Business Climate Survey 2007

Assessment of economic
competitiveness of regions within the
Province of Central Java
 Content of Presentation

• Introduction to BCS 2007

• Assessment of competitiveness – Methodology
• Results on competitiveness on three levels
• Among districts
• Within the regency of Surakarta (Solo Raya)
• Among regencies
• Finding on specific issues
• Preliminary key findings
 Challenges BCS 2007

• Wider scope – covering Central Java but still focus on the

RED area of Solo Raya
• Focus on sustainability – working with stakeholders with
long-term interest
• Adjusting methodology but still assuring comparability
with BCS 2005
• Challenge of data evaluation with various levels of
evaluation
• Delay in data evaluation due to non-performance of IT
company
• Challenge of presenting the huge amount of information in
an appropriate and understandable way
 Organization BCS 2007
• Anchoring local ownership
• Close cooperation with local partners
• BAPPEDA Central Java
• Bank Indonesia
• Newspaper Suara Merdeka
• Kadin
• University Dipponegoro
• GTZ-RED
• Steering committee with all local partners for discussion of design,
methodology, questionnaire, support data collection
• Suara Merdeka through network of local correspondents in charge for
interviews
• External IT provider for developing software for data evaluation
• Technical Assistance through GTZ in survey design and data evaluation
• Data collection October/November 2007
• Data evaluation December to January and ongoing
Definition of Regions

Criteria
• Solo Raya as
given area
• No overlap
• Number of
regions
limited
¾ Former
administrative
regencies as
best fit
 Survey Sampling
Planned

• Sample size: same for Solo Raya (80 per district), reduced
for districts outside Solo Raya (40 per district)
• Sectors: Same for Solo Raya (Tourism, Agribusiness,
Textile & Garment, Furniture, 25% of sample per sector);
outside Solo Raya quota allocated for for Manufacturing
(40%), Trade (20%) and Services (40%)
• Quotas in terms of business size: micro ~25%, small
~30%, medium ~30%, large ~15%
• No quota for gender
• Selection of respondents by correspondents of Suara
Merdeka, based on various information sources
 Sampling reality:
Business Size (employment)

CENTRAL JAVA 28% 41% 23% 7%

RES. PEKALONGAN 26% 45% 24% 5%

RES. PATI 25% 41% 26% 9%

RES. SEMARANG 25% 41% 23% 10%

RES.KEDU 30% 43% 20% 8%

RES. BANYUMAS 29% 43% 16% 13%

RES. SURAKARTA 31% 39% 25% 5%

0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100%

1 to 4 staff 5 to 19 staff 20 to 99 staff 100 or more staff

 Sampling reality Solo Raya
Business size (employment)

CENTRAL JAVA 28% 41% 23% 7%

RES. SURAKARTA 31% 39% 25% 5%

KAB. SUKOHARJO 31% 36% 29% 4%

KAB. WONOGIRI 31% 44% 21% 4%

KAB. SRAGEN 30% 36% 26% 8%

KAB. BOYOLALI 26% 38% 33% 4%

KOTA SOLO 28% 43% 26% 4%

KAB. KARANGANYAR 43% 31% 19% 8%

KAB. KLATEN 29% 46% 23% 3%

0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100%

1 to 4 staff 5 to 19 staff 20 to 99 staff 100 or more staff

 By legal entity and business size

Large 18% 31% 49% 2%

Medium 57% 28% 13% 2%

Small 76% 18% 4% 3%

Micro 88% 11%

0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100%

Individual Unlimited Limited Company Cooperative

 Sampling reality:
Sectors Solo Raya

RES SURAKARTA 27% 26% 24% 24%

KAB. SUKOHARJO 24% 29% 24% 24%

KAB. WONOGIRI 41% 25% 15% 19%

KAB. SRAGEN 26% 28% 25% 21%

KAB. BOYOLALI 26% 28% 24% 23%

KOTA SOLO 11% 21% 31% 36%

KAB. KARANGANYAR 35% 24% 18% 24%

KAB. KLATEN 26% 25% 29% 20%

0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100%

Agribusiness Textile, Garment, Leather Furniture Tourism

 By Gender / Business Size

Central Java 80% 20%

Res. Pekalongan 81% 19%

Res. Pati 85% 16%

Res. Semarang 79% 21%

Res. Kedu 79% 21%

Res. Banyumas 81% 19%

Res. Surakarta 78% 22%

9%
20%
CENTRAL JAVA
0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100% 19%
35%

