The Influence of Human Capital and Social Capital and the Role of Government on Improving Ground Coffee Business Performance in Rural Area

Abstract

Purpose: This research aims to analyze the influence of human capital and social capital as well as the role of government on the performance of ground coffee businesses. The influence of human capital and social capital as well as the role of government on the performance of ground coffee businesses in rural areas is an effort to improve the skills of human resources so that they can increase the productivity and income of ground coffee agro-industry businesses in rural areas.   Theoretical framework: The focus is to see to how performance of the ground coffee business has a positive impact on the economy by creating jobs and contributing to local economic growth, especially in rural areas. everal concepts, such as: human capital, social capital and role goverment on perfomance ground coffe business to align with the direction of the study.   Design/Methodology/Approach: This study which is quantitative. The research location is Tanah Datar Regency. Data collection was carried out through surveys, field observations, and interviews using questionnaires. Respondents are ground coffee owners in Tanah Datar Regency. The number of research respondents was 104 ground coffee owners. Data analysis was carried out using SEM-PLS.   Findings: The research results found that the human capital of ground coffee processing businesses has a positive and significant relationship in influencing performance. The social capital of ground coffee processing businesses, it has a positive and significant relationship in influencing performance. The social capital of ground coffee processing businesses does not affect human capital. The role of government has a positive and significant relationship with human capital and has a positive and significant relationship with social capital.   Research, Practical & Social implications: This research concentrates on the influence of human capital, social capital, and the role of government on the performance of ground coffee businesses in rural areas.   Originality/Value: This research adds value to the body of knowledge because the results show that without human capital, social capital and the role of government, ground coffee business performance will not improve business performance in rural areas. This study determines that the performance of ground coffee businesses has a positive impact on the economy by creating jobs and contributing to local economic growth, especially in rural areas. Tanah Datar Regency is a region in West Sumatra that has the most businesses engaged in coffee processing, namely around 213 businesses.