one village one product (ovop) plan for b40 · are including giving prospect to the product...
TRANSCRIPT
I
One Village One Product (OVOP) Plan for B40
Towards Inclusive and Sustainable Rural Development
Khairul Hisyam Kamarudin
II
Published by:
Razak School of UTM of Engineering and Advanced Technology
Universiti Teknologi Malaysia Kuala Lumpur
Jalan Semarak, 54100 Kuala Lumpur
Malaysia
Tel: (6)03-2180 5138 l Fax: (6)03-2180 5380
Email: [email protected]
ISBN 978-967-15384-5-6
Printed in Malaysia
First Print 2018
Perpustakaan Negara Malaysia
One Village One Product (OVOP) Plan for B40: Towards inclusive and sustainable rural development
Copyright © Razak School of UTM, Kuala Lumpur
All rights reserved.
No parts of this publication may be reproduced, stored in retrieval system, or transmitted in any form
or by any means, electronic, mechanical, photocopying, recording, or otherwise, without the written
permission of the publisher
III
One Village One Product (OVOP) Plan for B40
“Towards inclusive and sustainable rural development”
Dr. Khairul Hisyam Kamarudin
UTM Razak School of Engineering and Advanced Technology
UTM Kuala Lumpur Campus
Email: [email protected]
UTM Razak School of Engineering and Advanced Technology
UTM Kuala Lumpur Campus
February 2018
IV
Contents
List of Tables
List of Figures
Acknowledgement
Abstract
V
V
VI
VII
1.0 Introduction
1.1 “Inclusiveness” as a main focus for development of B40 group
1.2 Research questions
1.3 Goal and objectives
1.4 Scope and limitation
1.5 Methodology
1.6 Organisation of chapters
1
2
2
3
4
6
2.0 One Village One Product (OVOP)
2.1 What is OVOP?
2.2 OVOP in different country and geographical context
2.3 Previous studies on OVOP
2.4 Three main principles of OVOP
2.5 Issues and challenges in OVOP
2.6 OVOP movement in Malaysia
2.7 OVOP and plan for B40: Reflection of the 11th Malaysia Plan
7
7
9
11
16
19
23
3.0 Data Analysis and Discussion of Results
3.1 Introduction
3.2 Profile of respondent
3.3 Current OVOP business ecosystem and process
3.4 Key motivational factors for involvement in OVOP Business
3.5 Main and influential reasons for venturing into OVOP (Labu Sayong
potteries) business
3.6 Main challenges of OVOP (pottery) business
3.7 SWOT analysis and synthesis
25
25
28
33
36
40
44
4.0 The Way Forward
4.1 Summary of key findings
4.2 Recommendation – proposed OVOP framework for B40 households
4.3 Conclusion and future work
46
47
48
References
50
Index 51
Appendices
53-79
V
List of Tables
Table 1.1:
Table 2.1:
Table 2.2:
Table 2.3:
Table 2.4:
Table 2.5:
Table 2.6:
Table 2.7:
Table 2.8:
Table 3.1:
Table 3.2:
Table 4.1:
Description of research methodology
Comparative features of three OVOP movements
Three main types of study relating to OVOP movement
Description of OVOP principles – “Local but global”
Description of OVOP principles – “Self-reliance and creativity”
Description of OVOP principles – “Human resource development”
Summary of main issues and challenges of OVOP based on review of
literature
Major issues and challenges in adopting OVOP plan
Main objectives of One District One Industry
Basic profile of respondent/ OVOP operators
Profile of OVOP business
Summary of study’s key findings
4
8
9
12
13
14
16
17
20
25
26
46
List of Figures
Figure 1.1:
Figure 2.1:
Figure 2.2:
Figure 2.3:
Figure 2.4:
Figure 2.5:
Figure 3.1:
Figure 3.2:
Figure 3.3:
Figure 3.4:
Figure 3.5:
Figure 4.1:
Organisation of chapters
Expanding OVOP and sample of symbol logo
Brief history of OVOP movement in Malaysia
Strategies adopted by government for ODOI development
Uplifting the B40 households’ livelihood as mentioned in the Eleventh
Malaysia Plan (2016-2020)
Summary of focus areas of the Eleventh Malaysia Plan (2016-2020)
Current OVOP (Labu Sayong) business ecosystem as observed in
Kuala Kangsar
Key motivational factors for involvement in OVOP business
Main reasons for venturing into OVOP (Labu Sayong potteries)
business
Flowchart – process/stages in Labu Sayong production in Kuala
Kangsar
Main challenges facing by OVOP (Labu Sayong business) operators
in Kuala Kangsar
Framework considerations for OVOP business (Labu Sayong) in
Kuala Kangsar
6
8
20
21
23
24
31
33
36
39
43
48
VI
Acknowledgement
In many ways, this book represented efforts and thoughts, which were contributed by many
people and they deserve our deepest thanks and appreciation. First and foremost, I wish to
express my sincere appreciation and gratitude to Universiti Teknologi Malaysia (UTM) for
funding this research under the UTM Encouragement Grant (PY/2015/04663).
I also would like to thank the team members particularly to Assoc. Prof. Dr. Hamid Saad and
Siti Aisyah Abd Wahid for their assistance and valuable inputs given in every stages of the
research. Not to forget my deepest appreciation goes to all respondents (OVOP entrepreneurs
and the B40 craftsman) that have been participated in this research including Win Craft, Xtream
Craf and Sahizul Sayong. Thank you for the valuable inputs and feedbacks during the field
survey.
I also would like to thank my colleague in Universiti Teknologi Malaysia, particularly
Professor Dr. Ibrahim Ngah and Siti Nurhuda for his encouragement and support towards the
completion of this research and publication of this book.
Dr. Khairul Hisyam Kamarudin
Kuala Lumpur
February 2018
VII
Abstract
In recent years, there has been renewed interest in developing rural areas. The reasons for this
interest lie in the profound changes that are affecting the countryside and rural societies. In
particular, de-population issue which resulted from out-migration of workers from rural areas and
limited job opportunity in rural economic sectors including farming and forest-related activities
since employers becoming more economical to hire foreign workers/labours. These phenomenon
urged government and/or non-governmental agencies/investors to seek out alternatives in
developing its countryside and rural communities. One of the main strategies of this search was to
identify ways of encouraging the diversification of rural economic activities. Rural economic
diversification process has brought with it an interest in rural entrepreneurship agenda as a tool to
revitalize the countryside and rural communities in sustainable ways. In the early 1990s, the
spreading agenda on revitalizing countryside and rural communities in developed country
particularly in Japan through OVOP agenda has caught the attention of top decision-makers,
politicians and development planners in Malaysia. This research is being carried out to analyse the
potential of One Village One Product (OVOP) business in rural area as an inclusive local
development tool to local entrepreneurial development as well as to the uplifting the livelihood of
households in the bottom 40% of income (B40) group as addressed in the 11th Malaysia Plan
(2016-2020). Results from the analysis indicated that OVOP program has created new jobs and
new source of income for the local people including those who are considered as the B40
households (as craftsman). Furthermore, the OVOP program (Labu Sayong/pottery production) has
encouraged innovation through usage of technologies (ICT) for promotion and marketing, and
modern approach including the use of moulds to increase productivity, rapid execution, hence to
increase capability of business in fulfilling big customer’s order of craft products. The research has
also identified some issues or challenges in OVOP program namely (1) difficulty to maintain
skilled and trained workers or craftsman because some of them might quit their job to start up own
business and become new competitor; (2) increase competition in the market for souvenir products;
(3) challenge in ensuring current operation capable to meet orders from customers and; (4) dilemma
for integrating modern and traditional approach in Labu Sayong business (fulfilling customers’
order and maintaining the authenticity of the process). On the other hands, government agency,
particularly Kraftangan Malaysia (KM) played prominent role in nurturing entrepreneurial spirits
among local OVOP operators in Kuala Kangsar. Among program that has been carried out by KM
are including giving prospect to the product (invitation to Labu Sayong operators to be involved in
exhibition and showcasing of their products), and providing development grants (including the
supply of tools, machines and moulds) as well giving training on mould making and decoration of
Labu Sayong. As a conclusion, the One Village One Product (OVOP) program offered a huge
potential to be mulled as an inclusive local development strategy for the B40 group, if the planning
and executing of the plan be carried out with proper understanding on the local needs, context and
readiness of the local people/entrepreneurs.
1
CHAPTER 1 INTRODUCTION
1.1 “INCLUSIVENESS” AS A MAIN FOCUS OF DEVELOPMENT STRATEGY
FOR B40 GROUP
One of the key focus area as highlighted in the Malaysia Human Development Report
2014 is an urgent need to the government to tackle the issue of Bottom 40 percent (or termed
as B40 that is bottom 40% earned low income) through inclusive development approach
(Kamal Salih et al., 2015). The need for addressing the issue of B40 has been further mentioned
during the presentation of 11th Malaysia Plan (11MP) (2016-2020) by the Honourable Prime
Minister on May 20th 2015. The element of inclusiveness has been ranked first among six
focus areas of 11MP.
Based on 11MP report, inclusive development strategy will directly address the need of B40
group as there are currently 2.7 million household in Malaysia identified as B40 in year 2014
(EPU, 2015). This is the group which according to the Economic Planning Unit (EPU),
vulnerable to issues of social exclusion, barriers to social mobility and economic insecurity in
development plans. Furthermore, the government has set a target for income improvement for
B40 from RM2500/month in 2014 to more than RM5000/month by 2020 (EPU, 2015). Under
the same period, the Gini index is targeted to decrease from 0.401 in 2014 to 0.385 (by 2020)
(EPU, 2015).
As a response to these targets, current and continuous initiatives for overcoming issue of rising
cost of living and to promote social justice were introduced by government under Government
Transformation Program (GTP) such as 1Malaysia Clinic, 1Malaysia People Menu, 1Malaysia
People Shop, 1Malaysia Textile Shop and 1Malaysia People Agro bazaar Shop will be
maintained and more facilities/services are to be developed in other areas during the 11MP
period (PEMANDU, 2013; EPU, 2015). Apart from provision of necessary infrastructure and
services, strategy for rising the household income for B40 will be improved through education
and training programs aiming at producing high skill workers. As for those who are keen to
start their own businesses, the entrepreneurship support program will be provided to support
micro and small businesses (EPU, 2015).With an intensive focus to be given towards
diversification of rural economic activities hence to improve socio-economic and well-being
“The (OVOP) program is seen as being able to raise the income of villagers or the
Bottom 40 group, as implemented in Korea, Japan and Thailand”
(The Sun newspaper: 10/6/2015, p.16).
2
of B40 group under GTP and 11MP, it is becoming more crucial for a specific study to be
planned and conducted to examine the potential application of One Village One Product
(OVOP) program as one of rural development strategy for B40 group. The effort of extending
OVOP program for B40 group has been highlighted in government’s recent development
agenda (refer to caption).
1.2 RESEARCH QUESTIONS
1. What is One Village One Product (OVOP) program and to what extent and in what
form has OVOP been implemented in the study areas and other relevant cases
especially by the non-B40 group?
2. What are the qualitative methods that may be used to identify and to analyse the
B40 status of involvement in OVOP business and/or OVOP-related business?
