Strategy of the Investment and Licensing Services in Increasing

Investment in North Sumatra Province During the Covid-19

Pandemic

Siswati Saragi

and Nina Angelia

Program Study of Public Administrastion, Universitas Dharmawangsa,

Jl. Kol. Yos Sudarso No 224, Glugur Kota, Medan, Indonesia

Program Study of Public Administrastion, Universitas Medan Area, Jl. Setiabudi no 79, Tj Rejo, Medan, Indonesia

Keywords: Strategy, Investment, Investment and Licensing Service, Covid-19 Pandemic

Abstract: This research aim is because of investments sectors that could be used as one of the mainstays of indigenous

income, along with the Covid-19 pandemic, which has significantly affected the activities of life that affect

both the company and Micro, Small and Medium Enterprises (MSME), including One-Stop Integrated

Investment and Licensing Service Office. The study aims to identify strategies used by One-Stop Integrated

Investment and Licensing Service Office to increase investment in North Sumatra during the covid19

pandemic. The method of research used in this study is a descriptive qualitative study. Where data collection

techniques were used, were observation, interviews, and documentation. As for data sources, used in the study

are the primary and secondary data of the investment service. The result of this study is a strategy or effort

made by the united One-Stop Integrated Investment and Licensing Service Office of North Sumatra Province.

In One-Stop Integrated Investment and Licensing Service Office, the north Sumatran province's investment

in north Sumatra is by improving investment quality, implementing North Sumatra Invest (NSI), improving

investment quality by performing public service innovation, and improving the effectiveness of investment

opportunities.

1 INTRODUCTION

The world economy can be said to have experienced

globalization a few years ago. Where it is proven by

the free market has been carried out by several

countries in recent years. The implementation of

market freedom certainly has positive and negative

impacts. From the negative side, it can see as a

business activity that will experience a decline and

even suffer losses because the scale of competition

that occurs is no longer some party or parties from

that country, but from outside the country participates

as well. The entry of foreign capital into the

Indonesian economy is a demand from both the

economic and political conditions of Indonesia.

However, the state cannot also take advantage of

foreign capital or withdraw funds continuously

because international loans also have the interest to

be paid. Investment is known to have an important

role in the development of a region. This is due to

investment having become one of the reliable sectors

in improving Regional Original Income. The

investment will participate shape the daily activities

of the economy. Investment development in an area

is one indicator of the progress of economic growth

in the area. Investment is needed by the government

because all the needs of a country cannot always be

met only by relying on the government budget alone.

So it is very necessary private sector and external

parties to assist to meet the needs of the country.

Investment is a policy that has a fairly broad

economic impact, namely, it can create an increase in

the number of goods and services, value-added, new

business creation, use of labor and other economic

resources, increase in income of households and local

sources of income in the form of taxes and retribution.

Investment can also be said as one of the benchmarks

of a country to have a good, or low level of economic

growth, even bad. Each investment rate influences the

level of welfare of a country because the investment

will encourage the country to produce and fulfill the

need for state welfare.

138

Saragi, S. and Angelia, N.

Strategy of the Investment and Licensing Services in Increasing Investment in North Sumatra Province During the Covid-19 Pandemic.

DOI: 10.5220/0011560400003460

In Proceedings of the 4th International Conference on Social and Political Development (ICOSOP 2022) - Human Security and Agile Government, pages 138-143

ISBN: 978-989-758-618-7; ISSN: 2975-8300

 2023 by SCITEPRESS – Science and Technology Publications, Lda. Under CC license (CC BY-NC-ND 4.0)

However, in 2020 the world was hit by a disease

outbreak, namely the COVID-19 pandemic, which

could paralyze all aspects of the world economy. The

condition of the world that is being hit by the COVID-

19 pandemic is what is behind the research to see

from the economic side, precisely regarding the

investment that has taken place in North Sumatra

Province. As one of the large and well-known

provinces in Indonesia, North Sumatra's investment

climate remains conducive and attractive to domestic

and foreign investors even during the pandemic. This

is certainly inseparable from the government's role in

realizing investment policies and regulations,

providing services, and also facilitating business.

One-Stop Integrated Investment and Licensing

Service Office of North Sumatra Province in this case

has many tasks and functions related to investment

activities or policies. The main activities of the One-

Stop Integrated Investment and Licensing Service

Office are the activities of administering affairs in the

investment sector and administering licensing and

non-licensing in an integrated manner under one

door. Meanwhile, the supporting activities are

administrative, providing service facilities and

infrastructure as well as providing support for

equipment and personnel. All activities are carried

out both in the form of main activities and activities

that are included in several programs that will later

support the policies that have been set by the

organization.

