepreneur sector, it means that the government has supported the increase of entrepreneurial activities to contribute to society's improvement within the country [2, 5].

Government is defined as a regulator, controller, supervisor, or even a facilitator in bridging with other non-government institutions especially for local government as a prime mover to regulate, facilitate and empower industrial creativity [6, 7]. Government as a legal institution has to create a business climate for entrepreneur actors, although in fact institutional rules and rationale commonly function as myths and end as routine ceremonial procedures [8].

MSMEs mismanagement as a part of public sector innovation is usually related to a lack of personnel knowledge on enterprise advancement, primary product selection, financial cooperation, technology, the database of training types, capital loans of financial institutions, coaching, and model improvement [9, 10]. In addition, the changing behavior of customers also should be taken into account. Customers nowadays are more preferable to digital marketing on e-commerce platforms thanks to promotion, security, and easiness [11, 12].

MSMEs are potentially expanded, although finance and government regulation loaded down its growth. The local authorities also have contributed to the barriers to enterprise growth, in which most local officials are still focused more on administrative-oriented, routine-minded and inflexible Fields [4].

The establishment of Government Regulation Number 46 Year 2013 has had a positive effect on MSMEs' development of income and capital improvement and tax simplification for taxpayers in the Indonesian context [13]. One of the following programs held due to the regulation is the Integrated Entrepreneurship Development Program or known as Pengembangan Kewirausahaan Terpadu (PKT). PKT is one of the entrepreneur-based programs held by Jakarta authorities. It is an entrepreneurial development program that is mainly designed for those who are willing to run MSMEs which was originally known as One in One Centre of Entrepreneurship (OK OCE) and is currently known as JakPreneur [14]. The main aim of this program is to encourage new entrepreneurs and to support MSMEs [15]. Since the beginning, this program is expected to be a solution to the three problems that often occur in empowering medium and small businesses. Firstly, it will be able to create and also to train the new entrepreneur. Secondly, it will assist the entrepreneur in accessing the market. Lastly, it will give participants to access the capital. One example of capital access is through providing credit for women without assurance [16].

Some prior research and reviews have been carried out on Jakarta's local government policy on entrepreneurship especially for MSMEs. However, as an initial sustainable entrepreneur program, the evidence in the literature shows that research about PKT Jakarta is few in numbers, so it is obviously difficult to gain data or information about the program. The study on MSMEs development in Jakarta was dominated by OK OCE research based on family welfare, start-up business, collaborative governance and policy framework and stakeholder partnership [17, 18]. It showed that OK OCE has been recognized as a public interest that transformed into policy [19], although in its implementation, the sectoral ego of regional authority has impacted on fracture of the program [20]. As the program has been modified and expanded, the study of PKT as a comprehensive study is very limited. Therefore, within this rationale, the study of PKT Jakarta evaluation needs to be carried out to provide new knowledge and perspective on how local government performs their policy on entrepreneurship programs.

Policy evaluation is primarily focused on outcomes and identification of the implications that which has come up from the fact of implementation, it also produces feedback on the future of policies or programs. Ghazinoory and Aghaei [21] are also questioning whether evaluation and assessment are the same thing, while in fact, they found that even though that terminology is used on different occasions, while assessment is related to prior evidence in supporting the next agenda of evaluation, evaluation is a set of inventories and actions to judge whether the objective of policy or program has been accomplished and the solution is right on the table.

In terms of policymaking evaluation, stakeholders must carry out actions both in past and ongoing activities. For the government, evaluation is a necessity to create openness, liabilities and enhance performances on policy and program measurement. Although as a policy measurement tool, evaluation also faces difficulties in practice which is primarily linked with a political party and political bureaucracy [22].

Evaluating the public sector is intriguing. Some aspects should be undertaken such as control of the quality of the evaluation process, evaluator selection and training, ethical concerns and standards and objectivity in using evaluation outcomes for policy/program improvement [23].

