Performance and development challenges of micro–small bamboo enterprises in Gunungkidul, Indonesia

Micro-, small- and medium-sized enterprises (MSMEs) play an essential role in the economy of Indonesia, especially in rural areas. In Gunungkidul Regency, a small rural industry that has created many jobs is bamboo-based. This research focused on three bamboo-based industries: durable bamboo, kitchen utensils, and handicrafts (toys). We aimed to determine the economic, social, and environmental performances and the challenges faced in developing these industries. Studies of industry performance are important in developing the bamboo business sector, as they enable the identification of the current condition of the business and the challenges faced by actors within the industry. In addition, there have been few such studies, making any that are done extremely useful. We used field observations and semi-structured interviews, with the selection of respondents carried out purposively by applying a snowball approach. There was a total of 86 informants. The relevant attributes for assessing economic, social, and environmental performance were customer satisfaction, job creation, and the amount of wasted raw material, respectively. We found that the performance of the three bamboo value chains could be slightly optimized, although in general, the performance was good. In terms of economic performance, the value attributes desired by customers were being achieved. For social performance, this industry has been able to create various types of employment, although many are still in the form of temporary work and are dominated by men because of the relatively harsh working environment. In terms of environmental performance, raw bamboo materials were still ending up as waste. However, these industries support a vision of sustaining a green economy. We conclude that to develop bamboo-based industries in Gunungkidul Regency, the main challenges will be to develop and diversify the market. In terms of artisans’ capabilities to create new products, this is unquestionable. The government could act as a better business environment enabler to link craftsmen and potential buyers and to create new markets.