2 LITERATURE REVIEW

2.1 Strategy

According to Glueck and Jauch (1989), strategy is a

combined, broad, and integrated plan that links the

company's strategic advantages with environmental

challenges, designed to ensure that the main

objectives of the company can be achieved through

proper implementation by the organization.

According to Thomson (in Oliver, 2007: 2)

strategy is a way to achieve a result. The final result

in this case concerns the goals and objectives of the

organization. There is a broad strategy for the whole

organization and a competitive strategy for each

activity.

According to Assauri, the function of strategy is

basically to make the strategies that are prepared can

be implemented effectively (2016). For this reason,

six functions must be carried out simultaneously,

namely: a. Communicating a purpose (vision) to be

achieved to others. b. Connecting or associating an

organization's strengths or advantages with

opportunities from its environment. c. Take

advantage of or exploit current successes and

successes, as well as investigate new opportunities.

Generate and generate more resources than currently

used. e. Coordinate and direct the activities or

activities of the organization going forward. f.

Responding and reacting to new situations

encountered all the time.

Types of strategies according to Hari Suminto

(2002:20) a) Price penetration strategies b) product

development strategy c) market development strategy

d) integration strategy e) diversification strategy

2.1.1 Pricing Goals

The purpose of pricing is as follows (Machfoedz,

2010: 67):

a. Achieving Maximum Profit

b. Promoting

c. Increasing Sells

d. Reaching the return on investment target

e. Increase competitiveness

f. Stability Price

g. Maintaining market share

h. Prestige

2.2 Investment

The investment comes from Latin, namely investire

(to wear). In the scope of its use, the term investment

is often used in business sector activities, while the

term investment is more widely used in legislation.

Based on Law No. 25 of 2007 concerning investment,

it is defined as all forms of investment activities, both

by Domestic Investors and Foreign Investors to

conduct business in the territory of the Republic of

Indonesia.

According to Kamaruddin Ahmad (Furthermore,

Manan, 2012:152-153), there are three reasons why

many people invest, namely

a. live a better life in the future.

b. Reducing inflationary pressures Inflation is a

condition that causes prices of goods and services to

rise due to the instability of a country's economy.

c. Encouragement for various countries' tax

savings.

2.3 Fundamental of Investment

Strategy

The strategic objectives of the One-Stop Integrated

Investment and Licensing Service Office are in line

with the strategy and direction of regional policies,

namely: sustainable inclusive economic growth

Strategy of the Investment and Licensing Services in Increasing Investment in North Sumatra Province During the Covid-19 Pandemic

139

through the development of agricultural management,

tourism, services and trade industries through

increasing the competitiveness of value-added

industrial products by doing, among other things: a)

Improve quality in investment planning b) Increase

investment that creates high added value, reduces

dependence on imports, and increases export c)

Improving the harmonization and synchronization of

policies and laws and regulations in the field of

investment and licensing d) Improving the efficiency

and effectiveness of investment promotion by

prioritizing regional competitiveness e) Increasing

investment cooperation by prioritizing national

interests f) Improving investment services and

licensing based on information technology

formulating and recommending facility policies and

intensive investment incentives g) Formulate and

recommend investment facilities and incentives

policies h) Improve coordination between the center

and the provinces, cities, provinces and districts, and

between sectoral agencies i) Increase the realization

of the investment.

2.4 One Stop Service

This integrated service system is essential to simplify

the service mechanism so that its benefits are truly felt

by the community. This means that this system is held

not only because of statutory regulations that require

it, but rather how far the integrated service system

produces services that are easier, cheaper, simpler,

faster, cheaper, and orderly in service administration.

The integrated service system is a unified service

management process for several types of services that

are carried out in an integrated manner in one place

both physically and virtually by service standards

(Hadi, 2019).

3 METHODS

This research is a type of descriptive qualitative

research. This study also uses field notes in the form

of observation notes and other sources. So it can be

concluded that descriptive qualitative research is a

research method that describes a phenomenon

through descriptions in the form of sentences and

language using a natural method. The location of this

research was carried out at the One-Stop Integrated

Investment and Licensing Service Office of North

Sumatra Province. The data collection techniques

carried out by the researchers were observation,

interviews, and documentation. The informants in

this research included key informants, main

informants, and additional informants. The analytical

method used is an interactive data analysis method

where qualitative research allows data analysis to be

carried out after the researcher is in place or returns

from a new field to be analyzed.

