FEB UB Lecturers Research the Impact of Downstreaming and Partnership with the Surrounding Community

Head of Research Team, Abdul Ghofar, SE., M.Sc., DBA., Ak (right)

A number of lecturers from the Faculty of Economics and Business (FEB) Universitas Brawijaya (UB) conducted research on the impact of downstreaming on the community around the company. The results of the research were presented in a seminar held at the FEB UB Auditorium on Friday (12/27/2024).

Head of Research Team, Abdul Ghofar, SE., M.Sc., DBA., Ak., explained that this research aims to explore the ideal partnership pattern between industrial areas and local communities. “Effective partnerships must be based on equality, transparency, and sustainability so that all parties feel fair benefits,” he said. A dialogic approach between companies, communities, and the government is a key strategy to address diverse interests.

Abdul Ghofar emphasized that downstreaming is a leading government program to increase the added value of products. “If we want to become an advanced industrial country, downstreaming must be carried out. However, this process is not easy and has risks, including negative impacts on society, such as environmental issues and community unpreparedness,” he explained.

Therefore, Ghofar emphasized the importance of partnerships between all related parties to minimize the negative impacts of downstreaming. The research was conducted in three areas: Gresik, Mempawah, and Batam, to find an effective partnership pattern.

The research team, Muhammad Irfan Islami, Se., M.S.E. added that although downstreaming increases product competitiveness, there is a gap in society. “In Mempawah, the majority of people are still farmers, while industry requires different skills,” he said. He emphasized the importance of connecting farmers with industry needs, for example in the supply of rice and eggs.

Dr. Hendi Subandi, SE., MA., Ak., CA., IIAP., another member of the research team, added that during the 3-4 months of research, they found that the involvement of community elements through partnerships could reduce the gap. “For downstreaming that is still in the planning stage, it is important to provide assistance that supports the community, such as business capital,” he said.

Hendi also suggested that companies that are already operating not only focus on social responsibility (CSR), but also on the supply chain. For example, the community can be involved in providing food for industry employees.

He underlined the importance of education and public awareness so that downstreaming can provide benefits. In addition, the involvement of non-governmental organizations (NGOs) in mentoring and education is also very necessary to support this process.

Furthermore, he emphasized the importance of education to increase public awareness so that downstreaming provides benefits. The involvement of non-governmental organizations (NGOs) in mentoring is also an important step to ensure that downstreaming runs well, and the community can participate actively. Thus, downstreaming is expected to provide a sustainable positive impact for all parties. (OKY/UB PR/ Trans. Iir).

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Foto Dias Satria, S.E., M.App.Ec., Ph.D., Assistant Professor Ilmu Ekonomi FEB UB