Stufflebeam and Coryn [24] have introduced model implementation based on Context, Input, Process and Product (CIPP) measurement which is used to evaluate the formative and summative assessment. Thus, the CIPP model will be used to assess the PKT which is carried out in five cities in Jakarta Provinces (except for Kepulauan Seribu). By evaluating the program, it is beneficial to provide new knowledge and perspective on how local government performs their policy on entrepreneurship programs and how to handle the potential problems in the future. Furthermore, by doing this research, it is expected to be a novel contribution to academics, research, policy and practice.

3.1 Overview

The initial formation of the entrepreneurship program was established through Governor Instruction of Jakarta number 152 Year 2017 on Formation and Development of Entrepreneurship. The main focus of this regulation is an appointment as well as the delegation of duties and functions of management agencies on the formation of entrepreneurship. This regulation also used to support the priority programs of Jakarta in 2017-2022. As a new program, PKT is arguable as a program that has been transformed dynamically. During its implementation, there were changes to the program in the last 2 years (2018 & 2020).

PKT that has been implemented in the year 2018 is a continuation of pioneer the formation and development program in Jakarta. This program is implemented under Governor Regulation of Jakarta Number 102 Year 2018 on Development Integrated Entrepreneurship Program. The introduction of PKT 2018 is more highlighted on targeting determination. The target goals of PKT 2018 are to produce new entrepreneurs with a total of at least 200,000 individuals during 2018-2020 with targeted groups namely Job seekers, new entrepreneurs and advanced entrepreneurs.

The program is carried out through entrepreneurial capacity building, provision of the facilities and infrastructures, forming a network, provision of incentives on fiscal regions, collaboration, monitoring and evaluation. To improve the capacity of entrepreneurs in its implementation, the program was designed with 7 (seven) steps that should be done based on a hierarchy system. The program has consisted of the following steps namely Registration (P1); Training (P2); Mentoring (P3); Licensing (P4); Assistance (P5); Assistance of Financial Report (P6); and Capital Provision (P7). In this scheme, participants must follow the program in a sequence and did not allowed to jump into the next level of stages before finishing the stage before.

Table 3. Jakarta regional authorities responsible for delivering PKT

Source: Jakarta Governor Regulation Number 2 Year 2020 [28]

Due to the improvement of the concept and target of PKT, there was an alteration of PKT in 2020. The changed was under the Governor Regulation Number 2 Year 2020 on Delivery of Development Integrated Entrepreneurship Program that is better known as JakPreneur as a brand jargon. In this new concept of PKT, the alteration is highlighted into two main ideas. Firstly, the steps of the program are designed based on needs. Secondly, the distribution of functions of local agencies is mentioned and the concept of collaboration is established.

(1) Hierarchy Based Program vs Needs Based Program. While PKT 2018 arranged 7 (seven) stages based on hierarchy, on the other hand, PKT 2020 is focused on the needs of participants. The program is remodified as a flat mode. Instead of continuing the step hierarchically, the procedure of PKT 2020 is more flexible. It means that participants must not follow all phases in but they can choose a series of activities to be followed by the needs of each of their participants.

(2) Distribution of Functions of Local Agencies and Collaboration. In PKT 2020, the government has been trying to run PKT by cooperating with other institutions such as educational organizations, businesses, communities, and/or other institutions or parties that are related to entrepreneur affairs. Also, in this new PKT, there are 7 (seven) local agencies mentioned as a core organization and other additional institutions that have responded in delivering PKT as seen in Table 3. Their main duty is to facilitate forming a network and markets under the authorities of the Assistant Regional Secretariat. Besides forming a network and a common market local agencies can also collaborate with institutions and/or other parties in the stage of activity.

3.2 Evaluation of PKT based on CIPP

Evaluation is one of the crucial elements to measure the effectiveness of policies or programs. It focuses on outcomes and identification of the implications of a policy that help policymakers in deciding the next policies. Conducting an evaluation program means providing a set of systematic tools or methods to measure the process of ongoing programs and/or the result on program impacts using social studies methodologies and professional-based standards [23]. Evaluation is about the extent to which the purpose of achieved and to see the extent to which existing gap between expectation and actual condition.

