IMPROVING PUBLIC PARTICIPATION IN INNOVATION MANAGEMENT OF VILLAGE-OWNED ENTERPRISE: LESSON LEARNED FROM THE BEST VILLAGE-OWNED ENTERPRISE IN INDONESIA

Abstract

With trillion rupiah in support through the Village Fund, the number of village-owned
enterprises (VOE) increased significantly and almost touched 50% of the total number of
villages. However, there was an anomaly, when many VOE appeared with large income
values, at the same time the economic disparity in the village community also increased
(BPS, 2019). So it takes an explanation of how community participation related to the
management of VOE. This research was conducted to address these key issues using a case
study analysis approach to the management of VOE. This research uses a qualitative
approach. Case study analysis was carried out at VOETirta Mandiri in Ponggok Village,
Klaten, central Java, Indonesia. The VOEhas an income of more than 5 billion per year and is
considered the best VOEin Java. Data collection is planned through in-depth interviews and
field observations. Interviews were conducted with VOE stakeholders (Village Government,
VOE Managers, and Village Communities). Data collection was carried out in the period
March to May 2019. The results according to the general view, VOE are still considered
owned and controlled by the village government. However, the Ponggok Village Government
tries to show efforts to reverse this notion by involving residents as parties who also have
VOE. The mechanism provides an incentive structure for villagers in having a real VOE. By
placing residents as beneficiaries as well as VOE owners, the Ponggok Village Government
encourages villagers to be empowered either directly (reducing unemployment, increasing
villagers' income, and developing micro-small businesses), or indirectly through the
realization of village government social protection programs (Free Health Insurance,
Educational Scholarships for Students, and Assistance for Older Citizens). Politically,