15%
Male Female 21%
SURAKARTA 19%
39%

8%
29%
SEMARANG 17%
30%

0%
12%
PEKALONGAN 19%
40%

12%
10%
PATI 17%
32%

6%
27%
KEDU 23%
26%

10%
19%
BANYUMAS 19%
35%

0% 5% 10% 15% 20% 25% 30% 35% 40% 45%

up to 4 staff 5 to 19 staff 20 to 99 staff 100 or more staff

 Sampling reality:
Sectors outside Solo Raya

CENTRAL JAVA 51% 34% 15%

PEKALONGAN 36% 36% 27%

PATI 41% 40% 20%

SEMARANG 38% 39% 23%

KEDU 40% 39% 21%

BANYUMAS 38% 41% 21%

SURKARTA 76% 24%

0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100%

Manufacturing Services Trade

 By Turnover Central Java

CENTRAL JAVA 38% 21% 20% 8% 11%

RES. PEKALONGAN 31% 24% 24% 8% 13%

RES. PATI 38% 20% 18% 11% 13%

RES. SEMARANG 29% 18% 24% 10% 18%

RES. KEDU 48% 22% 16% 6% 7%

RES. BANYUMAS 38% 20% 21% 7% 13%

RES. SURAKARTA 42% 22% 19% 8% 7%

0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100%

< = Rp 50M > Rp 50 M - Rp 100 M > Rp 100 M - Rp 500 M

> Rp 500 M - Rp 1 Mia > Rp 1 Mia No answer
 Solo Raya
By Turnover comparison 05/07

70%
60%
50%
40%
30%
20%
10%
0%
2005 2007 2005 2007 2005 2007 2005 2007 2005 2007

< = Rp 50M > Rp 50 M - Rp > Rp 100 M - Rp > Rp 500 M - Rp > 1 Bill

100 M 500 M 1 Mia

KAB. KLATEN KAB. KARANGANYAR KOTA SOLO KAB. BOYOLALI

KAB. SRAGEN KAB. WONOGIRI KAB. SUKOHARJO RES. SURAKARTA
 By Years of Business Operations

Central Java 15% 14% 17% 53%

Res. Pekalongan 19% 16% 17% 48%

Res. Pati 14% 22% 19% 46%

Res. Semarang 20% 11% 16% 53%

Res. Kedu 20% 14% 9% 57%

Res. Banyumas 19% 9% 17% 56%

Res. Surakarta 9% 12% 21% 57%

0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100%

<= 3 Years <= 5 Years <= 10 Years > 10 Years

 By Years of Business Operations and
Sectors

Trade 22% 13% 15% 51%

Services 23% 17% 13% 46%

Manufacturing 12% 13% 18% 57%

0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100%

less than 3 years less than 5 years less than 10 years more than 10 years

Tourism 20% 14% 22% 44%

Furniture 7% 5% 28% 61%

Textile, Garment 6% 19% 20% 55%

Agribusiness 5% 11% 15% 68%

0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100%

less than 3 years less than 5 years less than 10 years more than 10 years
 By product markets
Outside Solo Raya

Central Java 92% 4% 4%

Res. Semarang 94% 3%3%

Res. Pekalongan 86% 6% 8%

Res. Pati 93% 4%3%

Res. Kedu 93% 5%2%

Res. Banyumas 91% 3% 6%

0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100%

locally direct export indirect export

 By product markets
Solo Raya

Kab. Klaten 87% 6% 7%

Kab. Sragen 82% 4% 14%

Kab. Wonogiri 99% 1%

Kab. Karanganyar 94% 3%3%

Kab. Sukoharjo 92% 4% 4%

Kab. Boyolali 72% 13% 15%

Kota Solo 88% 5% 7%

Res. Surakarta 86% 10% 3%

0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100%

Local Direct Export Indirect Export

 Competitiveness
Methodology

• Measuring economic competitiveness based on statistical data and

perception of businesses (BCS)
• Overall competitiveness divided in 6 sub-indexes
• Economic performance
• Business dynamics
• Government capacity
• Government efficiency
• Infrastructure capacity
• Business Environment
• Benchmarking on three levels
• Among all districts in Central Java: Central Java district competitiveness
• Among districts in Solo Raya area: Solo Raya district competitiveness
• Among residencies: Regional competitiveness
• Assessment of specific issues similar to BCS 2003 and BCS 2005
 Competitiveness Results

District Competitiveness Central Java

 Central Java by District
Overall Competitiveness
Central Java by District:
Economic Performance
Central Java by District:
Business Dynamics
Central Java by District:
Infrastructure
Central Java by District
Government Capacity
Central Java by District:
Government Efficiency
Central Java by District:
Business Environment
 Key findings Central Java district
competitiveness (1)

