Develop policies that create a conducive business climate

Oct 13, 2025 by thesweetdesigns.com 63 views

Analysis of the Effect of GRDP of the Industrial Sector, Inflation, Business Unit on Manpower Absorption of the Manufacturing Industry Sector in Jambi Province

Introduction

The manufacturing industry sector is a crucial component of the economy in Jambi Province, contributing significantly to the Gross Regional Domestic Product (GRDP). However, the sector's performance is often influenced by various factors, including the GRDP of the industrial sector, inflation, and the number of business units. This study aims to analyze the effect of these factors on manpower absorption in the manufacturing industry sector in Jambi Province. The research method applied is quantitative descriptive, with secondary data collection sourced from the publication of the Central Statistics Agency (BPS) of Jambi Province. To analyze data, the Vector Error Correction Model (VECM) method is used with the help of EViews 9 software.

Methodology

The data used in this study is a time series data (time series) for 30 years from 1991 to 2020. The research method applied is quantitative descriptive, which aims to describe and analyze the data collected. The secondary data collection is sourced from the publication of the Central Statistics Agency (BPS) of Jambi Province. The Vector Error Correction Model (VECM) method is used to analyze the data, with the help of EViews 9 software.

Results

The results of this study show that the GRDP of the industrial sector, both in the short and long term, has a negative and insignificant effect on employment in the industrial sector of Jambi Province. This indicates that although the GRDP of the industrial sector is increasing, it is not necessarily followed by an increase in employment. This phenomenon can be caused by automation and technology that reduces the need for human labor.

On the other hand, inflation in the short term shows a positive effect, although not significant, on employment. However, in the long run, inflation has a positive and significant effect. This is understandable, because controlled inflation can create opportunities for economic growth, which in turn can increase the demand for labor in the industrial sector.

The number of business units in the short term also has a positive but not significant effect on employment. However, in the long run, there is a significant negative influence. This phenomenon may illustrate that despite an increase in the number of business units, operational efficiency and technological developments that continuously cause a reduction in labor needs. Many businesses may prefer to use automatic machines rather than employing more employees.

Discussion

The results of this study have several implications for policy development in Jambi Province. Firstly, the negative and insignificant effect of the GRDP of the industrial sector on employment suggests that the province should focus on developing policies that can create a conducive business climate and encourage innovation and improve labor skills. In the modern era, increasing the competitiveness of the manufacturing industry sector does not only depend on increasing GRDP, but also to the ability to adapt to change, including technology and rapid economic change.

Secondly, the positive and significant effect of inflation on employment in the long run suggests that the province should aim to maintain controlled inflation rates. This can create opportunities for economic growth, which in turn can increase the demand for labor in the industrial sector.

Lastly, the significant negative influence of the number of business units on employment in the long run suggests that the province should focus on developing policies that can improve operational efficiency and technological developments in the manufacturing industry sector. This can help to reduce labor needs and increase productivity.

Conclusion

In conclusion, this study provides valuable insights for stakeholders in Jambi in formulating a more appropriate policy to increase employment in the manufacturing industry sector. Through these efforts, it is hoped that Jambi Province can achieve sustainable economic growth with better jobs for the community.

Recommendations

Based on the results of this study, the following recommendations are made:

Develop policies that create a conducive business climate: The province should focus on developing policies that can create a conducive business climate and encourage innovation and improve labor skills.
Maintain controlled inflation rates: The province should aim to maintain controlled inflation rates to create opportunities for economic growth and increase the demand for labor in the industrial sector.
Improve operational efficiency and technological developments: The province should focus on developing policies that can improve operational efficiency and technological developments in the manufacturing industry sector to reduce labor needs and increase productivity.

Limitations

This study has several limitations. Firstly, the data used is a time series data (time series) for 30 years from 1991 to 2020, which may not be representative of the current situation. Secondly, the research method applied is quantitative descriptive, which may not capture the complexity of the relationships between the variables. Lastly, the study only focuses on the manufacturing industry sector in Jambi Province, which may not be generalizable to other sectors or provinces.