3. What types of One Village One Product (OVOP) projects/products are appropriate
and inclusive for B40 group in the study areas?
4. What approaches can be used to promote a more inclusive and sustainable
development of OVOP business with focus on B40 group in the study area?
1.3 GOAL AND OBJECTIVES
The main goal of this research is to analyse the potential of One Village One Product
(OVOP) business in rural area as an inclusive local development tool to local entrepreneurial
development as well as to the uplifting the livelihood of households in the bottom 40% of
income (B40) group as addressed in the 11th Malaysia Plan (2016-2020). The usage of OVOP
as local development approach has been developed, implemented and showing signs of success
elsewhere, for example in Japan (Claymome, 2011; Igusa, 2010), in Thailand (Claymome,
2011 & 2007; Fujioka, 2006), in Sub-Saharan Africa (Kurokawa et al., 2010), the Philippines
(Cutaran, 2008) which may have value in Malaysia where the Ministry of Rural and Regional
Development (MRRD), Ministry of Finance (MoF), among other agencies (including
Kraftangan Malaysia), may find value in such program to realise their goals of developing rural
societies in a more inclusive and sustainable manner.
3
1.4 SCOPE AND LIMITATIONS
This research is focused on the investigation and evaluation of current OVOP practices
among OVOP operators and B40 (craftsman) by selected study case and the extent to which
the OVOP concept and project is understood and considered by respondents to be an inclusive
and sustainable rural development strategy.
In general, the scope of the research encompassed four basic areas:
i. The elucidation of the concept of OVOP through review of relevant literature: This
includes evaluating critical arguments on the principal forms of OVOP, its components
and characteristics, to determine current issues and the progress of implementation of
the agenda of OVOP, especially in rural setting and their communities/stakeholders.
The literature review has enabled the researcher to formulate a “long list” of factors
which influence the motivation of rural entrepreneurs to be adopted OVOP business
model in Malaysia and in other countries and to identify issues related with
implementation of OVOP program. The list shall be included into questionnaire design
that be used during field study and data collection stage (questionnaire-guided
interview).
ii. Conducting survey of local OVOP operators and craftsman (B40) to obtain data
and information: The field study (interview) of local OVOP operators and B40 group
is conducted based on a set of questionnaire specifically designed for determining the
nature of OVOP and to identify challenges and motivational factors for participation in
OVOP program. However, it is worth mentioned that the role of questionnaire is merely
a guidance during the interview with respondents. During the survey and interviews,
respondents were invited to discuss pertinent issues and challenges of OVOP and
potentials of OVOP for inclusive rural development.
iii. Conducting data analysis: Data analysis stage should examine local OVOP operators
and their stakeholders’ perceptions of the concept of OVOP and nature of OVOP
program that they have participated with. A qualitative data analysis technique shall be
adopted (narrative approach) to explain and describe respondents feedbacks during the
interview process. In addition, inputs from observation and photos were also used as
supporting information.
4
1.5 METHODOLOGY
This research adopted a qualitative approach for data capture and analysis, the use of
single case study (yet will allow for a more in-depth and detail analysis and discussions), survey
of local OVOP operators and the B40 craftsman, limited field observation and photography.
The adoption of all these methods can be best explained in three stages namely: (1) Preliminary
study and site visit; (2) Field study and data collection, and; (3) Data analysis and synthesis.
Details for each stage of field study and data collection are as follows:
Table 1.1: Description of research methodology
Stage Scope Description Methodology
1) Preliminary
site visits
Identify
elements of
OVOP and
characteristics
of OVOP
operators and
the B40
craftsman
Preliminary
visit to selected
study areas
Pilot study
Information gathered will be
used to formulate the draft
of survey questionnaire
Meeting with head of
village/owner of enterprises
and local informants
To establish good rapport
with community and local
leaders
To gather basic profile of
business
Review of literature (books,
journals and reports)
Meeting with village leader and
local committee of each village
Village tour and record of basic
profile (to identify B40 and
OVOP/enterprises)
Briefing session and discussion
with local committee regarding
the research project
Taking photos
Questionnaire-guided-interview
(household survey)
Survey questionnaires will be
disseminated during preliminary
site visit
2) Field study
and data
collection
Field study and
data collection
Survey of OVOP operators
and B40 craftsman
(identified during pilot
study/document review):
Profile of
respondent
Respondents’ key
motivational factors
Influential reasons
for respondents to
venture into OVOP
Respondents’ main
issues/challenges in
OVOP
Dissemination of Questionnaire
(for operators/craftsman survey):
owner of enterprises and
B40 group (craftsman)
Survey to be conducted in
OVOP workshop / souvenir
shops
Take photos of
workshop/souvenir shop
condition and economic
activities of operators and B40
Informal interview with local
informants, head of the village,
5
committee and local
entrepreneurs
Meeting with B40 group and
local representatives
3) Data
analysis
Synthesis and
findings
Production of reports
Propose conceptual
framework for OVOP
development at the study
area according to local
resources and capabilities
SWOT analysis
Descriptive analysis
(quantitative)
Source: Author (2016)
Questionnaire-guided-interview with Mdm
Amy, the Co-Owner of Xtream Craft.
Source: Research fieldwork in 2016
Questionnaire-guided-interview with Mr.
Win, Owner of Win Craft.
Source: Research fieldwork in 2016
Questionnaire-guided-interview with Mdm
Rahaya, the Co-Owner of Shahizul Craft.
Source: Research fieldwork in 2016
6
1.6 ORGANISATION OF CHAPTERS
Figure 1.1 below outlines the structure of the research
Figure 1.1: Organisation of chapters
Source: Author (2016)
Chapter 1:
Introduction Issue(s):
1. Issues of “inclusiveness” and
vulnerability among Bottom 40 percent
of households (B40) in rural Malaysia
2. Issues of participation of B40s in rural
economic development
3. Issues of suitable economic model for
B40 group
Potential of OVOP:
“The (OVOP) program is seen as
being able to raise the income of
villagers or the Bottom 40 group,
as implemented in Korea, Japan
and Thailand” (The Sun
newspaper: 10/6/2015, p.16).
Formulation of Goal, Objectives, Scope of
Study, Contribution of study and Research
Organisation
Chapter 2:
Literature Review
Review of the Concept of One Village One Product (OVOP)
What is OVOP – OVOP practices in different countries
Main principles of OVOP
Issues and challenges in adopting OVOP
OVOP movement in Malaysia and plan for B40
Research design
Data collection methods
Data analysis methods
Research Methodology
Formulation of research
questionnaires and
interview questions
Identify potential
cases
Profile of respondents, current OVOP business ecosystem,
key motivational factors, main issues and challenges of
OVOP
Field Study & Survey
Chapter 3:
Data Analysis
Data Analysis, Results and Discussions
Application of OVOP Concept by Local Enterprises
o Motivation of starting up business
o Reasons for choices of business
o Issues and challenges faced
o Entrepreneurial learning experience
Current OVOP business ecosystem – important role of “contract system”
Potential Adoption of OVOP Plan for B40
Chapter 4:
The Way
Forward
Conclusion and the Way Forward
The way forward: Proposal of OVOP business model for inclusive rural development in
Malaysia which integrate three main principles of OVOP original model from Oita (Japan)
and four key success factors in developing and managing local economic development
among rural community
7
CHAPTER 2 ONE VILLAGE ONE PRODUCT (OVOP)
2.1 WHAT IS OVOP?
“One village one product” is a simple and easy terminology used to send a clear
message on local development initiative even to the non-educated local residents. The term
itself represent a straight forward local development approach whereby one community creates
one marketable product by utilizing potential resources of the region, with identical brand, by
using own/local resources and brush up the product, upgrade the value, establish the own brand,
and merchandise in the global markets (Igusa, 2010).
The One Village One Product (OVOP) concept is originated from the Oita Prefecture in Japan
in 1979 (Claymome, 2011; Fujioka, 2006). Under OVOP movement or program, every small
local community (usually at village level) aims at developing a distinctive and identical product
through positive idea and innovative attitude and by utilising local resources to the fullest
extent possible. The product will then be produced according to a set of acceptable standards
in order to satisfy both domestic and international markets. As a result, the movement is
expecting to contribute to local economic development of a community through improvement
of income generation among its population (Claymome, 2011; Igusa, 2010).
2.2 OVOP IN DIFFERENT COUNTRY AND GEOGRAPHICAL CONTEXT
It is difficult to mention the exact number of countries which rectifying and adopting
OVOP concept. To some extent, some countries have proposed their own OVOP-like concept
as an extension or modification to the original OVOP model to fit into local needs and contexts.
Researcher such as Igusa (2010) had suggested that OVOP concept (original model and/or its
extension and modification models) has been spreading to more than 100 countries worldwide.
Many of these countries also come out with their own OVOP logos as showing in Figure 2.1.
OVOP
one community creates one marketable product by utilizing potential resources
of the region, with identical brand, by using own/local resources and brush up
the product, upgrade the value, establish the own brand, and merchandise in the
global markets
(Igusa, 2010)
8
Figure 2.1: Expanding OVOP and sample of symbol logo. Source: Igusa (2010).
It would be interesting to learn how the variety of OVOP models and concepts is being applied
throughout the world. Kurokawa et al. (2010) in his report of OVOP movement in Japan,
Thailand and Malawi had conducted a comparative analysis on the original and overseas
OVOPs (Thailand and Malawi) to collect more information and insights especially on the local
context applications. The following table clarifying similarities and differences among the
three cases, and by extracting lessons from the comparison for the future application of the
OVOP approach to other countries and development agencies in the future (Table 2.1).
Table 2.1: Comparative features of three OVOP movements
Oita OVOP Thai OTOP Malawian OVOP
Basic objective Community
revitalisation
Local economic
development as a part of
national economic
restructuring
Attainment of MDGs
and local economic
development
Initiator Local governments Central government
(OTOP National
Administrative Committee)
Central government
(National OVOP
Secretariat)
Actors other than
the initiator and
OVOP groups
Cooperatives;
Central government
agencies
Central government
agencies; Local
governments; Universities
Local governments;
donor agencies; NGOs
Qualification for
participation
None OTOP registration at CDD,
Ministry of Interior
Proposal-based
Technical
assistance
Product development Product development;
training in quality control,
management, labelling,
packaging and marketing
Training in OVOP
concept, management
including basic book
keeping and packaging
Financing Local banks;
cooperatives
BAAC, Miyazawa fund Small government and
JICA funded
equipment; quasi-
government financial
institute
9
Marketing Top sales promotion;
trade fairs;
exhibition; product
competition
OTOP shops; product
championship and
qualification; web-based
marketing; export
promotion; Michinoeki
Antenna shop; some
qualification
Source: Kurokawa et al. (2010: 28).
2.3 PREVIOUS STUDIES ON OVOP
During early stage of OVOP concept development in Japan, various studies and
research has been conducted. However, most of these studies and reports are written in
Japanese (Kurokawa et al., 2010). Only after the concept been widely accepted and adopted at
international level for rural and regional revitalisation and development agenda, then the
number of studies and report on OVOP in English language has increased (Kurokawa et al.,
2010). OVOP researchers such as Igusa (2008), Hayashi (2007) and Kurokawa et al. (2010)
suggests the study on OVOP movement can be categories into three (3) types namely:
Table 2.2: Three main types of study relating to OVOP movement
Continued.