• Most competitive location in Central Java: District Cilacap

• Least competitive locations: Districts Kebumen and Grobogan
• District Cilacap is best performing in Economic Performance and
Perception of Business Environment
• Highest Government Capacity in the 6 cities of Central Java and
district Sragen; lowest performer: Grobogan district
• Salatiga City & district Jepara with most Business Dynamics, least in
Solo city and district Karanganyar
• Best Infrastructure Capacity in cities Magelang & Solo; worst in
districts Pekalongan & Purworejo
• Districts Rembang, Purworejo, Pemalang, Boyolali best performers in
Government Efficiency. District Semarang & city Semarang with
poorest performance
 Key findings Central Java district
competitiveness (2)

• TDP Registration: District Pekalongan with highest rate of

registered businesses (100%); district Jepara (15%) with lowest
registration rate
• Highest OSS satisfaction rate in Boyolali (46%), lowest rate in
Sukoharjo (1%)
• Most consistently acting officials in district Wonogiri, least in
city Semarang
• Highest development expenditures /capita in city Magelang
• Highest share of NPWP holders in city Semarang, lowest in
Wonogiri
• Highest RGDP / Capita in Kudus, lowest in district Tegal
• Highest RGDP growth in Cilacap, lowest in district Batang
 Competitiveness Results

District competitiveness Solo Raya

(Residency Surakarta)
 Solo Raya by District:
Overall Competitiveness
 Solo Raya by District:
Economic Performance
Solo Raya by District:
Business Dynamics
Solo Raya by District
Infrastructure
Solo Raya by District
Government Capacity
 Solo Raya by District:
Government Efficiency
Solo Raya by District:
Business Environment
 Key findings SR district
competitiveness (1)

• Surakarta city most competitive location in BCS 2005 & 2007

• Karanganyar moved up in BCS 2007 due to excellent Economic
Performance (highest RGDP growth rates & lowest
unemployment rate)
• Wonogiri grew stronger in Economic Performance, overtaking
Sukoharjo
• Sragen reached level of Surakarta in Government Capacity due
to highest budget / capita & dramatic growth rate of
development expenditures
• Surakarta & Sragen from top (BCS 2005) to bottom (BCS 2007)
in Government Efficiency; Klaten & Boyolali most efficient
• Boyolali with best OSS and most TDP registered enterprises
 Key findings SR district
competitiveness (2)

• Surakarta with most conducive Business Environment,

Klaten with least conducive
• Sukohrajo is export champion of Surakarta region
• Boyolali & Sukoharjo with highest rate of start-up
businesses
• Surakarta with highest number of firms introducing
product innovation
• Wonogiri improved its Infrastructure since 2005
remarkably
 Competitiveness Results

Competitiveness by Residencies
Overall competitiveness by
Residencies
Competitiveness by Residencies:
Economic Performance
Competitiveness by Residencies:
Business Dynamics
Competitiveness by Residencies:
Infrastructure
Competitiveness by Residencies:
Government Capacity
Competitiveness by Residencies:
Government Efficiency
Business Environment
 Key findings Central regional
competitiveness (1)

• Close rating results with no excellent performer, but also no

notable underperformer
• Banyumas (hosting Cilacap!) as most competitive residency
strong in all sub-indices, except weak Business Dynamics
• Pati (ranked second) due to striking Business Dynamics & high
Government Efficiency
• Surakarta (ranking third) with strongest performance in
Infrastructure & Government Capacity, but weakest in terms of
Perception of Business Environment and second weakest in
Business Dynamics
 Key findings Central regional
competitiveness (1)

• Semarang with high Government Capacity, but extremely weak

Government Efficiency
• Kedu with highest Government Efficiency & low Capacity
shows that government can support businesses through
consistent acting, trust building and service orientation
• Pekalongan at bottom of sample with particularly weak
Economic Performance, but good Business Dynamics,
Government Efficiency and Perception of Business Environment
Competitiveness by Economic
Sectors
 Sector competitiveness 1
Sector Competitiveness 2005