Future Research Directions

Future research directions include:

Investigating the effect of other factors on employment: Future studies can investigate the effect of other factors, such as education and training, on employment in the manufacturing industry sector.
Analyzing the impact of policy interventions: Future studies can analyze the impact of policy interventions, such as tax incentives and subsidies, on employment in the manufacturing industry sector.
Examining the relationship between employment and economic growth: Future studies can examine the relationship between employment and economic growth in the manufacturing industry sector.
Q&A: Analysis of the Effect of GRDP of the Industrial Sector, Inflation, Business Unit on Manpower Absorption of the Manufacturing Industry Sector in Jambi Province

Q: What is the main objective of this study?

A: The main objective of this study is to analyze the effect of the Gross Regional Domestic Product (GRDP) of the industrial sector, inflation, and the number of business units on manpower absorption in the manufacturing industry sector in Jambi Province.

Q: What is the research method applied in this study?

A: The research method applied in this study is quantitative descriptive, with secondary data collection sourced from the publication of the Central Statistics Agency (BPS) of Jambi Province. The Vector Error Correction Model (VECM) method is used to analyze the data, with the help of EViews 9 software.

Q: What are the results of this study?

A: The results of this study show that the GRDP of the industrial sector, both in the short and long term, has a negative and insignificant effect on employment in the industrial sector of Jambi Province. Inflation in the short term shows a positive effect, although not significant, on employment. However, in the long run, inflation has a positive and significant effect. The number of business units in the short term also has a positive but not significant effect on employment. However, in the long run, there is a significant negative influence.

Q: What are the implications of this study for policy development in Jambi Province?

A: The results of this study have several implications for policy development in Jambi Province. Firstly, the negative and insignificant effect of the GRDP of the industrial sector on employment suggests that the province should focus on developing policies that can create a conducive business climate and encourage innovation and improve labor skills. Secondly, the positive and significant effect of inflation on employment in the long run suggests that the province should aim to maintain controlled inflation rates. Lastly, the significant negative influence of the number of business units on employment in the long run suggests that the province should focus on developing policies that can improve operational efficiency and technological developments in the manufacturing industry sector.

Q: What are the recommendations of this study?

A: Based on the results of this study, the following recommendations are made:

Develop policies that create a conducive business climate: The province should focus on developing policies that can create a conducive business climate and encourage innovation and improve labor skills.
Maintain controlled inflation rates: The province should aim to maintain controlled inflation rates to create opportunities for economic growth and increase the demand for labor in the industrial sector.
Improve operational efficiency and technological developments: The province should focus on developing policies that can improve operational efficiency and technological developments in the manufacturing industry sector to reduce labor needs and increase productivity.

Q: What are the limitations of this study?

A: This study has several limitations. Firstly, the data used is a time series data (time series) for 30 years from 1991 to 2020, which may not be representative of the current situation. Secondly, the research method applied is quantitative descriptive, which may not capture the complexity of the relationships between the variables. Lastly, the study only focuses on the manufacturing industry sector in Jambi Province, which may not be generalizable to other sectors or provinces.

Q: What are the future research directions?

A: Future research directions include:

Investigating the effect of other factors on employment: Future studies can investigate the effect of other factors, such as education and training, on employment in the manufacturing industry sector.
Analyzing the impact of policy interventions: Future studies can analyze the impact of policy interventions, such as tax incentives and subsidies, on employment in the manufacturing industry sector.
Examining the relationship between employment and economic growth: Future studies can examine the relationship between employment and economic growth in the manufacturing industry sector.

Q: What are the practical implications of this study?

A: The practical implications of this study are that it provides valuable insights for stakeholders in Jambi in formulating a more appropriate policy to increase employment in the manufacturing industry sector. Through these efforts, it is hoped that Jambi Province can achieve sustainable economic growth with better jobs for the community.