1. The studies that discusses adaptability and positive impacts of the Japanese
OVOP approach in other countries. For example, Igusa (2008) argues that the
Oita model is applicable to Asian countries. Kurokawa (2008) describes the OVOP
movement as a development policy for developing countries but points out clear
differences between the original OVOP and overseas OVOPs. Reviewing the
trajectory of Japan‟s National Development Plans from 1960s to 1990s, Yoshimura
(2004) from the UNCRD stresses that the most important task for sustainable
regional development such as OVOP is to promote community-oriented economic
and industrial policies by utilizing local resources (including nature, culture and
history). Hayashi (2007) also emphasizes the importance of community-oriented
nature of any regional development policy. In addition, he mentions the importance
of agglomeration, cluster and innovative environment.
2. The studies that concerned with case studies of specific OVOP activities.
Stenning (2008) examined the origin of the OVOP movement in a small town called
Oyama-machi, Oita prefecture and found the essence of the movement in
networking activities. Yamagami (2007), however, argues that the real essence of
the development plan of the Oyama town lies in its diversity.
10
Table 2.2: Continued.
Source: Kurokawa et al. (2010: 2)
According to Kurokawa et al. (2010), studies of OVOP concept and application outside Japan
are still limited. For instance, a study by Fujioka (2006) on Thai OTOP indicated that the Thai
model and experience in application is quite different from the original Japanese prototype.
The difference can be linked to application approach and initiator of Thai OTOP that is a top-
down scheme led by the central government. In comparison, the Japanese OVOP is bottom-up
and community-driven approach. Similar result also emerged from a study by Yoshida (2006)
on the Malawian OVOP which initiative through a proposal-based community project
complemented by low interest-rate loans as well as led by central government.
Review on OVOP (or SDSI in the Malaysia context) on the other hand, revealing some
interesting results since the concept, application framework and execution, keep on changing
(or evolving) over the years (Author in 2016). The Malaysia OVOP (SDSI) started in year
1992, a year after the Prime Minister visit to Oita Prefecture in Japan in 1991. A pilot project
was carried out in Kedah State in 1992. However, application of OVOP concept has gone
through some modification to fit into local needs and context, which resulted in the birth of the
ODOP concept (One District One Product) (Igusa, 2010). This modified concept seems to
upscale the nature of OVOP from promoting unique product from village to product at a district
level. The ODOP model also significantly undermined many local products at village level
with only selected few products to be highlighted at a district level (Author in 2016).
The ODOP model (1992) has been maintained for almost 10 years by the central government
agencies (mostly by the Ministry of Rural and Regional Development, the Ministry of Tourism
and Cultural Heritage) before evolved to become the OVOI (One Village One Industry)
concept in 2002. Once again, the concept downscale its implementation from district level to
village level and the rural product was labelling as “industrial product” (Author in 2016).
However, just after a year (in 2003), the concept has gone another transformation and known
as the ODOI (One District One Industry). Therefore, the idea of bringing the concept into
3. The studies which focuses on brand values of local products. Okura (2007)
conducted an interview survey among Oita consumers and found out that
they recognize brand values in OVOP products. He concludes that the success
of the OVOP brand depends on continuous supports from local governments. Fujita
(2006) also discusses OVOP brand values from the viewpoint of spatial economics
and endogenous growth theory. He depicts the two uniquely Japanese concepts -
the OVOP and Michino Eki (Roadside Stations) - as potential tools for bridging the
gap between cities and rural areas. He considers both OVOP and Michino Eki as
rural development strategies of a broader nature based on "brand agriculture.” This
represents a general strategy for community-based rural development that
identifies, cultivates and fully 3 utilizes local resources for the development of
products or services unique to each village.
11
promotion of local product is now returned to promoting and developing products at district
level (Author in 2016; Igusa, 2010). Interestingly, with reference to the recent statement by the
Ministry of Finance (MoF) (refer to Section 1.1 of this report) in 2015, the Federal Government
looks positive to welcome back the original OVOP concept and to be adopted as a tool for a
more inclusive and sustainable rural development for this country.
2.4 THREE MAIN PRINCIPLES OF OVOP
According to Igusa (2010), there are three basic principles of OVOP as outlined by
Governor Hiramatsu, who also known as “the father of OVOP movement”. These principles
are:
1. Local but global – globally accepted products that reflect of the local flavour and
culture.
2. Self-reliance and creativity – realization of One Village, One Product/Service through
self-initiative actions utilizing potential resource of the region.
3. Human resource development – foster of proactive people with a challenging and
creative spirit (entrepreneurship).
A more thorough investigation is conducted for each principles as outlined by Igusa (2010) and
the results from the review of literature is presented in Table 2.3 to Table 2.5.
12
Table 2.3: Description of OVOP principles – “Local but global”
Local but global
Definition Scope/characteristics/principles Issues Globally accepted products that reflect of the local flavour and
culture (Igusa, 2010)
Local residents are expected to create globally marketable
products and services that embody people’s pride in the
material and cultural richness of their home areas. The “story”
behind any product or its development helps attract consumers’
attention. Such local flavour adds value to local products while
the use of local human and material resources will help make
economic activities sustainable (Kurokawa et. al., 2010)
OVOP movement has developed into enhancing local
communities’ entrepreneurial skills to utilize local resources
and knowledge, creating value-adding activities through
branding of local products in local economy (Oikawa, 2015)
The first principle encourages rural entrepreneurs to produce at
least one product of commercial value per village using
available natural resources, local craftsmanship and creativity
(Radiah Abdul Kader et. al., 2009)
The process by which the town of Oyama sought to develop
local products and make them commercially viable was used as
a “mirror” held up to make other communities aware that their
distinctive local agricultural and fisheries produce, goods
processed from that produce, folk crafts and manufactured
goods had appeal and character that could not be found in mass-
produced urban equivalents (Igusa, 2011: 3).
Reflect local flavour and cultural
richness of home area
Uses local human and material
resources
Utilises available natural resources,
local craftsmanship and creativity
Has a “story” behind the product or its
development to add value to local
products (“local flavour”)
Oversupply of local fruits during fruit season has causing
economic loses to agro-preneurs (income reduction due to
“price war”, big discount and tight competition). Increase of
sales did not represent increase of income due to issue of
oversupply of local friuts (Barjoyai Bardai & Mohd. Fairuz
Md. Salleh (1998); Nurulhuda Che Abdullah & Ramlee
Mustapha (2009))
New mechanism is needed to overcome this issue. Research
and development (RnD) in agriculture and food sector have
to be creative and innovative and should create new
opportunity for business to expand and foster (Barjoyai
Bardai & Mohd. Fairuz Md. Salleh (1998); Nurulhuda Che
Abdullah & Ramlee Mustapha (2009))
Research need to direct into exploring possible methods or
tools to nurture Small and Medium Enterprises (SMEs).
FAMA need to initiate plan to improve channels for
marketing and promotional of agriculture and rural products
related to OVOP (Barjoyai Bardai & Mohd. Fairuz Md.
Salleh (1998); Nurulhuda Che Abdullah & Ramlee Mustapha
(2009))
Source: Review of literature
13
Table 2.4: Description of OVOP principles – “Self-reliance and creativity”
Self-reliance and creativity
Definition Scope/characteristics
/principles
Issues
Realisation of One Village, One Product/Service through self-initiative
actions utilizing potential resource of the region (Igusa, 2010)
The basic principle of this movement is that the grassroots in the
community are the leading driver of self-reliance, and the administration
is for indirect support, not financial but technical help (Oikawa, 2015)
In this movement the education of people to be resourceful is most
important, which makes it feasible to be self-reliant and creative for
sustainable development, ‘local link, global reach’ (Oikawa, 2015)
To promote self-reliance, government subsidies are not provided for
OVOP groups. Instead government aid comes in the form of technical
assistance and R&D support for product development, assistance for
marketing and distribution to reduce the transaction costs that local
entrepreneurs have to bear if they were to execute product development
and penetrate markets themselves (Radiah Abdul Kader et. al., 2009)
In its initial stage, the movement in Oita began by inspiring local
residents’ “Affirmative Awareness” of latent resources, with strong
stimulus and direction supplied by local government (Igusa, 2011: 3)
Hiramatsu has said, “True community development is not sustainable if
managed by government authorities. It will not take root in the
community. On the contrary, it tends to work best in communities which
have turned their back on government policy. Government should not
try to take the lead, but provide support for those who show initiative.”
He argues that “political decentralisation must be found on local
autonomy. Local communities can only survive if they kick the habit of
dependence on prefectural and national government support”
(Yamagami & Fujimoto, 2011: 44)
Initiated by locals using
potential resources of the region
Local community as the driving
force and administration from
government is for indirect
support, not financial but
technical help
Not government-led
development initiative based on
grants of public funds, but
instead fuelled by the ideas and
self-motivated efforts of
community members
themselves (Kazuhira, 2011,
pg. 23)
Bottom-up approach towards
the quantitative and qualitative
development of the community
(Haraguchi, 2008, pg. 7)
The Federal Government agencies involved in OVOP
development need to establish initiative including
formulating special unit for OVOP at district level or for
every area of interest for OVOP projects. This unit should
be responsible to provide guidance to local business person,
conducting training program, seminar and dissemination of
information and monitoring of OVOP business
performances and solving local issues/concerns. OVOP
business operators at local / village level are encourage to
formulate local business association as platform of
information sharing and helping each other in fostering their
businesses (Nurulhuda Che Abdullah & Ramlee Mustapha,
2009)
In a country, such as Malawi, where the poverty level is
extremely high, most producers are persistently deprived of
capital, and thus they seem to have clear ideas of what they
would do if they have access to capital. Under this
circumstance, producers may not feel the need to take time
to go through an elaborate community revitalization
scheme, even if this would enable them to come up with
better, sustainable productive activities that would have a
greater impact on the community as a whole. This, of
course, does not mean that it is impossible to have a
participatory community development project in poverty-
stricken regions. However, it suggests that for such a project
to achieve the intended effects, it is not enough to simply
establish project management offices and transfer OVOP
concepts to key personnel. It is more important that OVOP
concepts, objectives and means to achieve them are clearly
and continuously explained to them and to community
participants at large (Haraguchi, 2008, pg. 25-26).
Source: Review of literature
14
Table 2.5: Description of OVOP principles – “Human resource development”
Human resource development
Definition Scope/characteristics/
principles
Issues
Fostering proactive people with a challenging and creative spirit (entrepreneurship) (Igusa, 2010)
The OVOP movement, in contrast, emphasizes visionary local leadership with a challenging and
creative spirit. The success of any OVOP product or service largely depends on its quality, developed
and improved by local people themselves (Kurokawa et. al., 2010)
The principle is the ‘product must be super best quality and local people must be employed’. (Oikawa,
2015)
Human resources are developed through training in terms of leadership, management and community
building as communities become engaged in the OVOP process. (Radiah Abdul Kader et. al., 2009)
The conduits chosen to support the required networking with stakeholders and to access critical inputs
and services as loan capital, product promotion, market assessment, etc. include conventional state
agencies as relevant industry departments and banks but also unconventional agencies, for instance,
educational institutions, national embassies abroad, high-end hotels and even international airlines.
