Effects of Investment Liberalization

Effects of Investment Liberalization The influence of investment liberalization has caused many retailers to emerge from abroad with extraordinary capital capabilities to carry out their activities in Indonesia. This condition is increasingly felt, after the issuance of Presidential Decree No. 96/1998 concerning Closed Business Fields and Open Business Fields with Certain Requirements for Investment. The existence of this Presidential Decree invites foreign retailers to open their businesses in Indonesia coupled with changes in the lifestyle of modern people who are all practical (Bagus, 2009). This makes traditional markets even more desperate, traditional markets themselves are one of the tools that can strengthen the economy, considering that small businesses in the traditional retail industry have proven not vulnerable to the impact of the multidimensional crisis that has hit Indonesia since 1997. Most Indonesians still rely on traditional markets, because the number of lower-middle class workers is absorbed quite a lot. Therefore, if the market is allowed to die due to the presence of modern markets and hypermarkets, the potential for unemployment will continue to grow (Jemabut, 2011). In Indonesia, the market share and business performance of traditional markets are declining, while at the same time the modern market is increasing every year. The contribution of traditional markets was around 69.9% in 2007, decreasing from the previous year (2006) of around 73.7%. The opposite condition occurs in supermarkets and hypermarkets, their contribution is getting bigger day by day. In 2006 the contribution of the modern market of 26.3% increased the following year, 2007 to 30.1% (AC. Nielsen, 2007). So far, the presence of modern markets has always been contradicted by the existence of traditional markets as two different poles. Shopping in modern markets is easier with complete and professionally managed facilities. In addition, compared to traditional markets, modern markets also have more attractive services than traditional markets, instant with better packaging so that goods are perishable and last longer even at a slightly more expensive price (Kusdarjito, 2009).

While in traditional markets are still faced with the inconvenience of shopping. The results of a previous study conducted by Ekapribadi (2007) stated that there are several weaknesses of traditional markets. These weaknesses have become basic characteristics that are very difficult to change. Market design and appearance factors, atmosphere, layout, layout, diversity and quality of goods, expenditure promotion, limited market operating hours, and optimization of selling space utilization are the biggest weaknesses of traditional markets in facing competition with modern markets. The decline in public interest in shopping at traditional markets is not only caused by the lack of development of traditional markets, but also influenced by the lack of carrying capacity of traditional merchant characteristics (Wiboonpongse and Sriboonchitta, 2006). This is reinforced by the findings of research conducted by Paesoro (2007), the main cause of the defeat of traditional markets with supermarkets is weak management and poor infrastructure of traditional markets, not solely because of the existence of supermarkets. Supermarkets actually take advantage of the poor conditions that exist in traditional markets (Trisno, 2011). However, traditional markets also have several advantages in natural competitive services such as strategic location, wide sales area, complete diversity of goods, low prices, bargaining system that shows familiarity between sellers and buyers which are advantages possessed by traditional markets. Previous research conducted by Indiarti and Langenberg (2004) on the development of SME businesses stated that the factors that influence the development of traditional businesses are entrepreneurial psychological capital, human resource management, innovation, characteristics of entrepreneurs, and characteristics of the business itself. This phenomenon of modernization and globalization occurs in almost all cities in Indonesia, including the city of Semarang. In 2010, the number of markets owned by the Semarang City Government known as traditional markets was 67 markets spread throughout Semarang City (Bappeda, 2010). Meanwhile, the number of modern markets, until 2010 was recorded at 723 units (Bappeda, 2010). One of the traditional markets in Semarang is the Peterongan market. The location of the Peterongan market which is in the middle of residential housing with a fairly high