Textile 5.84

Tourism 6.76

Furniture 5.20

Agribusiness 4.27

0 1 2 3 4 5 6 7 8 9 10

Sector Competitiveness 2007

Textile & Garment 6.5

Tourism 5.1

Furniture 6.0

Agribusiness 4.2

0 1 2 3 4 5 6 7 8 9 10
 Sector competitiveness 2

• Textile & Garment and Furniture overtook tourism in overall

competitiveness ranking
• Agribusiness performs weak like in 2005
• Tourism sector lost its role as leading Innovator & became weak
in Business Dynamics
• Furniture sector lost leading position regarding Business
Dynamics since 2005, but improved Innovativeness and
Perception of Business Environment
• Instead, textile & garment has developed to the leader of
Business Innovation and Business Dynamics
• All sectors assess the Government Efficiency being rather
modest (like in 2005)
Let’s have a break……

….before jumping into specific issues

 Specific issues

Topics addressed:
-Key problems identified
-Regulatory framework
-Access to finance
-Innovation and labor issues
-Media
 Bu
si
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ss
C
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a n pe

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sp ti t 50%
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on ne u p
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Pr re ki n
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Nominations

s s Ta tio Se ti on
to x A n P cur
M i
R ar dm rob ty
et ke i n le
rib t is m
u t In tra s
f t
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La ions orm ion

Ac bo a at
ce n
s La r R d t io n
e a
In n
fo Ma d C gu l xes
o n rk e ti a
r o
Q et R ti fic ns
ua e a
lit gu tio
y
St l ati n
a n on
da s
rd
s
1.00
1.25
1.50
1.75
2.00
2.25
Key Problems Central Java
 0%
10%
20%
30%
40%
50%
60%
70%
80%
Business Competition
Staff Recruitment
Electricity

KEDU
Bureaucracy
Access to Input Material
Transportation
Business Competition
Electricity
Business networking

BANYUMAS
Staff Recruitment
Bureaucracy
Transportation
Telecommunication
Electricity

SEMARANG
Business Competition
Business Competition
Transportation
Electricity
Nominations

PATI
Telecommunication
Staff Recruitment
Electricity
Severity

Transportation
Bureaucracy
Telecommunication

PEKALONGAN
Business networking
Transportation
Business Competition
Access to Input Material
Staff Recruitment

SURAKARTA
Telecommunication
Business Competition
Transportation
Electricity
Telecommunication
CENTAL JAVA

Bureaucracy
1.00
1.20
1.40
1.60
1.80
2.00
2.20
2.40
2.60
Top-five list by Residency
 0%
10%
20%
30%
40%
50%
60%
70%

Business competition
Transportation
Telecommunication

Klaten
Business licenses
Electricity
Transportation
Business licenses
Corruption
Bureaucracy

Karanganyar
Access to raw material
Business competition
Electricity
Access to raw material

Solo
Technical production issues
Staf recruitment
Transportation
Telecommunication
Access to finance
Nominations

Boyolali
Electricity
Business competition
Access to raw material
Bureaucracy
Severity

Staf recruitment

Sragen
Business competition
Transportation
Transportation
Access to raw material
Business licenses
Electricity

Wonogiri
Bureaucracy
Business competition
Access to raw material
Corruption
Staf recruitment
Sukoharjo

Transportation
1.0
1.5
2.0
2.5
3.0
3.5
Solo Raya
Top-five list by District
 Perception Business
Environment

CENTRAL JAVA 38% 25% 35%

RES. PEKALONGAN 32% 29% 38%

RES. PATI 33% 21% 45%

RES. SEMARANG 38% 22% 39%

RES. KEDU 34% 30% 33%

RES. BANYUMAS 47% 17% 36%

RES. SURAKARTA 42% 25% 30%

0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100%

Worse No change Better Don't know

Large 33% 19% 48%

Medium 35% 24% 39%

Small 39% 22% 37%

Micro 41% 30% 27%

0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100%

Worse No change Better Don't know No answ er

 Consistency of
Government Officials

CENTRAL JAVA 10% 42% 39% 8%

RES. PEKALONGAN 10% 53% 32% 4%

RES. PATI 16% 37% 37% 10%

RES. SEMARANG 9% 60% 21% 9%

RES. KEDU 8% 38% 30% 6%

RES. BANYUMAS 8% 44% 45% 3%

RES. SURAKARTA 9% 30% 51% 9%

0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100%

Don't agree at all Don't agree partly Agree in many aspects Completely agree No answer

Large 7% 56% 32% 4%

Medium 9% 45% 39% 7%

Small 10% 40% 40% 8%

Micro 11% 40% 39% 9%

0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100%

Don't agree at all Don't agree partly Agree in many aspects Completely agree No answ er
 Change in consistency of
Government Officials Solo Raya 05/07