These several apparently unconnected (to the cluster business) agencies perform such crucial roles
as data collection and analysis, advertising, marketing support, and exhibit products for foreign
nationals so that product diversification could be introduced. Additionally, these initiatives include
rewarding the artisan-champions at periodic intervals; this generates healthy competition, keenness
to improve quality and, in fact, innovate at the enterprise level. These are significant out-of-the-box
institutional and organizational innovations which would have much relevance to the Indian craft
sector. (Das, 2015)
By presenting case studies on how similar goods had been the subject of successful marketing
campaigns in metropolitan areas, the Oita prefecture government, led by the governor, sought to raise
locals’ awareness of the goods’ inherent value and inspire them to commercialise. They continued to
impress upon locals the need to be fastidious about quality and reliability, the importance of creating
products that were distinctive, and the need for creative development and improvement. At the same
time, the prefectural authorities actively engaged in and supported both technical development
programs and promotional campaigns, including product showcase events and brand building
initiatives in major cities. (Igusa, 2011, pg. 4)
Town leaders realising the
importance of fostering
human resources (Yamagami
& Fujimoto, 2011, pg. 39)
Educating locals to innovate
and solve challenges on their
own
Quality of OVOP product or
service should be improved
by locals using local
knowledge
Electing local “champions”
Essential to ensure the
sustainability of agricultural
and community development
initiatives (Yamagami &
Fujimoto, 2011, pg. 39)
Creating a community
focused to improve living
conditions but also wealthy in
cultural and spiritual terms (a
pre-OVOP movement, NPC
in 1969 at Oyama – “Neo
Personality Combination”: its
core concept is personal
development)
Findings from the study by
Nurulhuda Che Abdullah &
Ramlee Mustapha (2009
indicating majority of agro-
preneurs and Bumiputra
entrepreneurs (SMEs) wanted to
participate in entrepreneurial and
business training courses
The Ministry of Agriculture and
Agro-Based Industry Malaysia,
together with its agencies
(including FAMA, Agriculture
Department and MARDI)
involved in development and
training of entrepreneurs need to
organize relevant training and
courses to guide OVOP
entrepreneurs, SMEs operators
in managing and sustaining their
businesses.
Relevant courses could include
training on marketing, basic
accountancy and financial
management, motivational
course etc. (Nurulhuda Che
Abdullah & Ramlee Mustapha,
2009)
Source: Review of literature
15
As presented in Table 2.3 to Table 2.5, there is one common attribute which implies to all three
principles of OVOP namely “local ownership towards OVOP business”. In the first principle
i.e. “Global but Local” or “glokal” (term which once popular among politicians and decision-
makers in Malaysia to represent the motto “think globally but act locally”. As from the OVOP
point of view, local community or entrepreneurs are expected to create products or services
that can be accepted by global markets, at the same time represent local’s pride and unique
identity of their home villages/towns. Local tells their “story” to customers via their distinctive
product and as a result, the story will add value to local products/services hence improving
livelihood of those who involved in the business.
As for the second principle i.e. “self-reliance and creativity”, many studies on OVOP business
in various countries (refer to Kurokawa et al., 2010; Igusa, 2010; Kazuhira, 2011 and
Haraguchi, 2008) tend to support that everything local is potentially valuable and have value
for commercialization, however it will depend on the initiative and effort (creativity) of local
people. For example is the Kabosu lime at Oita prefecture which pretty much neglected its
potential and be treated as a useless plant since majority of local farmers preferred to plant
ordinary orange (Kurokawa et al., 2010). But not until the community accept the call made by
Hiramatsu on OVOP business model, many farmers in Takeda Town and some other villages
which started to explore new usage and potential use of Kabosu limes other than for cooking.
Result from community’s self-reliance and creativity, the Kabosu lime found to be medicinal
plant, and give added flavour to certain dishes, desserts and drinks. The discovery had captured
the mind of Japanese consumers and it is now become product to represent Oita and being
processed and turned into juice and being marketed for customers in Oita prefecture and other
places (Kurokawa et al., 2010).
Meanwhile, for the third principle i.e. “human resource development”, the OVOP movement
and implementation need to be followed by clear policy on training and human resource
development while maintain the construction of physical development. The aim in training and
human resource development is to breed “local champions”, whereby in future, this local
champions will breed many new/local champions” (Author in 2016; Kurokawa et al., 2010).
This champions in turn should lead local organisation and local business hence improving
livelihood of local people themselves.
16
2.5 ISSUES AND CHALLENGES IN OVOP
The following Table 2.6 summarised some key or main issues and/or challenges related to
OVOP initiatives (displayed in details in Table 2.7). These information and formulation of
issues/challenges was derived from various literature sources.
Table 2.6: Summary of main issues and challenges of OVOP based on review of literature
Principles Summary of issues/challenges
1 Human resource
management
Leadership issue
Lack of training for staffs to manage the business (in accounting,
production, marketing)
2 Local but global Monopoly of local market by big investors/companies
Stringent in standards of certification for local entrepreneurs
High dependency on government support/ initiatives/ assistance
Lack of funding and weaker economic base
Lack of infrastructure
3 Self-reliance and
creativity
Lack of business strategy (unclear unprepared for future
uncertainties)
Lack of community support and participation – lack of
knowledge and information
Current planning mainly focus on the short-term gains/results
rather than long-term economic revitalization
Source: Author in 2016, based on various source of literature as mentioned in Table 2.5.
“True community development is not sustainable if managed by government authorities. It
will not take root in the community. On the contrary, it tends to work best in communities
which have turned their back on government policy. Government should not try to take the
lead, but provide support for those who show initiative.”
Hiramatsu, the founder of OVOP movement
17
Table 2.7: Major issues and challenges in adopting OVOP plan
Issues/Challenges
Sources Malaysia
(Igusa, 2011), (Rohayu Roddin
et. al, 2013),
(Igusa, 2010)
Thailand
(Mukai & Fujikura, 2015), (Srisantisuk, 2015),
(Moore & Donaldson,
2015), (Kurokawa, 2009), (Jaiborisudhi, 2016),
(Fujioka, 2011),
(Kurokawa et. al, 2010),
(Oikawa, 2015)
Indonesia
(Rahayu et. al, 2015),
(Aryanto &
Fransiska, 2012),
(Triharini et.
al, 2013)
Laos
(Mukai & Fujikura,
2015)
Philippines
(Rana, 2008)
Mongolia
(Igusa, 2011a)
India
(Gupta et. al, 2015)
Malawi
(Oseni & Oseni,
2015),
(Mukai & Fujikura,
2015),
(Chidumu,
2007),
(Kurokawa
et. al, 2010)
Nigeria
(Oseni & Oseni, 2015),
(Issa &
Lawal, 2014)
Kenya
(Ohaya et. al, 2013)
Cambodia
(Sopheaktra, 2008)
Leader failing to raise
local awareness of
shared assets, resulting
in uncontrolled
development and
resource depletion
Outsiders/big investors
seeking to control the
local economy
Poor product quality
High certification
standards prohibiting
farmers to acquire
certification
Absence of/Unclear
business strategies that
guide what products
are sold and where they
are sold
Personnel training
problems/limited
human resources/low
community
participation due to no
18
knowledge on local
OVOP plan
Accounting systems
and marketing channels
not yet well established
Administrative
structure spearheaded
by the government with
underlying intent to
gain political favour
Weaker economic
base/Lack of funds
Heavy reliance on the
current ruling
government to lead and
fund plans
Revised OVOP plan
focused on short term
results rather than long-
term revitalisation of
local economy
Lack of infrastructure
and/or training
Source: Review of literature.
19
2.6 OVOP MOVEMENT IN MALAYSIA
In recent years, there has been renewed interest in developing rural areas. The reasons
for this interest lie in the profound changes that are affecting the countryside and rural societies.
As in many developing countries, migration to the cities has, as suggested by many
demographic and rural planners and scholars, eroded the vitality of rural communities.
Traditional economic systems especially in farming and forest-related activities, are falling into
disuse, the quality of the environment is deteriorating, and the income and employment
opportunities in rural communities are decreasing (Kamarudin, 2016).
These phenomenon urged government and/or non-governmental agencies/investors to seek out
alternatives in developing its countryside and rural communities with more profitable economic
activities, as it became obvious that the agricultural sector alone did not hold the key to rural
development. One of the main strategies of this search was to identify ways of encouraging the
diversification of rural economic activities (Kamarudin, 2016). Rural economic diversification
process has brought with it an interest in rural entrepreneurship agenda as a tool to revitalize
the countryside and rural communities in sustainable ways. In the early 1990s, the spreading
agenda on revitalizing countryside and rural communities in developed country particularly in
Japan through OVOP agenda has caught the attention of top decision-makers, politicians and
development planners in Malaysia. At that time, Malaysia under Prime Minister Mahathir
Mohamed also focusing on the “Look East Policy” (Dasar Pandang Ke Timur) i.e. policy that
looked at Korea and Japan and intended to learn about socio-economic development from these
countries and to transfer knowledge, work ethics, skills and technologies to help Malaysia
realising the Vision 2020 – Malaysia as developed and industrialized country by year 2020.
In conjunction with the spirit of the Look East Policy, Mahathir’s administration at that time,
become attracted to gain more understanding about OVOP concept and development agenda,
especially on its potential in revitalising rural society, since Japan rural areas of Japan also
suffered from the issue of outmigration, depopulation and increase of aging population (Igusa,
2010). Therefore, in December 1991, Mahathir has visited Oita Prefecture to view the progress
and achievement of OVOP movement in Japan. After his meeting with Governor Hiramatsu,
Mahathir quickly begin initiative to introduce OVOP pilot project in his home state of Kedah
in 1992 (Igusa, 2010). Development of OVOP program in Kedah state, Malaysia in 1992 is
under the initial pilot project called One District One Product (ODOP) program, a slightly
modified concept from original OVOP movement in Oita, Japan (Igusa, 2010).
Under ODOP program, each selected district is being identified its potential resources and
potential distinct product that can be developed or refined, improved the value, established own
brand and be promoted for local and international markets. Among local products that have
been promoted under ODOP program including handcraft, food and beverage, sewn and
livestock. Ten year later (in 2002), the ODOP policy was extended to One Village One Industry
(OVOI) with reference to the case of One Tambun One Product (OTOP) in Thailand. A year
later (in 2003), OVOI has been transformed into One District One Industry (ODOI) and the
movement has been maintained ever since.
20
Figure 2.2: Brief history of OVOP movement in Malaysia
Source: Kamarudin et al. (2016: 10)
The adoption of OVOP concept from Oita into local context has undergone some modification
including broadening the scope for rural product and activity to become ODOP. This is a
necessary action since rural development policy at that time was more emphasised on the
important role of districts to spearhead development of the rural economic sectors (Fatimah
Mohd Arshad et al., 1997). There are three main objectives of ODOI project as stated in Table
2.8. According to MECD (2004), approximately 1,420 entrepreneurs from 78 districts (out of
134 districts) in Malaysia had participated under the ODOI project in year 2004. Entrepreneurs
from all the districts were promoted to produce local products involving four categories namely
(1) crafts; (2) food-based products; (3) rural industry products and; (4) rural industry services
(MCED, 2004).