4 RESULT AND DISCUSSION

The Office of the One-Stop Integrated Investment and

Licensing Service of North Sumatra Province was

established based on the Regional Regulation of the

Province of North Sumatra No. 6 of 2016 concerning

the Establishment and Composition of Regional

Apparatuses of the Province of North Sumatra. The

North Sumatra Province One-Stop Integrated

Investment and Licensing Service is a merger of 2

(two) SKPD, namely the Investment and Promotion

Board (BPMP) of North Sumatra Province which was

established in 2008, and the Integrated Licensing

Service Agency (BPPT) of North Sumatra Province

which was established in 2010. Merger 2 (two) these

bodies are the mandate of PP number 18 of 2016

concerning regional apparatus.

4.1 Duties and Functions of One-Stop

Integrated Investment and

Licensing Service

One-Stop Integrated Investment and Licensing

Service, carries out the following functions:

a. Formulation of climate development policy,

promotion, service, implementation control,

investment data and information,

implementation of one-stop licensing by the

scope of work;

b. Implementation of climate development

policies,promotions,services,implementatio

n control, investment data and information,

implementation of one-stop licensing

following the scope of their duties;

c. Implementation of climate development

evaluation,promotion,service,implementati

on control, investment data and information,

implementation of one-stop licensing by the

scope of work;

d. Implementation of climate development

administration, promotion, service,

implementation control, investment data and

information, implementation of one-stop

licensing by the scope of duties;

ICOSOP 2022 - International Conference on Social and Political Development 4

140

e. Implementation of other tasks assigned by

the Governor related to its duties and

functions

4.2 Strategy of One-Stop Integrated

Investment and Licensing Service

Province of North Sumatra in

Increasing Investment in North

Sumatra Province During the

Covid-19 Pandemic

The following are the forms of strategies or efforts

carried out by the One-Stop Integrated Investment

and Licensing Service Office Province North

Sumatra to increase investment in North Sumatra

Province based on the indicators:

1. Improving the quality of investment planning.

The strategy carried out by the One-Stop

Integrated Investment and Licensing Service

Province of North Sumatra to improve the quality of

investment planning in North Sumatra Province is to

carry out activities to promote investment potential

and opportunities in North Sumatra Province. The

investment promotion strategy carried out by the

One-Stop Integrated Investment and Licensing

Service Office North Sumatra Province to increase

investment is to carry out promotional activities as

follows:

a. Create a digital business designing competition

b. Provide facilities for visits to leading investment

projects in North Sumatra Province with

Prospective Investors and Business Actors.

c. Conducting Business Gatherings and Business

Trips with Consuls of friendly countries and

Business Actors.

d. Updating the Investment and Investment

Potential and Opportunity Information System.

e. Conducting Public Consultation RUPM

DISPMMPTSP North Sumatra Province in

2019

f. Improving Facilities for the Realization of

Strategic Cooperation Between Large

Businesses and SMEs

g. Formulate Investment Policy for Infrastructure

Facility Development.

h. Conducting a Seminar on Cooperation and

Partnership between PMA and PMDN with

MSMEs throughout North Sumatra.

i. Conducting Business Meetings to Accelerate

Promotion of Regional Investment Potential.

j. Performing the Presentation and Utilization of

Licensing and Non-Licensing Data and

Information based on the Electronically

Integrated Business Licensing Service System.

2. Improving the Quality of Investment

Cooperation

The strategy carried out by the One-Stop

Integrated Investment and Licensing Service North

Sumatra Province to improve the quality of

investment cooperation is to implement the North

Sumatra Invest Cooperation (NSI). Through the

North Sumatra Invest (NSI) collaboration platform,

the North Sumatra Provincial Government held a

Dedicated Team Meeting (DTM) together with the

Bank Indonesia Representative Office (BI) of North

Sumatra Province to promote investment projects in

North Sumatra. A dedicated Team Meeting (DTM) is

a routine meeting held by the relevant OPD who are

members of North Sumatra Invest. This activity is a

forum for communication and collaboration across

agencies and sectors to find formulations and

strategies that are right on target to attract investors to

invest, as well as a facility to accelerate the

development of priority facilities and infrastructure in

the North Sumatra Province so that it can absorb labor

and improve the economics of North Sumatra

Province.

North Sumatra Invest (NSI) is a cross-agency

work team at the Provincial and Regency/City levels

in North Sumatra Province which has the aim of

increasing investment realization through

promotional activities in the context of improving the

economics of North Sumatra which was formed based

on the Decree of the Governor of Sumatra Number

188.44/167/ KPTS/2020 on North Sumatra

Investment.

