Industrial Agglomeration Analysis for Local Economic Growth (Case Study Medium-Large Industries at North Sumatera)

Abstract

The ideas for creating share value have been shown to improve economic performance. In this study, we aim to map the Location Quotients of Medium-Large Industries (IBS) agglomeration in North Sumatra and show how industrial agglomeration affects local economic growth and company performance. In this study, we use Location Quotients (LQ) index to measure the agglomeration of Medium-Large Industries (IBS) by district or city. The measurements were carried out in 34 regencies and cities in North Sumatra between 2017 and 2019. The results show that IBS agglomeration increased by 20.59% in 2017 and a steady increase by 23.53% in 2018 to 2019. The added value of this study is the expansion of the dominant logic co-creation concept, with the principle of industrial agglomeration able to assist companies in achieving sustainability and competitive advantage by promoting the creation of shared value, ranging from planning corporate resources to meeting the economic value for all stakeholders.