Source: Abdul Kader et al. (2009: 149)
1. To increase the quality of life of entrepreneurs through the provision of business and employment
opportunities to the local people as well as to augment income and development, primarily in the
rural areas
2. To make use of natural resources and labour force in the rural areas more efficiently towards
sustainable growth of the national economy
3. To increase competitiveness among rural entrepreneurs by producing world-class products and
services for the international market
Table 2.8: Main objectives of One District One Industry
In 2002 transformed into OVOI
In 2003 transformed into ODOI
(until today)
21
Figure 2.3 illustrate six (6) main strategies adopted by the government for promoting and
developing ODOI project in Malaysia. These strategies are including skill development,
product development, marketing and promotion, monitoring and evaluation, quality control
and resource management (Igusa, 2010 and Abdul Kader et al., 2009).
Figure 2.3: Strategies adopted by government for ODOI development
Source: adopted from Igusa (2010); Abdul Kader et al. (2009)
Abdul Kader et al. (2009) uses example of production of craft products in describing different
approaches for executing the ODOI concept namely (1) craft heritage village approach and (2)
ala factory approach:
Strategies for ODOI
Development
skill development
product development
marketing and
promotion
monitoring and
evaluation
quality control
resource management
1
2
3
4
5
6
The first approach known as the “craft heritage village” is adopted if many entrepreneurs in
a particular district are actively engaged in the same craft based on local expertise and
wisdom. The other key requirements for this approach are the availability of sustainable
supply of natural resources, a lead entrepreneur to commercialize production, infrastructure
and basic amenities to support the area as a tourist destination and the readiness of the local
community to get involved in development programs.
The second approach known as “ala factory” caters for enterprises which are already in the
business of handicraft production. Those enterprises absorbed into the ODOI program
undergo expansion in production to the extent of being able to offer fulltime or part-time job
opportunities to the local population. Priority is given to enterprises having their own
workshops and those ready to upgrade their production status to SME status.
22
The first approach seems closely related to the theory of agglomeration of rural economic
activities whereby a prominent local product is produced by many rural entrepreneurs. This
local products is also an outcome from local knowledge and ingenuity and (the knowledge and
skills) may be passing from generation to generation. The description of the first approach
seems very closely related to the respondents selected for this research i.e. Labu Sayong
operators in Kuala Kangsar, Perak. Another features of ODOI entrepreneurs mentioned under
this approach is availability and easily accessible raw materials, local leader and integration of
ODOI activities/enterprises with rural tourism sector. On the other hands, the second approach
i.e. ala factory, seems to focus on enhancing the capacity of existing craft enterprises whereby
ODOI concept function to assist entrepreneurs upgrading their workshop and facilities hence
expanding their enterprises and hopefully to creating more jobs for local people.
Generally, the ODOI project is indeed a strategic and inclusive development tool for uplifting
the quality of life and livelihood of the rural entrepreneurs and community in Malaysia through
employment creation and providing new source of income, including for the B40 households.
Through ODOI, many existing rural enterprises in a particular district has been revitalised and
at the same time, many new form of rural enterprises have been created and nurtured. Review
of literature also support the notion and hypothesis of this research that is, OVOP (or ODOI in
this context) promotes entrepreneurial spirit among rural business person, creating new jobs
for local people, utilising local resources in a more valuable way, providing a more stable
income especially to the B40 households, nurturing local talents, preserving local knowledge
and skills to be continued by local people themselves (Author in 2016).
In order to further understand this advantages and “real impact” of OVOP in uplifting the
quality of live for those who are directly and/or indirectly involved with the project, therefore
the pertinent question that need to be asked is “what would be the driving factors for community
participation in OVOP and the extent to which the concept have benefited them?”. In view of
that, this study is proposed to determine the current OVOP business ecosystem and process,
followed by identification of key motivational factors for involvement in OVOP project,
influential reasons for venturing into OVOP business activity and challenges facing in OVOP.
All these elements will be thoroughly investigated using a case study method i.e. a group of
OVOP entrepreneurs (Labu Sayong/Clay vase operators) in Sayong village, Kuala Kangsar
district, Perak.
The study also intended to identify the involvement of the B40 households in OVOP project
and to what extent they have been benefited (or not benefit) from the project. Findings from
this study (as presented in the complete report) should provide some valuable information
regarding the status of OVOP practices among Labu Sayong operators in Kuala Kangsar and
may have value to relevant agencies in improving and enhancing the effectiveness of OVOP
concept that not only uplifting the livelihood of OVOP entrepreneurs but also creating spill-
effect and benefited the workers i.e. the B40 households.
23
2.7 OVOP AND PLAN FOR B40: REFLECTION OF THE 11th MALAYSIA PLAN
There is no doubt that local government’s strong commitment and continuous support
towards OVOP project had become one of the major success factor in OVOP movement. This
is a prominent factor in discussing the success of the Oita OVOP movement (i.e. strong
commitment and hard work which initiated by the Governor Dr. Hiramatsu himself).
According to Oikawa (2015); Igusa (2011); Korukawa et al. (2010) and Okura (2007), local
government and federal governmental agencies that operating at local level, for example in
Malaysia namely the Institute for Rural Advancement, INFRA (under the Ministry of Rural
and Regional Development), and Kraftangan Malaysia (under the Ministry of Tourism and
Culture) have directly involved in promoting OVOP projects especially in rural areas by
providing technical and training support, entrepreneurship incubator, giving prospect to local
products and organizing promotion and marketing of OVOP products through involvement in
national and international product exhibition (Igusa, 2010; Abdul Kader et al., 2009). Other
than that, government and relevant agencies at national and local levels also enhancing the
development of OVOP by offering development grants, awards and prizes to boost motivation
and insert encouragement to local OVOP operators and entrepreneurs (Igusa, 2010; Abdul
Kader et al., 2009).
In relation to OVOP plan and the urgent need for uplifting the standard of living among the
Bottom 40 percent of low income households (or termed as the B40) in rural Malaysia has
becoming more evidence in the Eleventh Malaysia Plan (MP) (2016-2020) (Government of
Malaysia, 2015, the Sun Newspaper, 2015).
Figure 2.4: Uplifting the B40 households’ livelihood as mentioned in the Eleventh Malaysia
Plan (2016-2020). Source: Government of Malaysia (2015: 1-12)
As stated in the 11th MP, there are currently 2.7 million B40 households in Malaysia (with a
mean monthly household income of RM2537.00). As the national progress, there is also an
increasing pressure to ensure the B40 households would not be left out from the socio-
economic development process, as it is clear failure to address the needs of low income
population will potentially to create tension and instability to the whole nation. With limited
participation and contribution from the B40 households, there would also undermine efforts
24
for providing more skilled workers, limit the country growth and widening gaps between urban
and rural areas. Therefore, the statement on promoting OVOP plan for the B40 households
released by the Ministry of Finance is timely as it would support and/or complement the overall
plan for uplifting the quality of life among the B40 households as stated in the 11th MP.
The report also mentioned that under the extension plan for OVOP program, approximately
20,000 villagers are expected to gain benefit (job creation at local level and potential income
generation) from producing handicraft, food and beverages, sewn and livestock products (The
Sun Newspaper, 2015). Furthermore, revitalising rural socio-economic through OVOP
program would potentially to foster the development of new economic sectors related to OVOP
including sustainable farming as well as rural tourism (Figure 2.5).
Figure 2.5: Summary of focus areas of the Eleventh Malaysia Plan (2016-2020).
Source: Government of Malaysia (2015: 3-13)
“The Finance Ministry will propose to the government to extend the 1 Village 1
Product program to households in the bottom 40% of income (B40) in the 11th
Malaysia Plan”
(The Sun, 10/6/2015, p. 16)
25
CHAPTER 3 DATA ANALYSIS & DISCUSSION OF RESULTS
3.1 INTRODUCTION
This chapter discusses and presents the findings of the interviews and field observation
in relation to OVOP (Labu Sayong/potteries) business ecosystem in Kuala Kangsar (case
study). The analysis and presentation of results have been divided into five sections as follows:
i. Description of respondents’ background and profile of business.
ii. Discussion of the current OVOP business ecosystem and processes as observed in
Kuala Kangsar.
iii. Discussion of the key motivational factors for respondents’ involvement in OVOP
business.
iv. Discussion of the influential reasons for respondents’ venture into OVOP business.
v. Discussion of the main issues and challenges of OVOP in the study area.
The final section of this chapter will summarise findings into a SWOT analysis and highlighted
on how the outcomes of the field study exercise could be integrated into formulation of the
proposed framework for fostering OVOP development plan especially for the study area.