Based on the scoring of the respondent responses, the results of the level of achievement of PKT Jakarta are elicited through Table 4.

Table 4. The average of CIPP dimensions

The result of participant responses shows that in general, the implementation of PKT Jakarta has worked fairly well with an average value of 3.95. Each breakdown of each dimension will be explained below.

3.2.1 Context

In this context, the term is defined as a set of policies/regulations, goals, preparedness measures, and targets for managing and delivering programs.

Table 5. Average score of indicator’s context

In general, the context has an average score of 4.06 as the highest value than other dimension scores. It seems that the authorities have maintained the program based on regulation with consideration on vision, mission, and target determination. However, it shows that the preparedness of agencies has a lack of marking (see Table 5).

In terms of policy and goals, the government determines the clarity of the goals of the program by modifying regulations and rules in delivering the services based on demand. When the prior program only concentrates on hierarchy, the new scheme emphasizes its purposes on needs-based performance. Undoubtedly, this aspect gained a high score due to its flexibility and closeness to target-oriented. It is argued that authorities considered targeting-based outcomes.

Another movement is the system developed its scheme by inviting non-government institutes to participate. In this new scheme, private sectors and academicians are also being included in this program. However, while the regulations clearly regulate every provision, in fact, the instruction only applies to the roles and the functions of each local agency in implementing the PKT, while clauses on cooperation and the names of the collaborators are only mentioned in the regulation without any technical additional duties related to the role and the functions of each collaborator. It seems that lack of preparedness for stakeholders’ collaboration is a highlight topic in regional innovation [29].

For the Preparedness of agencies, Strategic planning also is still questionable. Since the successful indicators of program accomplishments are not provided. The report on program accountability when this study is carried out also does not cover it. It seems that local agencies lack on preparedness on SMEs strategy (policy and capital) and model development on SMEs [30]. Target determination also gains higher marks. It seems that the government has already achieved the targeted group in number. However, the findings show that there is a slight issue that occurred while looking at the number of total participants (see Table 6). Even though the target of participants has reached above half percent of the target, it seems P1-P3 stages are the most dominant compared to the next stages of PKT. It is assumed that the target’s program is mainly focused on the total number of participants only, meanwhile, the part of stages is not defined comprehensively.

Table 6. The number of total participants (2020)

Source: [14]

3.2.2 Input

Input on this program relates to resources that have been used to succeed this program such as the availability of procedures and resources. There are four aspects used in measuring the input on this program namely Standard Operational Procedures (SOPs), human resources, budget allocation and facilities as seen in Table 7.

Table 7. Input indicator's average score

Based on the table, it seems that SOPs and human resources have the highest score among other input indicators. Standard Operational Procedures (SOPs) as guidance are supporting documents that assisted the implementation of PKT. Unsurprisingly, the score of SOPs indicators is relatively high due to their availability. Some of SOP’s programs are SOP on developed integrated entrepreneurship for data monitoring on compliment indicators, SOP on Event Indicator dashboard by Local Agencies, SOP Event Indicator Dashboard by Local Agencies collaboration with external stakeholders. These SOPs’ assist both employers and members of PKT in dealing with PKT implementation.

Human resource is scored above 4.05 which is seen as quantity and quality. From the aspect of quantity, the program is supplied with many parties ranging from the regional Jakarta city administration which covers 7 (seven) the local office of origin, and other agencies that are related to the PKT program and non-government sector. Also, this program is supported by external mentors that are spread in 42 districts in DKI Jakarta plus 2 Districts in Kepulauan Seribu. In terms of quality, the inclusion of collaboration with the private sector, banking and capital investors, academic institutions, and e-commerce enhances the quality of the program. The participation of the participants Jakpreneur is also increased from the human resource quality indicators, especially in the skill from making products, packaging, marketing, to financial management.

