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Archives of Business Research – Vol. 9, No. 6
Publication Date: June 25, 2021
DOI:10.14738/abr.96.10350. Pathmananathan, P. R., Aseh, K., & Kenny, K. (2021). An Overview of the Determinants That Escalates Cottage Industry. Archives of
Business Research, 9(6). 128-140.
Services for Science and Education – United Kingdom
An Overview of the Determinants That Escalates Cottage Industry
P. Ravindran Pathmananathan
Unies Group
Khairi Aseh
Unies Group
Kamal Kenny
Unies Group
ABSTRACT
In Malaysia, Cottage Industry is a major source of revenue for the villagers. It's
mostly small-scale operations that rely on local resources and conventional skills,
with low upfront costs and quick returns. However, due to a lack of new
technologies, infrastructure, and knowledge transfer, the industry might not be
thriving right now. The aim of this research is to evaluate the current roles,
challenges, and gaps in Perak's CI. This study was carried out via face-to-face
interview on 10 stakeholders from different agencies. This study shows a number
of factors affect a community's socioeconomic development and CI business.
Internal and external factors, such as interest and self-motivation, as well as the
positions of various organisations, as well as family and community support, all
contribute to this.
Keywords: Cottage Industry, position, challenges, gaps, socioeconomic
INTRODUCTION
The Rural and Industrial Growth Authority (RIDA) was established in 1951 with the mission of
providing comfort and improving the socio-economic status of rural communities through
infrastructure and Cottage Industry (CI) development. In order to stimulate interest in CI, RIDA
launched their mobile stores, which were an attempt to sell these products to the rural
community (Official portal, Ministry of Rural and Regional Development). In today's Malaysia,
the CI is a big source of income for the locals. For rural households, the revenue produced by
this industry is their primary source of income.(Mohd Redzuan and Fariborz, 2011).
The goal of this research is to evaluate the CI's current roles, challenges, and gaps in the state
of Perak. It is a key component in achieving the Malaysian government's community
development goals as part of the country's socioeconomic strategy. We must ensure that no
Malaysian is left behind as Malaysia intensifies its efforts to grow economically and become a
fully developed country by 2020, as described in the GTP Roadmap (2010). Microfinance
programmes, training, financing, and space allocation, among other things, are among the steps
proposed by the Malaysian government to meet this target (GTP: The Roadmap, 2010). The aim
of this research is to obtain accurate input from the target groups about their experiences
receiving government assistance and to identify any discrepancies that may exist.
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Pathmananathan, P. R., Aseh, K., & Kenny, K. (2021). An Overview of the Determinants That Escalates Cottage Industry. Archives of Business Research,
9(6). 128-140.
URL: http://dx.doi.org/10.14738/abr.96.10350
The final report will concentrate on discussions about the scope of finding demand differences
in the CI's socioeconomic background in Perak's local communities. It will look at the issues
that the communities in this study are dealing with, as well as the services and business
opportunities that are open to them. In a nutshell, the study will outline the multilateral
cooperation needed to advance the CI and improve the socioeconomic situation of Perak's rural
population.
The key objectives of the study are primarily:
1) To gain a sufficient understanding of the community's CI and social demography in
Perak.
2) To determine whether there are any appropriate and viable business and employment
opportunities in Perak that are related to the CI.
3) To determine the type of intervention and assistance that the CI in Perak requires.
4) Propose comprehensive preparation and coaching needs as part of the empowering
curriculum for various community target groups.
Significance of study
The researcher's goal in this study is to provide an overview of CI's position in Perak. The
industry may not be booming at the moment due to a lack of new technology, facilities, and
information transfer. As a consequence, these variables are regarded as critical in the
development of this industry in this study. With this in mind, it is fair to assume that this study
is important since it will aim to establish how technology transfer and information sharing can
be incorporated into the community intervention process. This is in line with the idea that
information sharing is strategically necessary because it helps them to gain a competitive
advantage while still allowing them to perform well (Information Resources Management
Association, 2012).