3.2 PROFILE OF RESPONDENT
Table 3.1: Basic profile of respondent/ OVOP operators
Information Entrepreneur 1
(Xtream Craft)
Entrepreneur 2
(Win Craft)
Entrepreneur 3
(Shahizul Craft)
1. Age category 46 – 55 years old 46 – 55 years old 36 – 45 years old
2. Gender Male Male Male
3. Race Malay Malay Malay
4. Religion Islam Islam Islam
5. Level of education First degree SPM SPM
6. Origin Born and raise in the
village
Born and raise in the
village
Born and raise in the
village
7. Previous job Labour Odd job (labour) Driver for government
agency
8. Monthly income
(before OVOP)
RM3,000 <RM1,000 RM2,000
9. Monthly income
(after OVOP)
>RM5,000 >RM3,500 >RM3,500
10. Changes of monthly
income
Increased* Increased* Increased*
Source: Research fieldwork in 2016
26
Table 3.2: Profile of OVOP business
Information Entrepreneur 1
(Xtream Craft)
Entrepreneur 2
(Win Craft)
Entrepreneur 3
(Shahizul Craft)
1. Type of business Production of craft / souvenir Production of craft / souvenir Production of craft / souvenir
Rural tourism / Edu tourism Rural tourism / Edu tourism Rural tourism / Edu tourism
2. Year of establishment 2010 1992 2007
3. Type of ownership Sole proprietor Sole proprietor Sole proprietor
4. Legal status Registered with ROC (Registrar
of Company)
Registered with ROC Registered with ROC
5. Number of workers (early stage) 2 – locals (full time)
1 male; 1 female
2 – locals (full time)
1 male; 1 female
2 – locals (full time)
1 male; 1 female
6. Number of workers (current stage) 3 – locals (full time)
3 male
4 or 5 locals (part time)
2 male; 2 female
3 – locals (full time)
1 male; 2 female
2 – locals (full time)
1 male; 1 female
7. Number of B40s employed in contract
system
Up to 20 small craftsman Up to 10 small craftsman Up to 5 small craftsman
8. Reasons for engage many/less contract
craftsman:
Own middle size craft workshop Own big scale craft workshop Own middle size craft workshop
9. Source on raw materials Clay from local supplier (n=3)
(Kuala Bendang village)
Clay from local supplier (n=3)
(Kuala Bendang village)
Clay from local supplier (n=3)
(Kuala Bendang village)
Moulds for potteries from
local suppliers (Sayong and
Kuala Bendang)
Self-made moulds
Moulds for potteries from
local suppliers (Sayong and
Kuala Bendang)
Self-made moulds
Moulds for potteries from
local suppliers (Sayong and
Kuala Bendang)
Self-made moulds
10. Demand for raw materials (including price
range)
Clay: RM6/sack
50-60 sacks/month
(depending on
demand/booking)
Clay: RM7/sack
30-40 sacks/month
(depending on
demand/booking)
Clay: Owner of land/self-
produce
20-40 sacks/month
(depending on
demand/booking)
27
Moulds: RM20/unit for
water dispenser’s vase and
can go up to RM150/unit for
big vase
Moulds: RM20/unit for water
dispenser’s vase and can go up
to RM150/unit for big vase
Moulds: RM25/unit for
water dispenser’s vase and
can go up to RM150/unit for
big vase
11. Business capital (to start up business) Using internal fund (own
savings)
Using internal fund (own
savings)
Using internal fund (own
savings) + aid from
government agency (to build
souvenir shop)
12. Production capacity Information not available Information not available Information not available
13. Market for product Local market Kuala
Kangsar, RnR Sungai Perak,
neighbouring state, to Kuala
Lumpur
Export to Brunei
Only for local market Kuala
Kangsar, RnR Sungai Perak,
neighbouring state, to Kuala
Lumpur
Local market Kuala
Kangsar, RnR Sungai Perak,
neighbouring state, to Kuala
Lumpur
Export to Japan
Source: Research fieldwork in 2016
28
A series of field study has been conducted between August until September 2016 involving
rural entrepreneurs with direct involvement in OVOP and/or OVOP-related activities. The
Labu Sayong (pottery) operators of Kuala Kangsar district in Perak state has been selected as
a case study after reviewing all relevant information on SDSI (One District One Industry)
producers in Malaysia from the ministry of Rural and Regional Development and Kraftangan
Malaysia (Author in 2016). As showing in Table 3.2, all respondents for this study are
operating OVOP (Labu Sayong/clay vase) related to craft or souvenir production as their core
business. They are also utilising and open their craft workshop (production area) and sales
gallery (or souvenir shop) for visit by tourist. During every visit, visitors will be presented with
live demonstration by the workers on moulding process (i.e. how to press liquid clay into
mould) and the using of spinning machine for decoration and polish the vase before drying
process. Every visitor/tourist can participate in the process through “learning by doing”
activity. Moreover, they can purchase and bring home their own hand made product after the
activity. For the time being, only Entrepreneur 1 and 2 received tourists quite often as compared
to Entrepreneur 3. Many of tourist are school children which on their school trip and also some
international tourists under tour package offered by private tour agencies.
All OVOP operators have established their business for more than 5 years. However, age of
the company may not be accurate to determine years of experience obtained by each operator.
For instance, Entrepreneur 3 mentioned that he has more than 20 years of experience in Labu
Sayong (vase) making and started formal business around 12 years ago and only this year
(2016) he received development grant from government agency to construct his own souvenir
shop. Similar feedbacks were gathered from other two respondents where craft making
business was an inherit business for at least three generations. All operators had registered their
company with the Registrar of Company (RoC) where they can operate legally and also need
to comply with regulations set by registration body.
3.3 CURRENT OVOP BUSINESS ECOSYSTEM AND PROCESS
Result from interview also indicated that all respondents are currently employed local
workers (craftsman) in their operation. Number of craftsman employed is very much depending
on size of business. For example, smaller scale business such as Entrepreneur 3, their workers
is the owner himself and his wife (husband and wife) with or without one part time worker
(daily wage). As for a larger scale of business, for instance Entrepreneur 1 is currently employs
three full time workers (exclude owner) and four or five part time workers. For part time
workers are normally on call and will be paid between RM15.00 to RM18.00 per day,
depending on customers’ order or during special occasions where order from customer is
plenty.
One unique discovery during field study is the emergence importance of “contract system”
(term which often used by OVOP operator to describe relationship established between main
OVOP operators with smaller/from home/cottage industry craftsman i.e. small supplier of craft
products to operators) (Figure 3.1). Detail information from the interview has uncover that
majority of small operators participate under “contract system” are the Bottom 40% households
(B40) which also the main subject of this study. Due to increase demand for craft product
29
especially Labu Sayong from new segment of costumers especially among wedding planners
(as souvenir or door gifts) main operators could not achieve their production target hence
putting the order into jeopardy. In order to capture market demand and to diversify crafts
products, main OVOP operators have established what they called as “contract system”
whereby they will engage smaller craft producers (normally housewife/working from home)
as their supplier. The system operated prior to the agreement obtained by OVOP operators from
B40 craftsman whereby they will be supplied raw materials (clay in sack), moulds for certain
type of potteries and machines (for polishing the product, baking and decorating process) and
guarantee buy back product from B40 craftsman. In a more conventional term, the B40
indirectly employed by M40 (OVOP operators). However, in this case in particular, the B40 is
given more freedom and working in their comfort space and at their convenient time, as long
as they could deliver to number of potteries assign to them at a given time.
The factor of “working in a less stress environment, more freedom and more time with family”
really attractive to the B40. Furthermore, many of the B40 are single mother or family with no
children live together (i.e. their children live elsewhere or migrate to other city or entering
boarding school). Therefore, they could use the ample time, or free time with more beneficial
activity including producing Labu Sayong for OVOP operators. Rather than spending money
after retirement, they are actually generate money/income from comfort of their home. For a
smaller family e.g. single mother with no children or older spouses they would prefer to buy
food for lunch and dinner from local restaurant from cooking at home because it is more
convenient.
In a way, the “contract system” offers a “win-win situation” between OVOP operators and
small B40 craftsman i.e. operator is able to fulfil demand or booking order from customers and
B40 can generate income through working from home and at their convenient time and
environment. Under contract system, B40 craftsman also free from business risk or potential
loses as they will receive raw materials, machines, training and quality check from operators.
On top of that, their product is guaranteed buy back from their supplier (OVOP operator). In
terms of monthly income from contract system, each small craftsman could earn between
RM700.00 to RM1, 200.00 depending on the amount of production. At the time being, demand
is consistently high for small decorative vase (small Labu Sayong) which used as door gift in
wedding ceremony. The biggest client is from local wedding planner as well as wedding
planner and event management companies from neighbouring state and from Kuala Lumpur.
The contract system also allow OVOP operator diversify their product and increase production
of various craft products by assigning different B40 craftsman to produce different kind of
potteries or Labu Sayong product. These small producers under contract will then deliver the
finished product to the sales gallery and be assembled with products from other small
producers. Based on preliminary observation, the contract system has great potential and bring
benefit to B40 households and other local and smaller craft producers through smart partnership
approach. As presented in Table 3.2, at least 35 small craft producers (majority of them is
considered as the B40 households) has been identified to reap benefit from establishment of
“contract system” offered by three OVOP operators through job creation and steady income
generation, as well as flexibility of working time and more convenient working environment.
30
Findings from field study indicated that all respondents own craft workshop, which allows
them to continue the production and maintain supply of craft product without need to entirely
dependent on smaller craft producers (under contract system). As stated in Figure 3.1, there are
also OVOP operators which did not opt for contract system especially small scale and small
capital operator. These small scale operators are more likely to maintain self-production and
market their products directly to the market. Moreover, some of the small operators only doing
the Labu Sayong business as a profitable part-time activity and their souvenir shop is managed
by the wife and located right in front of their house.
The study showed there are two main inputs that crucial for Labu Sayong production namely
clay (raw material) and moulds (for vase production/pottery). Raw material (clay) for Labu
Sayong production is currently supplied by three main clay traders from Kuala Bendang
village. However, there are few local Labu Sayong operators who own land at Kuala Bendang
village, also produced clay for own consumption. At the time being, only clay produced by
Kuala Bendang was acknowledged as the most suitable clay for producing good and high
quality Labu Sayong. On the contrary, the OVOP operators might risk their business into
market manipulation and price control by the clay traders. So far, the cost for clay is considered
low, ranging between RM6 to RM7 per sack (50 kg). The price given by traders is very much
depending on volume of clay ordered by Labu Sayong operators.
As for OVOP operators which own a land in Kuala Bendang, they are able to reduce cost for
raw material by produce their own clay supply for the Labu Sayong business. According to
Entrepreneur 1, many OVOP operators at the moment are comfortable to obtain their raw
material from local clay traders to avoid hustle and to reduce burden in processing their own
clay. Moreover, they wanted to maintain local business linkages and share economic benefit
with various stakeholders involves in Labu Sayong business. Based on current operation scale,
Entrepreneur 1 acquired between 50 to 60 sacks of clay per month, the highest to compared
with Entrepreneur 2 (30 to 40 sacks) and Entrepreneur 3 (20 to 40 sacks).
Second major input for Labu Sayong production is the supply mould (acuan). Based on
interview, majority of the Labu Sayong’s mould manufactures or suppliers are local
manufactures i.e. from Sayong and Kuala Bendang area. These manufactures are formal
apprentice in mould making course provided by government agency i.e. Kraftangan Malaysia.
After training, many of them are now capable to produce moulds and begun their own mould
manufacturing business. Among those who also joined the training course in mould making
are including OVOP operators (the workers and/or owner of the business itself). Therefore, for
all three respondents, they also producing and using about 30% of their own moulds especially
for basic and conventional vase (mostly water dispenser potteries). However, for a more
intricate models such as decoration lamp potteries and modern flower pots, they need to
purchase the moulds from local manufacturers. Price for moulds are varies, depending on the
size of mould and intricateness of the design. For instance, cost of mould for conventional
water dispenser is around RM20 to RM25 per unit depending on size. The price could increase
to RM150 per unit for a bigger mould vase with more intricate design.
31
Figure 3.1: Current OVOP (Labu Sayong) business ecosystem as observed in Kuala Kangsar.
