THE INFLUENCE OF SOCIAL CAPITAL, HUMAN CAPITAL, AND EMPOWERMENT ON THE PERFORMANCE OF MICRO-BUSINESS PURUN WOVEN AND WATER HYACINTH CRAFTS IN HULU SUNGAI UTARA DISTRICT

Abstract

Developing micro, small, and medium enterprises is a significant part of economic development and job creation. Purun and water hyacinth plants are micro-enterprise products that still exist to be cultivated by the people of Hulu Sungai Utara. However, the development of micro and small businesses faces problems that can disrupt the performance of micro and small businesses. The performance and success of micro businesses are influenced by various factors (internal and external). One of the internal factors that affect the performance of micro-enterprises is human capital and social capital; on the other hand, external factors that affect the performance of micro-enterprises are the role of the government (empowerment). The purpose of this study is to analyze the effect of social capital on the performance of micro-enterprises, analyze the effect of human capital on micro-business performance, analyze the effect of empowerment on the performance of micro-enterprises, and analyze the effect of empowerment on social capital, and human capital on the performance of Purun and water hyacinth woven micro-enterprises in Hulu Sungai Utara District. The research was conducted in Hulu Sungai Utara District from February 2023 to May 2023. The micro-business samples in this study are micro-business actors who produce woven products (Purun and water hyacinth woven). The research sampling technique is non-probability sampling using a census technique with a sample size of 70 respondents. The data analysis used is Structural Equation Modeling (SEM) analysis. Social capital does not significantly affect the performance of micro businesses. Social capital is reflected through cooperation, trust, and participation. It is due to the condition of the social capital of artisans who tend to be oriented towards maintaining good relations among woven artisans with suppliers of raw materials and collectors. Human capital has a positive and significant influence on business performance. Human capital is reflected through skills and knowledge. It shows that better skills and knowledge of artisans increase their business performance. Empowerment has no significant effect on business performance. It is because empowerment is still not continuous and has yet to be entirely directed to take advantage of business opportunities through empowerment programs.