The existence of a cooperation forum between the

Regional Government and Bank Indonesia is very

important to encourage the increased realization of

investment in the regions, in this case especially the

Province of North Sumatra. North Sumatra Invest

(NSI) will also participate in business matching

activities held virtually by Bank Indonesia in

collaboration with the Indonesian Embassy in Paris

and Relecom Partner Paris. Currently, North Sumatra

Invest (NSI) offers 7 investment projects in North

Sumatra Province, which are as follows:

a. SEI Mangkei SEZ,

b. Kuala Tanjung Industrial Estate,

c. Toba Lake,

d. sports center,

Strategy of the Investment and Licensing Services in Increasing Investment in North Sumatra Province During the Covid-19 Pandemic

141

e. Integrated Flats,

f. LRT Mebidang, and

g. Siantar-Parapat Railway

3. Improving the Quality of Investment Services.

The strategy carried out by the One-Stop

Integrated Investment and Licensing Service

Province Sumatra Utara to improve the quality of

investment services is to implement Public Service

Innovations. One-Stop Integrated Investment and

Licensing Service North Sumatra Province has

innovated by launching an online licensing

management system or better known as Online Single

Submission (OSS). In addition, the One-Stop

Integrated Investment and Licensing Service Office

North Sumatra Province has also launched an online

public service system from the One-Stop Integrated

Investment and Licensing Service official website

through an online licensing management system or

better known as SIAPLAYANI.

Previously, licensing services were managed

through a manual process, but now it is in line with

the conditions being hit by the COVID19 pandemic

and supported by information technology so that the

speed, accuracy, and also the capacity to complete all

permits are better and easier than before. This is by

Government Regulation no. 24 of 2018 concerning

Electronically Integrated Business Licensing

Services. The One-Stop Integrated Investment and

Licensing Service Office North Sumatra Province has

also innovated in providing licensing and investment

services on an online basis.

4. Increasing the Effectiveness of Investment

Promotion

The strategy carried out by the One-Stop

Integrated Investment and Licensing Service

Province North Sumatra to increase the effectiveness

of investment promotion in North Sumatra is to carry

out various promotional activities. Promotional

activities play an important role in providing

information about potential and investment

opportunities for investors or business actors.

Investors or business actors will not be able to find

out about the potential and investment opportunities

that exist without a publication or promotion process

that can provide information. The promotions carried

out by the One-Stop Integrated Investment and

Licensing Service are through the following methods:

a. Online Promotion

b. Appoint Promotional Agents Abroad.

c. Creating Promotional Materials through

various promotional media in Indonesian,

English, and Chinese.

d. Conducting SMS-based Investment

Promotion.

e. Publication of Investment Promotion in

North Sumatra Province through Electronic

Media.

f. Building a Regency/City Investment

Promotion Database Application in North

Sumatra

g. Promoting North Sumatra Investments at

AudioVisual Airport Facilities,

International Airports, and other strategic

places.

h. Conducting Online Investment Promotion

based on Mobile Applications

These strategies and efforts are specifically

carried out by the One-Stop Integrated Investment

and Licensing Service Province North SUMATRA

to increase investment in North Sumatra Province as

stated in the 2021 Rencana Kerja (RENJA) of the

Investment and Service Office North Sumatra

Province. It is hoped that in the future, the

implementation of these strategies or activities can

have an impact on increasing investment in North

Sumatra Province.

The strategy of One-Stop Integrated Investment

and Licensing Service Province of North Sumatra to

increase investment in the Province of North Sumatra

has carried out several strategies. The first strategy is

to improve the quality of investment planning such as

making a digital business design competition,

providing facilities for visits to superior investment

projects in North Sumatra Province, conducting

Business Gatherings and Business Forums abroad;

conducting Business Gatherings and Business Forum

with consuls of friendly countries and business actors;

Improve the quality of investment planning such

as making a digital business design competition,

providing facilities for visits to superior investment

projects in North Sumatra Province, conducting

Business Gatherings and Business Forums abroad;

conducting Business Gatherings and Business Forum

with consuls of friendly countries and business actors;

And the fourth strategy carried out by the One-

Stop Integrated Investment and Licensing Service of

North Sumatra Province is to increase the

effectiveness of investment promotions such as

ICOSOP 2022 - International Conference on Social and Political Development 4

142

conducting online promotions, appointing

promotional agents abroad, creating investment

promotion forums between regions, conducting SMS-

based investment promotions, conducting investment

promotions through electronic media. Build an

investment promotion database per regency/city in

North Sumatra Province, conduct investment

promotion in North Sumatra

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