Source: Author (2016)
Main Input: Clay Supplier (Tanah Liat) 1. There are three main
suppliers of clay, all from Kg. Kepala Bendang, Sayong (all respondents claimed that only clay from Kepala Bendang is suitable for production of Labu Sayong
2. Clay is bought in sack (guni)
3. Current price for each sack of clay is RM6-RM7, depending on the amount
of purchasing
Main Input: Tools and Machine (local suppliers and Kraftangan Malaysia) 1. Clay mixer 2. Oven / burner 3. Spinner (for finish
decoration)
4. Carving tools (by hands)
Craft Entrepreneur (Provider + Producer) 1. Owner of workshop 2. Hire local craftsman
(daily payment) 3. Owner of sales gallery 4. Establish business
networking 5. Risk taker
Local Craftsman (Bottom 40% households) 1. Work from home (cottage
industry) and at their own convenient time
2. Involve in contract system with entrepreneur
3. Receive main inputs (clay) and tools from entrepreneur
4. Involve in production 5. Did not involve in sales
and marketing (all products will be bought back by entrepreneur)
6. Did not hold business risk (guarantee buy back from entrepreneur)
7. Not oblige to maintain contract (provide more flexibility)
8. Provide income to households (as full time or part time job)
9. Can work at old age, convenient for single mother and mother with
small children
Craft Entrepreneur (Producer) 1. Owner of workshop 2. Hire local craftsman (daily
payment) 3. Owner of sales gallery 4. Establish business networking
5. Risk taker
Integration into local economy (Rural Tourism and Edu Tourism)
Offering unique visiting
experience/demonstration/hands-on
Human Resource Management
(Training) – provided by
Kraftangan Malaysia
“Global but Local” Establishing unique and
distinctive product for local and
global markets
Nurturing Entrepreneurial Spirit and Innovation
Training ground for young / new entrepreneurs
TYPE 1
TYPE 2
Delivering Quality Products and Services
Through business networking, marketing and promotion
Under contract system, one entrepreneur could be
linked/employed twenty (20) local craftsman to fulfil
demand
Normal production process for Labu
Sayong could take up to one week
from mixing, moulding, drying,
baking and finishing
touch/decorating Main Input: Mould (Local
manufacturers)
32
Source of Capital to Start Up Business
All respondents indicated that capital for starting up the business was generated through
internal funding, i.e. most of them was using their own savings. In addition, they also
highlighted their long term involvement in the business (some of them are the second and third
generation of Labu Sayong producer) and therefore, they have becoming more familiar with
business ecosystem and furthermore, they can leverage on the existing business network and
linkages established by their forefathers. Despite having difficulty in getting detail information
regarding main sources of funding other than respondents’ own saving/capital during the
interview was conducted, this study however, did not entirely reject the notion of other types
sources of funding or business capital were used by respondents. These might include financial
source or business capital generated through partnership with siblings/family members, or from
bank loans or development grant from government agencies and etc.
Considering all respondents were using their own money to start up the OVOP business, it can
be understood from the interview and field observation that the business had grown organically
i.e. expansion project for workshop and souvenir shop and purchasing of new moulds and
machines etc. often be carried out in stages, depending on the financial capability of each
operator. Although this approach might bring low yield to their business (slow productivity),
in a long run however, they will less dependent on personal loans or any kind of debts.
Throughout the expansion stage, operators normally will observe market situation and demand
for their product, venturing into new market segments, as well as expanding business network.
Market for OVOP (Labu Sayong) Products
Based on interview, two respondents i.e. Entrepreneur 1 and 3 have marketed their products
both to the local market as well as to the international market. Meanwhile, Entrepreneur 3
currently focusing on the local market. Local market for OVOP products are including
individual traders or souvenir merchants from Kuala Kangsar (within community/nearby town)
and also spread to neighbouring town such as private souvenir merchants at the North-South
Highway (PLUS) shops in Sungai Perak (RnR Sungai Perak) and Tapah. The craft products
also marketed to the major cities in the West Coast including Ipoh, Pulau Pinang, Negeri
Sembilan (Nilai 3) and Kuala Lumpur (Pasar Seni and sales gallery of Kraftangan Malaysia in
Jalan Conlay). International market for craft products are in Brunei and Japan. International
market however, is more seasonal in nature and did not generate stable and continuous long
term demand for the products.
At the time being, there are two new market segments for Labu Sayong products had been
linked to all respondents, namely (1) wedding management or wedding planning companies
and; (2) craft product wholesaler in Nilai 3, Negeri Sembilan. It is worth mention that Nilai 3
is a popular area for furniture products, carpet and other interior design and decoration items
that can be purchased at a wholesale price. Order for Labu Sayong from big clients especially
from Nilai 3 and various wedding planning companies has boosted demand for Labu Sayong
products from Kuala Kangsar.
33
3.4 KEY MOTIVATIONAL FACTORS FOR INVOLVEMENT IN OVOP BUSINESS
Figure 3.2: Key motivational factors for involvement in OVOP business
Source: Research fieldwork in 2016
Motivational
Factors
To gain freedom
in doing
something
To utilize skills
and knowledge
they posses
To have more time with
family and less stress
working environment
Family influence
in carry out
business
To earn better
income (income
stability)
Want to continue
working even at old age
To capitalise assets
and opportunities given
by OVOP operator
Motivational factors both for OVOP operators and B40
craftsman under contract system
Motivational factors mainly for B40 craftsman
34
Key Motivational Factors for Involvement in OVOP
Based on the interview, five (5) key motivational factors have been identified for their
involvement in OVOP (Labu Sayong) business. The detail list of these factors is presented in
Figure 3.2. These factors are applicable both for the OVOP operators as well as the B40
craftsman under contract system. Based on mentioned figure, majority of key factors are in a
form of non-economic factors i.e. closely related to socio-psychological components namely:
1. Respondents’ wanted the freedom in doing something/certain job, without many
restrictions including strict rules and regulations. For OVOP operators, live in the village
is simple and relax, and therefore having freedom in decision-making and have own control
over their business and work is very important to maintain strong work motivation. In
running the business, they have official working hour, normally from 9.00 a.m. to 6.00 p.m.
However, they given time discretions to their workers especially for those who have
children at kindergarten or school to come to workshop and shop after sending their
children to school or kindergarten in the morning and pick them up from school to their
home during afternoon. OVOP operators also feel freedom in exploring new products or to
promote new patterns for potteries to their customers as compared following customers’
requirements. For B40 craftsman under the contract system, they are free or allowed to use
their own creativity in colouring and decorating the potteries, as long as it was carried out
within the acceptance standard given by the operators.
2. Respondents’ wanted to make use of their skills and knowledge in Labu Sayong making
process through proper business venture/set up. Input from interview indicated that many
B40 craftsman under contract system choose to stay actively in Labu Sayong making
because they wanted to leverage of skills that they poses. Furthermore, they are doing the
job from comfort of their home. As for OVOP operators, they would prefer for the skills
and knowledge which they proses for generations in Labu Sayong making should not be
wasted without a proper business venture or entity. Establishing craft production and selling
company is crucial way to maintain local skills and knowledge in particular in Labu Sayong
businesses. Having own workshop and souvenir shop also encourage entrepreneurs to work
hard in realizing their thoughts and ideas into practice.
3. Respondents’ wanted to have more time with family while working in a less stress
environment. There is no doubt that managing craft business (workshop and souvenir shop)
could be daunt and hectic work especially during the peak season when new orders flowing
into the booking list and many orders need to be met and delivered. Based on interview,
the busiest season occurred during school holidays (in conjunction with many wedding and
engagement ceremonies) and after major festival/celebration such as Hari Raya and public
holidays. Pressure for producing more potteries for customers remain high, nevertheless,
using their long term experience dealing with similar situation each year, most of OVOP
operators somehow able to manage the supply and demand, and cope with the stress.
Outside peak season, OVOP operators normally have more flexible time with their family
and less stress working environment. As for the B40 craftsman, their engagement with the
contract system has directly maintain their workplace at home. The flexibility allowed them
to balance their personal life, daily housework routine and their work as craftsman.
35
Working from home, in a more comfortable and less stress environment has resulted in
improvement of efficiency of work and productivity. So far, based on feedbacks from
respondents, there is no big issue or conflict raised with smaller crafts producers under the
contract system.
4. Family influence in the business development. All respondents mentioned about their
inheritance of skills on Labu Sayong production from their parents and grandparents, which
given them motivation to bring the activity further by establishing a proper business entity
(or company). Furthermore, many of them already established a good business networks
with suppliers and customers from within and outside of the community. Having said that,
respondents merely need to leverage on these potentials and enhance the activity and
business relationship into next level i.e. moving from small scale and cottage industry
activity into proper and up to date workshop and souvenir shop.
The study also indicated the main motivational factor related to socio-economy aspect namely:
1. To earn better income and to enjoy income stability through OVOP activity. From the B40
craftsman point of view, their involvement with contract system has created a job for them
(in a more flexible and convenient working environment) hence enable them to earn a more
stable monthly income. Through contract system, the B40 craftsman will be given raw
materials and processing tools by the OVOP operators and in return, the operator will buy
back the product and they keep all the risk. Existing practice also stated that the B40
craftsman are not oblige or legally bind for a long-term contract and they are free to
withdraw from the contract under any unforeseen circumstance. Withdraw from contract
system however, rarely happen according to respondents due to flexibility and good rapport
established between the two parties. Under the contract system practice in OVOP activity,
the operators can minimise the risk for not able to fulfil mass order because now they have
many smaller craftsmen that will produce certain product for them to be delivered to the
customers.
Another two motivational factors mainly related to B40 craftsman involvements are including:
1. Want to continue working at old age. There are various age categories of B40 craftsman
involved in Labu Sayong production under contract system such as single mothers, single
parents and elderly people with less family commitment (all their children working/married
and move out to live somewhere else) and in turn, they have more free time at home. Due
to the nature of contract system which encourage them to continue work from home,
therefore, they would not reluctant to continue working at old age, under less stress working
environment and less family commitment and to earn some extra income from the activity
(Research fieldwork in 2016).
2. Want to capitalise own assets and facilities provided by OVOP operators. The contract
system permit the B40 craftsman to work from home, hence capitalising own
place/facilities (own house as a working place/workshop) with assistance from OVOP
operators (supplying raw materials, moulds and oven for baking) (Research fieldwork in
2016).
36
3.5 MAIN AND INFLUENTIAL REASONS FOR VENTURING INTO OVOP (LABU SAYONG POTTERIES) BUSINESS
Figure 3.3: Main reasons for venturing into OVOP (Labu Sayong potteries) business
Source: Research fieldwork in 2016
To leverage on
existing business
network
Reasons for
Venturing into
OVOP business
To utilize
existing skills
and knowledge
The business has
potential for
further expansion
Can be carried out
at small cost
/limited budget
Offering better
income prospect
Offering more flexibility
(can balance between
work and family)
To utilize assets and
opportunities given by
OVOP operator
Influential reasons both for OVOP operators and B40
craftsman under contract system
Influential reasons mainly for B40 craftsman
37
Main and Influential Reasons for Venturing into OVOP (Labu Sayong craft) Business
This study has identified five main and influential reasons for respondents to venture into
OVOP business. Details of this elements/reasons are presented in Figure 3.3.
1. To utilize existing skills and knowledge. Because of the long term involvement of
respondents in craft making industry/business, majority of them have possess relevant skills
and knowledge related to Labu Sayong business ecosystem (from production to marketing
of products). Therefore, it is expected for all respondents to mention about utilizing their
skills and knowledge as influential factor for venturing into OVOP business (Research
fieldwork in 2016). Their involvement also ensure relevant skills and knowledge can
sustain and be carried forward through training and knowledge sharing to the future
generations.
2. To leverage on existing business network. For respondents who previously worked as
skilled worker to an existing OVOP operators i.e. before starting up own business, they are
mostly wanted to leverage of the existing business networks. As for OVOP operators which
continue or inherit the business from their parents (or family business), they likely to
continue and to expand the business networks (Research fieldwork in 2016). Since
competition is tough in Labu Sayong business, having a strong and wide business networks
could bring various advantages for the OVOP operators including; (i) opportunity for
joining/participating in product showcasing and exhibition both locally and internationally,
(ii) supplying Labu Sayong product for special government functions (in big quantity), (iii)
participating in business matching activity, (iv) competing for development grants and
other incentives offered by government and/or non-government entities.
