CAPABILITY DEVELOPMENT OF MALANG REGENCY VILLAGE-OWNED ENTERPRISES (BUMDES)

One of the icon breakthroughs in the regional development paradigm in Indonesia that emphasizes growth, equity, balance and sustainability is village economic development through village-owned enterprises (BUMDes). As the launched of the BUMDes Program in 2014, as an implementation of Law No. 6 of 2014 concerning Villages, until the end of 2017, CAPABILITY DEVELOPMENT OF MALANG REGENCY VILLAGE-OWNED ENTERPRISES (BUMDES)


INTRODUCTION
One of the icon breakthroughs in the regional development paradigm in Indonesia that emphasizes growth, equity, balance and sustainability is village economic development through village-owned enterprises (BUMDes) The types of businesses of BUMDes include social business, finance, rental business, broking, trading, joint ventures and contractors (Berdesa,2018).
On the other hand, these results are still inefficient while BUMDes are achieving sustainability, so this circumstances tend to impact unoptimal targets for contributing and stimulating of village development where BUMDes were formed. Several factors hinder to BUMDes so that some of BUMDes are inefficient. One of the causes of the symptoms of inefficiency, is a lack of human resources capability that could have not been in accordance with the demands of BUMDes management competence. Therefore, the Ministry of Villages conducted Village Academy 4.0 training and the Village Innovation Exchange as a medium for sharing information (Kemendesa, 2018). In addition, there are also obstacles to the formation and management of BUMDes, including (a) ignorance of the BUMDes program, (b) there were initiatives to establish BUMDes but the stakeholder didn't realise and understand its importance, (c) the establishment of BUMDes is just a plain program. (Reza,2018 going to be urgent to establish and strengthen their networks, as stated Indonesia Constitution No. 23/2014 concerning Regional Government, that BUMDes capital is to be the responsibility of each village. The role of the Malang Regency government in a regional policy to assist and strengthen the BUMDes capacity for protecting the efforts of the village community (Fajarwati,2018). The economic growth Malang Regency, East Java Province was contributed by 42 trillion rupiahs of the SME's sector to from the Malang Regency GRDP ( 85 trillion rupiahs) (Malangtimes, 2018). Therefore, inefficient BUMDes in Malang could have been hinders for the potential of development SME's collaborative networks, so does other stakeholders collaborative networking with, so this could contribute to unoptimalize village economic growth, independence and prosperity of the community. This article brought up an issue about capacity development of BUMDes in Malang Regency conducted to phenomena above. This article is based on the findings of research on BUMDes in Malang Regency using qualitative research methods.