7%
-10%
4%
-2%
-17%
28%
6%

-20% -10% 0% 10% 20% 30% 40%

KAB. KLATEN KAB. KARANGANYAR KOTA SOLO

KAB. BOYOLALI KAB. SRAGEN KAB. WONOGIRI
KAB. SUKOHARJO
 Perception on Legal
Protection

CENTRAL JAVA 6% 25% 46% 22%

RES. PEKALONGAN 5% 23% 45% 28%

RES. PATI 8% 18% 52% 21%

RES. SEMARANG 6% 33% 36% 25%

RES. KEDU 5% 18% 51% 25%

RES. BANYUMAS 6% 24% 52% 19%

RES. SURAKARTA 5% 28% 45% 17%

35%
RES. SURAKARTA 33%
0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100%
20%
KAB. SUKOHARJO 31%
Don't agree at all Don't agree in many asspects Agree in many aspects
Agree completely No answer 15%
KAB. WONOGIRI 36%
65%
KAB. SRAGEN 53%
28%
KAB. BOYOLALI 35%

KOTA SOLO 17%

31%

KAB. KARANGANYAR 72%

36%

KAB. KLATEN 22%

11%

0% 10% 20% 30% 40% 50% 60% 70% 80%

2007 2005
 Government capacity for
Infrastructure planning

CENTRAL JAVA 5% 47% 45% 3%

RES. PEKALONGAN 7% 57% 35% 1%

RES. PATI 6% 46% 45% 3%

RES. SEMARANG 7% 60% 31% 2%

RES. KEDU 4% 46% 48% 2%

RES. BAYUMAS 7% 37% 51% 5%

RES. SURAKARTA 4% 40% 53% 3%

0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100%

Don’t' agree at all Rather don't agree Agree Agree completely

CENTRAL JAVA 5% 47% 45% 3%

RES. SURAKARTA 4% 40% 53% 3%

KAB. SUKOHARJO 3% 31% 58% 9%

KAB. WONOGIRI 4% 43% 54%

KAB. SRAGEN 0% 39% 60% 1%

KAB. BOYOLALI 1% 71% 25% 3%

KOTA SOLO 6% 25% 59% 10%

KAB. KARANGANYAR 9% 30% 60% 1%

KAB. KLATEN 5% 43% 53%

0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100%

Don’t' agree at all Rather don't agree Agree Agree completely

 Business Inspections
CENTRAL JAVA 44% 50% 4% 2%

KEDU 38% 58% 3%0%

SEMARANG 36% 52% 7% 4%

SURAKARTA 56% 40% 3%1%

PATI 46% 49% 4% 2%

PEKALONGAN 29% 65% 4% 1%

BANYUMAS 44% 48% 4% 4%

0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100%

Never or no answer 1 to 5 times 6 to 10 times 11 to 15 times 16 and more

Average 44% 50% 4% 2%

1%

100 and more 16% 61% 13% 7% 3%

20 to 99 staff 51% 43% 3% 2%

1%

5 to 19 staff 23% 70% 5% 2%

1%

Up to 4 staff 65% 34% 0%0%

1%

0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100%

Never or no answer 1 to 5 times 6 to 10 times 11 to 15 times 16 and more

 Payments for Inspections
100 or more staff 63% 21% 7% 8%

20 to 99 staff 70% 21% 4% 4%

5 to 19 staff 73% 15% 4% 7%

up to 4 staff 80% 11% 1% 6%

0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100%

Never Sometimes Often Always No answer

Average 80% 15% 2%2%

100 or more staff 58% 36% 6%

20 to 99 staff 82% 14% 1%3%

5 to 19 staff 85% 12% 2%

0%

up to 4 staff 83% 10%

0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100%

less than 1 Mio 1 to 5 Mio between 5 and 10 Mio More than 10 Mio No answer
 Informal Payments for Services