Budget Allocation and facilities were the two aspects with the lowest scores respectively. Budget allocation is measured through its availability, accessibility and transparency. The availability of the budget to support the implementation of PKT is based on the local budget (APBD) of DKI Province. The allocation has been set on local agencies (OPD). In addition, the city administration also coordinates with bank and capital institutions such as Bank DKI and the organization of Wakaf (non-bank institutions). Bank DKI has launched a total budget of IDR 100 billion in assisting PKT program (and it is still being expanded). Bank DKI as one of the cooperation partners with the Jakarta Provincial Government to develop PKT, especially during stage P7 (capital) plays a very important role especially in the context of the supplier of the budget in supporting this program. The role of Bank DKI as the only capital giver will provide funds for new entrepreneurs that already pass stages P1 and P4. The problem in this indicator is Bank DKI is the only bank that is in corporate in assisting capital for members.

In terms of accessibility, within the changes in PKT regulations, the participants as investors continue to get ease and accessibility. Due to its flexibility, participants have been facilitated by giving can be directly capital by the prerequisite of 2 (two) products program have been launched by the Bank DKI namely Monas Product for New Comers and Monas Product for Jakpreneur. Even before to a process of validation by the party a bank against recipients’ capital should be with a certificate and official statements, but now it is can be in access by filling up the form which has been provided online is of websites which have provided in through: www.jakpreneur.jakarta.go.id. In filling form on the website is quite give evidence scanning ID card, family and marriage certificates, Micro Small Business License (IUMK)/business license (SKU) from the permit that taken from stages P4.

3.2.3 Process

In this dimension, the process is referred to seven stages of PKT namely registration, training, mentoring, licensing/permit, marketing, financial report and capital assistance.

Table 8. Process indicator's score

Table 8 shows the average score of process dimension. It can be seen that during its implementation, registration – licensing/permit (P1-P4) have a higher number compared to the rest of stages P5-P7. Out of seven stages, the fourth prior of stage gained a higher score above 4.5. For the registration stage, it is noticeable that the availability on online through registration jakpreneur.jakarta.go.id and the availability of facilitators to assist ease participants to join the community. Training also has its easiness, since both the quantity and quality of instructors/mentors have met the minimum criteria. The collaboration among government, professional and college facilitators has provided courses on hard and soft skills in entrepreneurship. The model of training is coaching-based. The mentoring also gained a positive review from participants. Based on interviews and observation, mentoring is a stage of interaction between participants and mentors in knowledge transferring such as packaging, marketing and other relevant skills in conventional and digital-based apps (WhatsApp group, Instagram, Facebook and so on). In addition, in some subunits/agencies, there are online bazaars supporting entrepreneurs.

In licensing/permit aspects, procedure, time spent and requirements have been used to measure the permit stage on PKT. Two indicators on License/permit have a high score by 4.10 above namely its procedure and terms and conditions required, while the time that has been spent only gained an average score of 3,96. Based on the results and interview, it is undeniable that one of the strongest motifs of the reason society joins PKT is thanks to the availability of permit easiness. Since the amendment, the licensing stage has changed its procedure to simplify the mechanism of the program. The concept of change is supported by facilitating more proactive service for the permit by the motor license shuttle service (AJIB) [31]. The AJIB team by the use of specialized applications will help those in completion form and all application processes. Before AJIB was introduced, the licensing progress from January to June 2020 has been produced 6952 permits, while within the presence of AJIB, there were 50902 permits for SMEs has been launched by the investment and One Door Integrated Service Agency (PMPTSP Agency) [32].

Marketing is one of the aspects of receiving a lower grade compared with the aspects on the other dimensions with a range of average of 3.67 to 3.82. The research carried out by Bandung Institute of Technology (ITB) also states that apart from issues surrounding human resources capital, other MSMEs' main problems are marketing and entrepreneurial capital [33]. This is also recognized both by the government and participants. MSMEs nowadays, still rely on public servants as primary target consumers, and it is difficult to achieve sustainability when focusing only on one primary target, even though marketing also has been introduced in events, online marketing, market shows, exhibitions and workshops on SMEs [34].