Literature Review
Capability development conduct to meaning of the capacity. Ubels and Fowler,(2010:18), stated that capacity is about the ability to do something and being built on five core capabilities, that is the capability to act, the capability to generate development results, the capability to relate, the capability to adapt and the capability to integrate. So, capacity is an uncertain results of interaction between elements in one and as capabilities in the other. In other words, capacity is an 'emergent' property based on the combination of a number of elements (Ubels and Fowler,2010:13). In other domain, as a form combinations of number of elements, the capacity as capability dynamic development, Lee (2108:352-353), in other aspect about dynamic capability stated that the international experienced-manager can help subordinats develop the comprehensive cognitive templates needed for governance behaviors in new settings; enhanced work skills and knowledge are associated with the development of the aspect of knowing-how and sense of meaning of knowingwhy. Various social networks played a key role in connecting the environmental and organizational domains for diminishing of the conflict and waste, strengthen efficiency, and acquire key resources to perform and compete in the marketplace, so the development of DCs must be a process by which managers seize, integrate, and reconfigure organizational resources and competencies and must be through coordinated cooperation. Knowing-why becomes key to enhancing DC competenc, so the role of knowing-how and knowing-why) in enabling DC development. Even, in developing countries, capacity development is the process by which individuals, organisations, institutions and societies develop abilities (individually and collectively) to perform functions, solve problems and set and achieve objectives (UNDP,1997:3).
Capacity as dynamic capability, tend more in strategic ways, as Li andLiu (2014:2794) define dynamic capability as the firms' potential to systematically solve problems, formed by its propensity to sense opportunities and threats, to make timely decisions, and to implement strategic decisions and changes efficiently to ensure the right direction. In empirical findings based on the China context revealed that dynamic capabilities also have a significant impact on firms in emerging economies, managers should confidently invest into the development of dynamic capabilities accordance with environmental changes, avoiding core rigidities and capability traps (Li and Liu,2014:2797-2798.
Capability development, can be stimulated by capability development can be driven by endogenous and exogenous organizational factors. The endogenous factor relates with elements of structure organization, meanwhile, exogenous factors conduct with external environmental factors. Environmental collaborative network is one of the external environmental factors.
Collaborative governance has many facets meanings in complex phenomena as Wanna (2008:3-4) said, that, collaboration (a) could involve cooperation to build commonality, improve consistency and align activities between actors; (b) can be the process of negotiation, involving a preparedness to compromise and make trade-offs; (c) can involve oversight roles, checking, pulling together and central coordination; (d) can involve power and coercion, the ability to force outcomes or impose one's own preferences on another, to some extent, with their compliance or involvement; (e) can involve future commitments and intentions, prospective behaviour, planning or preparation to align activities; (f) can involve engagement, the development of internal motivations and personal commitment to projects, decisions, organisational goals or strategic objectives. So, capability development tend to enable the organizational resources, reconfigure them and competencies through coordinated collaborative in strategic ways.
Organizational capability is the ability of a firm to perform a coordinated task, utilizing organizational resources, for the purpose of achieving a particular end result (O` Regan and Ghobadian, 2004). According to Teece, (2018: 364-365), there are 3 (three) basic elements in a higher level of dynamic capabilities, namely scanning (sensing), responsiveness to environmental change (seizing) and changing (transforming). Sensing means the recognition of market and technological opportunities and the mobilization of requisite resources so sensing is very much a scanning, creation, learning and interpretation activity (Teece, 2009). Next, seizing means the organizational strategy and infrastructure for making appropriate decisions, absorbing, integrating resources to create and capture value from opportunities which these activities almost always requires investments in development and commercialization activity (Teece, 2009). Transforming means the ability of organization to change according to new conditions or capabilities that are responsible for both, maintaining elements in the organizational system as well as the strategy, so that associated with significant changes in organizational design or conflict with the form of existing business models (Teece, 2018: 364). Inan and Bititchi (2015:314-315), stated that the successful review and calibration technology and market opportunities, the prudent selection of technology and product attributes that are challenging, design business models, and commit resources to investment opportunities that can be achieved in the company's growth and profitability. Profitable growth tend to lead to the augmentation of enterprise-level resources and assets (Teece, 2009).