CENTRAL JAVA 23% 76%

PEKALONGAN 26% 73%

PATI 24% 76%

SEMARANG 37% 62%

KEDU 12% 86%

BANYUMAS 26% 73%

SURAKARTA 18% 79%

0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100%

Yes No No answer

Large 40% 59%

Medium 28% 71%

Small 22% 76%

Micro 15% 83%

0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100%

Yes No No answ er
 Awareness of Regulations
Influencing Business Performance

CENTRAL JAVA 32% 65%

PEKALONGAN 62% 38%

PATI 37% 63%

SEMARANG 50% 46%

KEDU 9% 88%

BANYUMAS 31% 68%

SURAKARTA 18% 79%

0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100%

Yes No No answer

Large 57% 40% 2%

Medium 43% 55% 2%

Small 32% 65% 3%

Micro 17% 81% 2%

0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100%

Yes No No Answ er
 Most hampering
Business Regulations

CENTAL JAVA 9% 13% 11% 60% 21% 9% 12% 43%

PEKALONGAN 5%5% 14% 81% 19% 4% 16% 49%

PATI 17% 11% 11% 78% 26% 15% 24% 44%

SEMARANG 8% 13% 10% 65% 26% 9% 9% 46%

KEDU 14% 19% 9% 74% 42% 14% 14% 5%

BANYUMAS 10% 28% 8% 42% 48% 26% 6% 28%

SURAKARTA 13% 21% 10% 27% 3%6% 6% 55%

0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100%

Business registration Sector specific regulation Export/import related

Tax regulation Labor regulations Trade related regulations
Environment regulations Others
 Priorities for local Governments

100%

90%
25% 25% 29% 27% 31% 28%
29% 31%
80%

70%

60%
28%
34% 34%
38% 33% 30% 32%
50%
42%
40%
18%
30% 15% 16% 15% 13% 15%
15%
8%
20%

22% 22% 25% 23%

10% 18% 18% 20% 21%

0%
2007 2005 2007 2007 2007 2007 2007 2007

SURA KA RTA B A NYUM A S KEDU SEM A RA NG P A TI P EKA LONGA N CENTRA L

JA VA

Improve infrastructure Support for social programs Support for local business Good Governance Others
 Compliance with
Business Registration – Central Java

63.9%
74.3%
PEKALONGAN 66.4%
58.6%

49.5%
60.0%
PATI 45.5%
48.5%

64.2%
66.7%
SEMARANG 56.3%
47.5%

43.3%
57.5%
KEDU 48.3%
38.3%

44.4%
60.6% 79.3%
BANYUMAS 51.9% 67.0%
41.3% NPWP 49.6%
21.8%
35.4%
44.3%
SURAKARTA 35.2% 84.3%
33.4% 77.6%
SIUP 61.2%
30.0%
0% 10% 20% 30% 40% 50% 60% 70% 80%
81.0%
HO/SITU TDP SIUP NPWP 67.5%
TDP 50.8%
20.0%

