The Synergism of Food Industry and the Local Economy in Addressing Rural-Urban Linkage in Semarang Regency

Abstract

Industry in Semarang Regencyis still dominated by the wearing apparel industry subsector which is labor intensive and footloose that tends to be located around urban areas. But, in certain potential sub-sectors such as food industry has a strong linkage with the agriculture and livestock, and geographically tends to be located around the periphery or rural areas. It establishes sectoral specialization at the local level, potentially to form industrial clusters and encourages spatial integration between rural and urban areas. This research aims: (1) to identify the synergism of food industry and local economy; and (2) to understand how the synergism address the rural-urban linkage in the region. The research was done in district and sub-district (meso) level during 2018-2019. The research uses data of Large and Medium Industries (LMIs), related Small Industries (SIs), and the local economy. Quantitative-qualitative descriptive analysis is used to identify the synergism of food industry and the local economy and how it addresses the rural-urban linkages. Result shows the synergism of food industry and local economy in Semarang Regencypotentially encourages the linkages between this sub-sector with livestock and horticulture or the agricultural sector in general. The linkage of food industry and agriculture region shows the proximity of industry to the source of raw materials in rural areas. This synergism increases positive externalities of industry such as job creation, increased investment value and knowledge transfer. Urban and metropolitan areas become the potential market for food industry products. Food industry encourages the spatial integration between rural and urban or mutual rural-urban linkages. It can explain the regional network based on the clustering model through providing opportunities for the development of local economic or endowment factors in the region. The cluster strategy approach is used in the development of this sub-sector in order to increase regional competitiveness. The development of small towns in periphery regions or rural areas can be a counterbalance to the tendency of over-urbanization in the metropolitan areas.