TKDN Compliance Analysis in Yogyakarta Creative Industry Sector of Fashion, Culinary, and Crafts

Abstract

Tingkat Komponen Dalam Negeri or The Local Content Requirement (TKDN) is a policy instrument aimed at increasing the use of local components in the production process of goods or services. The implementation and fulfillment of TKDN within small industries (IK), particularly in the creative industry sector, face unique challenges. This study aims to assess the readiness of TKDN compliance to become a partner of the government in the procurement of goods and services. The research evaluates four main variables: materials, labor, factory overhead costs, and development costs. Respondents in this study are IKM/ SMEs creative industry sectors of fashion, culinary, and crafts, in Yogyakarta, with samples drawn through purposive sampling. The research method employed is qualitative with a descriptive analysis approach. Data collection techniques include literature review, field study, observation, documentation, and FGD. The results show that the fulfillment of TKDN has been quite good in several aspects, such as the use of local raw materials and operational cost management. However, aspects such as local supply provision, workforce training, occupational safety, and certification remain challenges that need improvement. The main obstacles are the lack of information, complex administrative processes, and the perception. To support the fulfillment of TKDN in small industries, further efforts are needed from the government in terms of socialization, assistance, and simplification of certification procedures.