Financial Report Assistance has gained scores in the range of 3.77 to 3.79. In PKT, literature on finance is vital to measure the ability of participants to dealing with final report production which will be used as a standard to grant access for participants to achieve a higher level on PKT. It is a primary skill for entrepreneurs for accessing capital from sponsors. In financial reporting, the provincial government city has cooperated with PT Fintek Natural Sharia and PT Lunaria Annua Technology, and other social institutions. The purpose of the implementation of this activity is to assist the collaborator in choosing capital donations, training and also marketing [14].

Capital provision is the last step of PKT. Ever since the year 2020, authorities have given flexibility for the member in choosing the stage in accordance with their needs, but to be able to get capital assistance, participants are required to finish registration and already has a business and licensing (P1 and P4). In capital, city government is cooperating with Bank DKI as a banking institution that facilitates for MSMEs enterprisers. There are two types namely Monas for New Entrepreneur and Monas 25. Monas for new entrepreneur is a capital credit for working capital or investing which are the maximum productive loans IDR 10 million, within a period rest reached 18 months with 7% interest rate equivalent with interest on Credit on Society Business (KUR) based on government regulation [35]. While Monas 25 is working capital and additional capital working with the amount of IDR 5 to 25 million for entrepreneurs under PPKUKM agency, Industrial and Trade Agency supervisor in Jakarta Local Corporation Pasar Jaya [36].

Of all evaluation aspects, the capital is the lowest given by participants average by 3.49. This capital is not without reason get relatively low compared to all aspects. With the burden in marketing, entrepreneurs will ultimately hope to receive funds in an effort to expand. However, surprisingly, although participants know that PKT has seven stages in total, they are not necessarily will participate until the stage of capital provision. They are preferable to get a mortgage instead of borrowing capital through financial institutions that have been appointed by the government. Most of them only need to secure on business permit.

3.2.4 Product

There are two aspects of product dimension in explaining the level of achievement of PKT namely target achievement and the impact of the program. From all indicators asked for respondents, only impact for people that indicated high score namely 4.05, while the rests are still sufficient. It seems that PKT is assumed success in delivering welfare improvement for society through an entrepreneur program (see Table 9).

Table 9. Product indicator's score

The total number of participants based on the stage of activity in each stage has experienced a fall. It can be said from P4 to P7 that the decline was significantly high. Of the total registered participants by 56.708 participants, only around 8209 people continue to the licensing and 566 participants have reached capital stages (P7) (again see Table 6). In terms of target achievement, the score indicates that the target on creating new entrepreneurs and realization on target is relatively close to being achieved, even though as mentioned earlier that target setting was still being focused for the initial stage. Although the success of registration is not followed by the next process, participants who had joined in the next stages have declined.

It could be seen from the increase of the number of participants every year which were proven by perceived good on registration procedures, availability of information on registration, timeliness of registration, while for advance stages (P4-P7) have decreased. This issue, need the attention of the government so that the benefits of the program can be will be conducted for long term. It is not enough to revise the registration stage, but the most important is how to create a sustainable business climate for entrepreneurs.

The impact of the program on other parties, including the local government, entrepreneurs, banking and investors, schools and colleges, and entrepreneur climate Jakarta has attracted value sufficient either by virtue of the perception of respondents with values that are almost the same within range of 3.8 – 3.9 This indicates that the involvement of related parties in PKT considered had not yet been optimal. Actually, the government was encouraged collaboration from other parties in succeeding this program not only through the acceleration of command PPKUKM agency team development be directly responsible to the city governor. Local agencies engagement is considered insufficient without involving other parties. So far, the program PKT related parties were involved, however, it seems that it has not been worked optimally. It needs clearer and practicable collaboration with stakeholders so the impact of the program the organization felt by all parties.

The level of achievement of PKT in terms of four aspects of evaluation (Context, Input, Process, and Product), only one dimension of context has good merit, while the rest need to be optimized. It seems that the authorities have maintained the program based on regulation with consideration of vision, mission, and target determination. In terms of policy and goals, the government determines the clarity of the goals of the program by modifying regulations and rules in delivering the services based on demand. In this new scheme, the private sector and academicians are also included in this program. It is assumed that the target’s program is mainly focused on the total number of participants only, meanwhile, the part of stages is not defined comprehensively.