81.8%
60.1%
HO/SITU 42.7%
19.1%

0% 10% 20% 30% 40% 50% 60% 70% 80% 90%

Micro Small Medium Large

 Comparison Compliance with
Business Registration Solo Raya 05-07

49%
23%
KAB. SUKOHARJO 40%
22%

25%
18%
KAB. WONOGIRI 26%
28%

26%
32%
KAB. SRAGEN 41%
53%

54%
32%
KAB. BOYOLALI 63%
32%

45%
38%
KOTA SOLO 34%
37%

24%
KAB. 12%
KARANGANYAR 19%
52%

25%
17%
KAB. KLATEN 24%
28%

0% 10% 20% 30% 40% 50% 60% 70%

TDP 2005 TDP 2007 NPWP 2005 NPWP 2007

 Awareness and Use of OSS

61%
CENTRAL JAVA 19%
39%

52%
PEKALONGAN 28%
48%

53%
PATI 25%
48%

57%
SEMARANG 15%
43%

63%
KEDU 16%
38%

59%
BANYUMAS 20%
41%

71%
SURAKARTA 14%
29%

0% 10% 20% 30% 40% 50% 60% 70% 80%

Aware Used Not aware

 Awareness and Use of OSS
by Gender and Business Size

Large 68% 31%

Medium 49% 50%

Small 37% 61%

Micro 25% 74%

0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100%

Yes No No answ er

59%
Male 20%
41%

72%
Female 14%
28%

0% 10% 20% 30% 40% 50% 60% 70% 80%

Aw are Used Not aw are

 Quality of OSS Services

CENTRAL JAVA 11% 77% 10%

PEKALONGAN 12% 76% 9%

PATI 8% 90% 2%

SEMARANG 22% 54% 22%

KEDU 13% 74% 13%

BANYUMAS 22% 66% 13%

SURAKARTA 3% 89% 6%

0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100%

Very good Good Could be better Bad No answer

Large 17% 69% 14%

Medium 12% 80% 8%

Small 11% 77% 11%

Micro 5% 88% 5%

0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100%

Exccellent Good Could be improved Bad

 Present Need of Credit
52%
64%
CENTRAL JAVA 64%
65%

38%
60%
SURAKARTA 61%
60%

68%
58%
SEMARANG 56%
69%

47%
72%
PEKALONGAN 64%
60%

71%
69%
PATI 68%
76%

56%
71%
KEDU 75%
71%
35%
54%
BANYUMAS 62%
65%

0% 10% 20% 30% 40% 50% 60% 70% 80%

up to 4 staff 5 to 19 staff 20 to 99 staff 100 or more staff

 Amount of Credit Needed

CENTRAL JAVA 75% 14% 6% 6%

RES. PEKALONGAN 65% 20% 10% 6%

RES. PATI 70% 17% 9% 4%

RES. SEMARANG 63% 14% 9% 14%

RES. KEDU 75% 14% 4% 7%

RES. KEDU 75% 14% 4% 7%

RES. SURAKARTA 86% 8% 2%3%

0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100%

up to 250 million 250 to 500 million 500 million to 1 Mia More than 1 Mia

Large 15% 8% 21% 56%

Medium 57% 24% 12% 6%

Small 78% 15% 3% 4%

Micro 95% 4%1%

0%

0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100%

up to 250 Mio 250 to 500 Mio 500 Mio to 1 Mia More than 1 Mia
 Credit Application by Business Size

54%
58%
CENTRAL JAVA 53%
40%
46%
62%
SURAKARTA 49%
36%
52%
60%
SEMARANG 57%
46%
60%
61%
PEKALONGAN 57%
38%
35%
53%
PATI 51%
52%
61%
48%
KEDU 59%
42%
70%
58%
BANYUMAS 51%
39%

0% 10% 20% 30% 40% 50% 60% 70% 80%

Micro Small Medium Large

 Perception credit application process

3%
20%
Large 9%
68%
3%
CENTRAL JAVA

19%
Medium 5%
73%
3%
11%
Small 9%
77%
2%
11%
Micro 7%
80%

0% 10% 20% 30% 40% 50% 60% 70% 80% 90%

Generally easy % Generally difficult % Depending on bank % No answer %

 Support for Credit Application

CENTRAL JAVA 60% 24% 3%5% 7%

RES. PEKALONGAN 54% 26% 17%

RES. PATI 41% 39% 2%4% 14%

RES. SEMARANG 60% 15% 7% 9% 9%

RES. KEDU 71% 26% 3%

RES. BANYUMAS 70% 15% 5%3% 8%

RES. SURAKARTA 64% 24% 2% 9% 1%

0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100%

Bank credit officer Family/friend External consultant Others No answer

 Ever Applied – Ever Received Credit

CENTRAL JAVA 85% 15%

PEKALONGAN 90% 10%

PATI 74% 24%

SEMARANG 83% 17%

KEDU 71% 28%

BANYUMAS 88% 12%

SURAKARTA 93% 7%

0% 20% 40% 60% 80% 100%

Yes No No answer
 Credit by Size and by Gender

Large 85% 14%

Medium 84% 16%

Small 87% 13%

Micro 84% 16%

0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100%

Yes No No answ er

Women 88% 11%

Male 84% 15%

0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100%

Yes No No answ er
 Financing Institutions

17%
Others 14%

5%
Government Loan 6%

1%
Venture Capital 1%

2%
Syariah Bank 3%

5%
Saving and Loan Cooperatives 6%

9%
Rural Bank 10%

59%
Commercial Bank 60%

0% 10% 20% 30% 40% 50% 60% 70%

FI applied to FI credit provided

 Innovative Firms

Central Java 34.64%

Surakarta 30.54%

Banyumas 38.13%

Kedu 25.42%

Semarang 31.67%

Pati 46.00%

Pekalongan 43.21%

0% 5% 10% 15% 20% 25% 30% 35% 40% 45% 50%

% of innovative firms 2007
 Solo Raya
Innovative Firms: Comparison 05/07

12.50%
KAB. KLATEN 21.18%

15.00%
KAB. KARANGANYAR 3.41%

51.25%
KOTA SOLO 14.61%

33.75%
KAB. BOYOLALI 19.05%

38.75%
KAB. SRAGEN 10.75%

21.25%
KAB. WONOGIRI 18.75%

41.25%
KAB. SUKOHARJO 3.33%

0% 10% 20% 30% 40% 50% 60%

% of innovative firms 2007 % of innovative firms 2005
 Central Java:
Type of Staff Problems

