Judul: Competitiveness in Indonesia: Which Province is the Most Competitive?
Abstrak: The issue of competitiveness is widely discussed topic in relation to the globalised economy. Globalisation has reduced trade and investment barriers between countries, leading to significant changes in market rules at both the national and regional levels. The impact of this globalization encouraged the International Institute for Management Development (IMD) to extend the definition of competitiveness into country and regional perspective, which is as the ability of an economy to manage its total resources and competencies to achieve long-term growth, generate jobs, and increase welfare (Bris et al. 2014). To succeed in the new market conditions, a sustained increase in competitiveness is necessary for the development of country in the current global economic environment. Examining regional competitiveness in Indonesia was motivated by the presence of the regional autonomy. Since the Indonesian government implemented a new regulation on regional autonomy, an intense competition between regions arising because the different regions have different resources and management abilities. This condition requires each region to have regional competitiveness (Lestari and Kurniawan 2020). Given that the global competitiveness rank of Indonesia published by the World Economic Forum (WEF) has decreased in the past several years and a few research of regional competitiveness has been conducted in Indonesia, this study aims to analyse Indonesia’s competitiveness at the provincial level. Regional competitiveness score and rank are calculated in this study as an endeavour to elevate national competitiveness by using 5-pillar development, which are economy, firms, government, infrastructure, and human capital. Data envelopment analysis (DEA) is applied as an appropriate method to measure the regional competitiveness score assuming that the level of regional competitiveness is relative. This study produces three main findings. First, the regional competitiveness index scores for provinces located in Java Island are relatively homogeneous, ranging between 0.9 and 1, while the remaining provinces vary from 0.6 to 0.9. Second, the position of the top ten provinces with high level of competitiveness, the second ten provinces with medium level of competitiveness, and the remaining provinces remains unchanged after conducting sensitivity analysis. Third, the efficiency score of pillars determining the index can identify the strengths and weaknesses of a region, which has implications for budget allocation. Policymakers can utilise the third finding to determine the percentage of the budget that should be allocated to spending on different specific factors., Masalah daya saing telah menjadi topic pembicaraan yang luas sejak adanya isu globalisasi dalam ekonomi. Keberadaan globalisasi telah mengurangi hambatan perdagangan dan investasi antar negara yang menyebabkan perubahan signifikan pada peraturan pasar baik di level nasional maupun regional. Dampak dari globalisasi ini telah mendorong Institusi Internasional Manajemen Pembangunan untuk memperbarui definisi dari daya saing dari perspektif nasional dan regional, yaitu sebagai kemampuan suatu wilayah ekonomi untuk mengatur seluruh sumber daya dan kompetensi yang dimiliki untuk mencapai pertumbuhan jangka panjang, menciptakan lapangan kerja, dan meningkatkan kesejahteraan penduduk (Bris et al. 2014). Untuk bisa mencapai kesuksesan dalam kondisi pasar yang berubah tersebut, daya saing yang meningkat secara berkesinambungan dibutuhkan oleh negara untuk keberhasilan pembangunan di era globalisasi. Motivasi dari penelitian daya saing regional di Indonesia ini adalah adanya otonomi daerah. Sejak pemerintah
Keyword: regional competitiveness, DEA, efficiency, bootstrapping