Development
of organizational capabilities documented in literature for large enterprises, conducted to strategic management system, service innovation, new development product and marketing product (Dixon,et al.,(2014), Kim,et al.,(2015), Piening (2015), Janssens,et al.,(2015, Teece (2018), Wu (2016), Darawong (2018), Cao (2019). Only a few documented literature of micro enterprises as BUMDes. Research of Inan and Bititci (2015) revealed that micro enterprises dynamic capability has difference characteristics with the large one. Micro companies are much closer to their customer and their innovation activities based on customer needs, produce innovative products for customer needs. So, Inan and Bititci (2015:316), stated there is an innovation and product development capability rather than innovation capability in micro enterprises.
For knowing capability development of BUMDEs, used framework thinking of reconstruct 5 core capabilities built on capacity (Ubels and Fowler,2010), i.e to act, to generate development results, to relate, to adapt and to integrate and elements of dynamic capability development (Teece,2018), i.e sensing, seizing, and transforming, as below (  (2) village socialization, (3) identification of village economic institutions, (4) working group meetings, (5) deliberations on establishing BUMDes, (6) consolidation of BUMDes organizational structure, (7) statute of BUMDes (8) BUMDes administrative and financial preparation. For this path, DPMT are assisted by expertises to develop BUMDes. DPMT has the function of carrying out public services, particularly in its establishment, facilitating the establishment of BUMDes, start from the formulation of village regulations, statutes, to the decision letter of the Village Chief to provide BUMDes.
Problems identified often arise in the capabilities development of Malang Regency BUMDes were, first, socialization and communication program factors have could not obtained the optimum level yet (these problem arised and faced of many BUMDes newcomers which established the institution without follow the order and without through the stages that have been determined and directed by Malang Regency DPMT according to related policies and regulations). Of the total 203 BUMDes recorded in DPMT coaching, there are BUMDes has been receiveing assistancy and some BUMDes established independently without following the development stages so that they are in less developed or stagnant positions, e.g Sumber Pucung BUMDes and Jati Guwi BUMDes. Second, lack of human resources who able of BUMDes management. Some of BUMDes are managed by BUMDes'human resources whose education and expertise are not directly related or not appropriate with the needs of professional BUMDes management as micro enterprises, e.g Jati Guwi BUMDes. Third, in BUMDes operational tends too depend on the leadership of the Village Chief. The mindset of the former Village Chief encouraged the development of BUMDes, but the elected Village Chief, then, did not have the same thoughts and courage, e.g. BUMDes Mendosari, and slightly tend in BUMDes Ketawang case. The fourth problem was about the partnership too depends on the sponsor's intention. Some of Malang Regency BUMDes tend to become an extension of the business of the sponsor or the private sector that support financially and technically, especially when related to banks sponsorship, although behalf on sponsorship corporate social responsibility,e.g BUMDes Ketawang (Tawang Gross for various bank payment point), BUMDes Sanankerto (for Boon Pring -the bamboo arboretum eco-tourism, BUMDes Putukrejo (Sumber Sira eco tourism, various bank payment point, savings and loan business), etc.
So, those research findings revealed that the related BUMDes has business to do with microfinance services, e.g payment various household bills, taxes, credit applications etc.
Some of capability dynamic development literature, i.e Teece, et al., (1997), Dixon,et al.,(2014), Inan and Bititchi (2015), Kim,et al.,(2015), Piening (2015), Janssens,et al.,(2015, Teece (2018), Wu (2016), Darawong (2018), Teece (2018) and Cao (2019), generally pointed that dynamic capability development consists of sensing, seizing and transformation processes. In the sensing process, the development of BUMDes capabilities depends on the willingness and capability of BUMDes actors and related government parties, especially DPMT and the Ministry of Village, Development of Disadvantaged Regions and Transmigration of Indonesia. At the BUMDes capability development stage, the sensing efforts undertaken by BUMDes are BUMDes actors observing the needs and opportunities, technological needs and allocation of resources needed by BUMDes. Therefore, the process of learning to recognize and form new market opportunities, is done by scanning, creating, learning activities and interpretation (Teece, 2009). The study revealed that almost Malang Regency's BUMDes already conducted sensing activities in determining the direction and form of business. Some of Malang Regency's BUMDes have chosen non-tourism business, because their village have no natural tourism potential dan depended on socio-economic and cultural of local community, e.g BUMDes Ketawang (Tawang Gross), BUMDes Gedog Wetan (village market), BUMDes Jati Guwi (waste management, making organic fertilizer). So, for villages that have tourism potential, developed for tourism-based businesses, such as educational tourism, water sources, water tourism, e.g BUMDes Sanan Kerto (Boon Pring tourism), BUMDes Putuk Rejo (water tourism and natural water sources Sumber Sira), and others.  Zhao, et al., (2013). Those researchs revealed that the capability of innovation in the local area depends on the network and the strength of the relationship between innovators and technological innovations, where it requires a lot of resources and high risk, so that innovators tend to work very closely with each other, based on a strong level of trust. This is executed in regional innovation system institutions, universities, scientific research institutions, companies, governments, and intermediary institutions, that those institutions often have coordination with others. In China, the main activities and sources of innovation from regional innovation systems include research activities, infrastructure, human resources expertise (innovators), capital, and others. The role of universities as the main actors in regional innovation in China is done through innovation activities and entrepreneurial groups. The contribution of tertiary institutions in China is to provide labor qualifications, research with local characteristics, appropriate services, and technology for the relevant regional stakeholders.

Capability development of Malang
Regency's BUMDes is carried out mainly by Malang Regency Government-Village and Community Empowerment Agency in technical and functional collaboration with Ministry of Village, Development of Disadvantaged Regions and Transmigration of Indonesia Republic. Problems of the capabilities development of Malang Regency BUMDes were, on inconsistency of management system and policy path, which related with human resources capability and applicable policy. Hence, the solution depends on the willingness and dynamic capability (sensing, seizing, transforming) upgrading of BUMDes actors, regional instruments and clear and applicable national policies, and collaboration required in all stages of the BUMDes development system. Practical implications, to increase the effectiveness of Malang Regency BUMDes capability development, it is necessary to consider providing regular clinics with consultants at the District Office. To improve the efficiency of Malang Regency BUMDes capability development, it is necessary to disseminate a package of practical tools guidanceand management training per District, in addition to Malang Regency Government-Village and Community Empowerment Agency BUMDes Coaching and Clinic.