Type of Staff Problems 2007 - Central Java

Central Government
2.1%
Regulations
District Administration
4.4%
Regulations

Labor Availability 34.7%

Labor Quality 66.5%

Strikes 3.5%

Regional Minimum Wage 12.6%

Staff conditions 40.0%

0% 10% 20% 30% 40% 50% 60% 70%

 Solo Raya:
Type of Staff Problems

Staff Problems 2007 - Surakarta Residency

Central Government
4.9%
Regulations
District Administration
4.9%
Regulations

Labor Availability 31.7%

Labor Quality 46.3%

Strikes 0.0%

Regional Minimum Wage 14.6%

Staff conditions 19.5%

0% 5% 10% 15% 20% 25% 30% 35% 40% 45% 50%

 Availability of Training Institutions

Central Java 14% 4% 76% 6%

Surakarta 11% 3% 77% 9%

Banyumas 15% 8% 74% 3%

Kedu 13% 5% 76% 5%

Semarang 11% 4% 81% 4%

Pati 12% 4% 72% 13%

Pekalongan 23% 3% 74% 1%

0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100%
Available in Good Quality 2007 Available in Poor Quality Not available No answer
 Provision of Staff Training

Central Java 48.9%

Surakarta 41.1%

Banyumas 53.8%

Kedu 46.3%

Semarang 60.0%

Pati 52.0%

Pekalongan 52.5%

0% 10% 20% 30% 40% 50% 60% 70%

 Most relevant Sources for
Business Information

All 25% 18% 4% 12% 5% 27% 6% 3%

0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100%

Business partner New spaper Radio TV

Business Association Supplier and customers Government / Consultants Others
 Most relevant Business Information

CENTRAL JAVA 19% 19% 8% 12% 5% 23% 7% 5%

SURAKARTA 19% 18% 10% 15% 3% 24% 5% 3%

SEMARANG 16% 15% 10% 14% 3% 24% 8% 6%

PEKALONGAN 21% 18% 10% 12% 5% 20% 7% 5%

PATI 20% 21% 6% 10% 8% 21% 7% 6%

KEDU 23% 21% 4% 8% 8% 22% 7% 5%

BANYUMAS 17% 19% 7% 12% 6% 25% 7% 7%

0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100%

Technical information Tips how to run my business

National business new s Local business new s
Information about equipment Information about markets, trends, products
Information about other businesses Advertisments
Others
 Media use for Promotion by
Business Size

Large 45% 55%

Medium 35% 64%

Small 32% 68%

Micro 14% 85%

0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100%

Yes No No answ er

Large 31% 54% 15%

Medium 48% 42% 11%

Small 48% 46% 7%

Micro 54% 40% 6%

0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100%

Radio Local New spaper Television

 Impact of Media for Promotion

1 48% 45% 5%

0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100%

Yes, very strong Yes, somehow No No answer

 Business Prospects today compared
to Past

CENTRAL JAVA 38% 25% 35%

RES. PEKALONGAN 32% 29% 38%

RES. PATI 33% 21% 45%

RES. SEMARANG 38% 22% 39%

RES. KEDU 34% 30% 33%

RES. BANYUMAS 47% 17% 36%

RES. SURAKARTA 42% 25% 30%

0% 20% 40% 60% 80% 100%

Worse No change Better Don't know

 Business Prospects by Business Size

Large 29% 21% 50%

Medium 31% 23% 46%

Small 35% 23% 42%

Micro 37% 28% 35%

0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100%

Worse No change Better No answ er

 By Sector

Trade 31% 24% 46%

Services 26% 24% 50%

Manufacturing 36% 24% 40%

Tourism 28% 23% 50%

Furniture 32% 32% 36%

Textile, Garment, Leather 52% 22% 25%

Agribusiness 49% 24% 27%

0% 20% 40% 60% 80% 100%

Worse No change Better Don't know

 Business Prospects for the future

CENTRAL JAVA 6% 8% 49% 37%

RES. PEKALONGAN 5% 5% 55% 34%

RES. PATI 6% 6% 59% 30%

RES. SEMARANG 7% 7% 54% 31%

RES. KEDU 4% 7% 46% 42%

RES. BANYUMAS 9% 11% 48% 31%

RES. SURAKARTA 6% 9% 41% 43%

0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100%

Worse Same Better Unclear No answer

 Solo Raya
Comparison past: 2003/05/07

70%
60%
60%

50% 42%
40% 35%
30%
30% 25%
20% 20%
20% 15%
11% 9%
10% 5%
2%
0%
Worse No change Better Don't know

2003 2005 2007

 Solo Raya
Comparison Future 2003/05/07

70%
61%
60%
50% 43%
42% 41%
40% 36%

30% 22%
20% 19%
20%
9%
10% 6%

0%
Worse Same Better Unclear

2003 2005 2007

Thank you for patience and
attention!