density is a problem in itself, in addition to the difficulty of land for market development also the circulation around the market becomes increasingly irregular by residents' activities. The conversion of the function of the residential zone into a commercial area can be seen in the residential area around Pasar Peterongan which turned into a row of shops, even in the area there are now two modern multistories markets with the presence of "Java Supermall" accompanying the pre-existing "Sri Ratu" supermarket, as well as the establishment of "Ramai" supermarkets, "Anterah" grocery stores and the outbreak of Indomaret and Alfamart minimarkets around the Peterongan market which encouraged the emergence of competition. In addition, several problems related to the existence of traditional markets today include the following (Bappeda, 2010): (a) The increase of modern markets, both on a regional scale such as supermarkets and hypermarkets, to the environmental scale in the form of minimarkets managed by large entrepreneurs and retail conglomerates emerging in residential areas in Semarang City, is considered to have a tendency to urge the existence of stalls, shops and traditional market traders; (b) Traditional market conditions physically lag behind modern markets, due to low levels of awareness of discipline, cleanliness and order, as well as lack of attention to the maintenance of physical facilities (dirty, smelly and muddy environmental conditions). Based on these logical reasons, this study aims to determine the influence of Psychological Capital factors, Entrepreneurial Characteristics, Innovation, Human Resource Management, and SME Characteristics on the business development of traders in the Peterongan market both partially and simultaneously. Corporate development is defined as a firm's ability to make acceptable actions and outcomes (Pfeffer & Salancik, 1978). But the development of the company must be conceptualized and operationalized, and can be measured in several ways. The same thing was stated by Kaplan and Norton (in Riyanti, 2003) who asserted that financial performance is not able to "say much" about the company's past or does not automatically lead the company to a better direction. Indiarti and Langenberg (2004) formulated factors that influence business development including Psychological Capital, Entrepreneurial Characteristics, Innovation, Human Resource Management and SME Characteristics

Psychological capital is conceptualized by Hmieleski and Car (2008) as a building part or foundation consisting of elements: self-efficacy (Bandura, 1997), optimism (Carver & Sheier, 2003), hope (Snyder, Sympson, & Ybasco, 1997), and resiliency ( Masten, 2001). People decide to become an entrepreneur not because he is not able to get a good job. Many entrepreneurs are well educated and have established jobs before deciding to become entrepreneurs. Someone wants to be an entrepreneur because they are not afraid to work hard, but instead consider hard work as a challenge. The decision to start your own business also requires internal motivation, such as wanting to actualize (Riyanti, 2003). According to the Big Dictionary of Indonesian, entrepreneurship comes from the word entrepreneur (English) is "a person who is clever or talented in recognizing new products, determining new ways of production, structuring operations for the procurement of new products, marketing them, and managing their operating capital" (Sumarsono, 2010). An entrepreneur must have creative and innovative abilities in finding and creating various ideas. Every entrepreneur's thoughts and steps are business. In fact, a businessman's dream is already an idea to be creative in finding and creating new businesses. The skills and strategies of an entrepreneur must be able to create an opportunity, anticipate it and strive for success for himself, his company, and others. Everything about entrepreneurial success related to his business can be learned, trained and known so far as entrepreneurship. The discipline of entrepreneurship in its development has experienced rapid development in various fields such as: industry, trade, education, health and in other fields. Entrepreneurship is the study of values, abilities, and one's behavior in facing life challenges (business) (Kristanto, 2009). Therefore, a successful entrepreneur must have entrepreneurial characteristics. These characteristics include demographic characteristics such as age and gender, as well as individual background such as education and previous work experience have an impact on entrepreneurial intentions and efforts (Kolvereid, 1996; Mazzarol, Volery, Doss, and Thein, 1999). Thompson (2005) defines innovation as "the generation, acceptance and application of a new idea, process, product or service". Meanwhile, according to Jensen and Webster (in Sumarsono, 2010) the innovation aspect includes four parts: product, process, organization, and marketing. A superior entrepreneur has creative qualities,

innovative, originality, dare to take risks, is forward-oriented and prioritizes achievement, resistant to the test, diligent, not easily discouraged, high-spirited, disciplined steel and firm in stance. Entrepreneurship cannot be taught in a seminar or a book, as well as swimming, golfing, or riding a bicycle. It needs actual practice and examples and evidence in the field to form an entrepreneurial ability. Contagion is the best way to teach entrepreneurship (Sumarsono, 2010). The essence of entrepreneurship is the ability to innovate in order to transfer economic resources from low-productivity areas to high-productivity areas. Schemerhorn (2001) defines human resource management as the process of recruiting, developing, and retaining a talented and energetic workforce to support an organization's mission, goals and strategy. According to Havenga (2009) there are four main parts in human resource management, namely selection and recruitment, communication and motivation, training and development, and welfare and compensation. The origin of the company, the length of time the company has been operating, the size of the company, and the source of funding are categorized as characteristic factors of SMEs (Indiarti &; Langenberg, 2004).