Cottage Industry in Malaysia
Cottage industries in Malaysia provide a major source of income for village residents. The
majority of a rural household's total income comes from income provided by industries (Mohd
Redzuan and Fariboz Aref, 2011). Villagers on Peninsular Malaysia's north-eastern coasts are
primarily responsible for handing down centuries-old customs and heritage to future
generations. Women in the local communities mainly make batiks, plant-woven handicrafts like
baskets and mats, wood carvings, and pottery. Food products such as fish crackers, belachan,
and regional pastries are also sold by many. Because of its home-based setting and flexibility in
terms of business operating hours, CI has piqued the interest of village women, especially
housewives.
Men, on the other hand, are permitted to work in this sector. Men in CI assist with more
physically challenging tasks such as constructing sampans (wooden boats), making furniture,
searching for forest plants or herbs, and fishing. It's impressive to see men working without
any technological plans and relying solely on skills passed down through the generations.
Cottage Industries in Perak
Perak, as the second-largest state in Peninsular Malaysia, has a lot to give in terms of CI. Perak
is known for its food, but it also has a plethora of natural products, both from the sea and on
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Archives of Business Research (ABR) Vol. 9, Issue 6, June-2021
Services for Science and Education – United Kingdom
land, that enable residents to engage in CI businesses. The following are some of the CI
contained in Perak:
Handicraft
Perak's traditional handicraft industry has a foothold in Kuala Kangsar. Some of the handicrafts
produced include labu sayong (earthenware), tekat benang emas (gold embroidery), bamboo
carvings, and seashell designs. Wood or coconut shells are used in other handicrafts produced
in the regionCI operators must acquire awareness and skills in order to promote and sell these
goods both locally and across Malaysia, despite the fact that they are beautiful and distinctive.
They should also be encouraged to make their handicrafts exclusive to Perak in order to attract
customers searching for Perak souvenirs or mementos.
Kacang Putih of Ipoh
"Kacang putih" was the locals' favourite snack before potato chips and fries. This food item was
brought to Malaysia by Indian migrant families, and it soon became everyone's favourite snack.
The “kacang putih” industry started in the late 1940s in the Ipoh foothills of Gunung Cheroh.
The term putih (white) was added to the name kacang after the steamed "kacang kuda" turned
white, according to the industry's founders. The Gunong Cheroh settlement was renamed
Kampung Kacang Putih as a result of the trade.
In addition to chickpeas, tourists to this village can now buy a range of crunchy deep-fried,
baked, and steamed Indian snacks such as murukku, pakoda, and omom. This small village now
has a thriving family-run CI that manufactures these delectable snacks and is a major supplier
to the rest of the world. Later, it was renamed Kampung Kacang Putih and moved to Teluk Kurin
B in Buntong, where it became a well-known kacang putih hub and one of the city's most
prominent tourist destinations.
According to Kacang Putih Traders Association Chairman A. Gunasegaran, the business now
employs about 50 families full-time. It is said that each family has its own collection of hidden
ingredients. In summary, the CI, which began as a door-to-door company, has experienced rapid
growth and is on the verge of even greater success (NST, 2013).
Seafood Items
Kuala Sepetang, a fishing village in Perak, acts as a CI centre. The catch of the day is either
packaged and sold individually or transformed into crackers, salted fish, dried seafood, and
other food items. These are sold and made available near this village for tourists who want to
go on boat rides to see eagles, see fireflies, or simply tour the place. This is part of Kuala
Sepetang's expanded operation. These fishermen pooled their funds to purchase boats and
offer such tourism services. The related CI operators see a boost in sales as a result of the
existence of such a tourist attraction. A positive effect on one area of the economy would have
a positive impact on another. Such links can be seen in Kuala Sepetang, a fishing village in
Malaysia.
Kuala Gula is another fishing village tucked away in Perak's northwestern corner. Few people
will consider it a food, adventure, or sight-seeing paradise. Tourists flock to this village to
sample toddy wine made from coconut trees and traditional roasted coffee, as well as observe
birds, as they do in Kuala Sepetang (The Star Online, 2014). Another example of how the other
industries in the region benefit CI is the sale of dried and salted seafood in this village. There is