3. The business has potential for further expansion. All respondents also did mention about
the bright prospect for Labu Sayong business (Research fieldwork in 2016). With a better
penetration of ICT in rural area, enabling entrepreneurs to tap into local and international
markets via mobile and web applications. The use of website, Facebook and Wssap has
increased product and company’s visibility to the markets and to potential customers.
Despite keeping up to date with ICT, all respondents still maintain conventional method
for promoting and marketing of their products, mostly through distribution of brochures
and flyers to nearby hotels and restaurants that they knew famous among local and
international tourists (Research fieldwork in 2016). Labu Sayong businesses also gained
new tonic prior to the exposure to new market segment or niche market especially among
wedding planning and event management companies. This market has created huge
demand for Labu Sayong product as a souvenir or door gift. At the time being, large order
from wedding and event management companies is for small size Labu Sayong specially
made as gift/souvenir (Research fieldwork in 2016).
4. Offering better income prospect. Similar to answer given in the previous section (i.e.
motivational factor for joining OVOP), all respondents also highlighted the factor of
income generation from OVOP activity as one of the main reason for them to venture into
Labu Sayong business (Research fieldwork in 2016). With a growing demand for “unique
souvenir item at an affordable price”, order for OVOP product become steady over the
38
years. The demand and order from customers however, increased during school holiday
period due to increase number of wedding and other ceremonies. To cope with this demand,
OVOP operators will normally prepared early by increasing the production of popular types
of Labu Sayong (mini Labu Sayong) though contract system with B40 craftsman. At the
same time, their workshop will maintain the production for other types of Labu Sayong to
ensure they keep sufficient stock of Labu Sayong (Research fieldwork in 2016). With the
utilisation of ICT and conventional method for promoting and marketing of products, plus
the steady demand from wedding and event management companies, the business of Labu
Sayong making, potentially offering a better income prospect both for the OVOP operators
as well as for the B40 craftsman (under the contract system).
5. Can be carried out at small cost /limited budget. Another advantages of Labu Sayong
business is that, it is possible to be carried out at small cost or by those (committed
entrepreneurs) with a limited budget (Research fieldwork in 2016). The profound reason
for this is the cost for obtaining raw material (clay) is relatively cheap/low i.e. at around
RM6 to RM7/sack. For small operation, normally require up to 20 sacks of clay per month
or RM120 to RM140 per month. Meanwhile, the cost for mould could range between RM10
(for mini Labu Sayong) and it can go up to RM 20 (for big Labu Sayong/water dispenser).
Purchasing of mould is considered as a one-off cost because it can be used repeatedly over
time. For a small operation, approximately 40 to 50 moulds for mini Labu Sayong and
between 30 to 40 moulds for water dispenser Labu Sayong are needed (Research fieldwork
in 2016). Small scale operators normally did not employ worker i.e. operates by husband
and wife and/or closest relatives as part time helper. As a result, the overall operational cost
and labour are relatively cheap hence enabling the activity to be carried out at a limited
budget (Research fieldwork in 2016).
The fieldwork also identified two additional influential factors which mostly considered by the
B40 craftsman in venturing into OVOP business. These factors are:
1. To utilize assets and opportunities given by OVOP operator. Under contract system, each
B40 craftsman will receive and utilise necessary support from OVOP operators including
supply of raw materials, tool/oven and moulds for Labu Sayong making (Research
fieldwork in 2016). Furthermore, the B40 craftsman could integrate support from OVOP
operators through utilization of their skills and knowledge in craft making and the activity
can be operated in a small scale, low budget and at their own convenient environment. The
B40 craftsman can venture into Labu Sayong business without support or link to the OVOP
operators, however they might find it more challenging and more difficult in competing
with existing players in the market. Therefore, it would be wiser for them to opt for any
assistance that they can get especially on the supply of inputs for Labu Sayong production
(Research fieldwork in 2016).
2. Offering more flexibility in terms of time management (can achieve balance between work
and family). Most of B40 craftsman which involved in Labu Sayong making highlighted
the flexibility of working time/schedule as another main important factors in accepting the
contract system offered by the OVOP operators (Research fieldwork in 2016). Almost all
of the B40 craftsman are working at home (or termed as cottage industry activity), which
39
allow them to spend quality time with their family and to balance between work and their
family (cooking, housekeeping and sending or pick-up children/grandchildren at school,
etc.). This freedom or flexibility might not be enjoyed by those who work at the Labu
Sayong workshop or employed by the OVOP operators.
Labu Sayong production process (applied for both types of OVOP operators)
Based on the inputs from interview, this study has identified the following processes or stages
involved in the Labu Sayong craft production (Figure 3.4). The process is quite similar between
the OVOP operators (production at their own workshop) and the B40 craftsman (production
from home) (Research fieldwork in 2016).
Figure 3.4: Flowchart – process/stages in Labu Sayong production in Kuala Kangsar
Source: Research fieldwork in 2016
As shown in Figure 3.4, there are basically three (3) main stages for Labu Sayong production
and marketing processes, namely:
1. Planning and preparation stage. At this stage, the OVOP operators will plan the types of
Labu Sayong which they need to produce and the quantity involved (Research fieldwork in
2016). Normally what they do is by referring to the order book from customers and stock
inventory from their souvenir shop. Based on these two indicators, the OVOP operators
should be able to identify the quantity of raw materials (per sack of clay) as well as numbers
of moulds needed according to the types of Labu Sayong.
2. Execution or production stage. This is the most crucial stage in Labu Sayong process as it
would determine the production outcome, hence the capability of entrepreneurs to fulfil
order from customers and markets, and implication to income generation. The process
begin with (i) workers mixing the raw materials (clay and water) in a mixing drum,
followed by (ii) pouring liquid mixing into moulds, (iii) separation of moulds and collecting
wet potteries, (iv) polishing the unfinished potteries through getting rid of
excessed/unneeded wet clay, (v) decorating of wet potteries, (vi) outdoor drying process
Mixing of main ingredients
(Clay and water)
Preparation of moulds (cleaning and
organizing work
space)
Planning stage (decision on type of Labu Sayong to be produced / ordered
by customers, etc.)
Casting process (pouring mixing into
moulds)
How long??
Opening the moulds and touch up / polish unfinished product on spinning machine (to
remove excess
materials
Outdoor drying process (1 to 2 days depending
on weather)
Decoration process (pattern carving of
potteries on spinning
machine)
Baking process using electric / gas oven
(For 8 hours)
Outdoor/indoor cooling and
colouring/deco
Finished products are now ready for display
and delivery to customers
Planning stage Execution / Production stage Finished product
The whole cycle/process could take up to 6 or 7 days
40
(normally in 1 or 2 days) followed by, (vii) baking of potteries using industrial scale oven
(up to 8 hours baking) (viii) indoor cooling of potteries and (ix) final decoration (colouring
and/or glazing of potteries).
3. Sales and marketing of finished products. All potteries produced by the B40 craftsman and
from the workshop shall be delivered to the souvenir shop and displayed. Products which
ordered by customers shall be packed and make ready for delivery to customers and
markets (Research fieldwork in 2016).
Based on the interview, there are approximately six (6) or seven (7) days needed for the
craftsman and OVOP operators to complete the overall Labu Sayong processes before it is
ready to be delivered to customers and markets (Research fieldwork in 2016).
3.6 MAIN CHALLENGES OF OVOP (POTTERY) BUSINESS
The fieldwork has identified five main challenges of OVOP business (Labu Sayong) in Kuala
Kangsar namely:
1. Difficulty to maintain skilled workers
Labu Sayong can be both i.e. an inherit business and/or creation as a new form of
business by new comers/entrepreneurs. As experienced in Kuala Kangsar, many of the
new comers in fact, was actually a former/skilled worker and received training and
knowledge on the business from the existing Labu Sayong operators. After undergone
training and exposure in Labu Sayong making for many years under their “mentor” or
employer, these workers had acquired knowledge and skills which later on has enabled
and inspired some of them to venture into their own Labu Sayong business (Research
fieldwork in 2016). With all the main inputs for production of Labu Sayong are easily
available locally including clay from Kuala Bendang and moulds from local suppliers,
the new entrepreneurs has becoming more encouraged and motivated to starting up their
own business. This phenomena, in turn, has adding new comers and competitors into
the existing markets. This challenge is currently facing by all respondents of this study
(Research fieldwork in 2016).
2. Increased business competition at local level (from existing and new operators)
This issue is closely related to the previous challenge i.e. difficulty to maintain skilled
workers in the industry. Because the Labu Sayong business as discussed in the previous
section, can also be carried out even at a lower cost due to several reasons i.e. including
availability of cheap raw materials/clay and supply of moulds from local suppliers, has
motivated many new OVOP operators to participate in Laby Sayong business
(Research fieldwork in 2016). Many of them, based on the interview, were the former
workers or craftsman of a more established Labu Sayong operators. Adding new
competitors in a small market, and they all are selling the same Labu Sayong products,
in a long run, could jeopardise the viability and sustainability of the business itself.
Even though, from the customer point view they might enjoy variety of choices and
better negotiation on prices for souvenir products, tight competition among OVOP
41
operators on the other hand, might create a phenomena called “price war” in order to
lure customers in purchasing their products. Without proper control mechanism (or
through proper channel/business association in this case), the competition could
potentially lead to market distortion and manipulation by operators with large capital.
In a long run, smaller operators might suffer from lower low sales hence giving a lower
income to the business. Without sufficient income, it will tough for entrepreneurs to
cover all costs involved in their operation and in worst case, some of them might force
to cease their operation. Ceasing operation is not a good sign for local economy since
it might lead to job instability and income security to those who their livelihood are
largely depending on Labu Sayong business.
3. Ensuring current operation can fulfil market demand / customers’ order
Due to growing demand especially from the niche/new market segment i.e. from
wedding and event management companies for small potteries as door gifts and
souvenirs, the OVOP operators need to ensure that they could cope with current and
future demand for Labu Sayong products, both from the local and regional markets
(Research fieldwork in 2016). This phenomena poses a huge challenge to the Labu
Sayong entrepreneurs considering many of them are currently operating at a small and
medium scale, with limited capacity of production. Therefore, these operators will need
further assistance from related agencies in order to increase production capability hence
fulfilling orders from customers. Among types of assistance needed including, among
others are, to provide more development grants (supply of tools, moulds, extension of
workshop project, etc.). In addition, the entrepreneurs also need further assistance in
establishing new cooperation or business association for Labu Sayong operators in
Kuala Kangsar so that they could plan activities and systematically promote and market
Labu Sayong products (Research fieldwork in 2016).
4. Modern vs traditional approach in clay vase making
Growing demand especially from the mass market to some extent, has encourage
innovations in Labu Sayong business (Research fieldwork in 2016). These innovations
are including usage of moulds which fasten the production process, increase
productivity and allow Labu Sayong to be produced at various sizes but at a more
standard/uniform shapes and weights (Research fieldwork in 2016). From respondents’
point of view, the usage of modern approach i.e. moulds has fasten the production
process, using less labour and could ensure uniformity and standard of size for each
Labu Sayong. Traditional approach on the other hand (handmade process) might take
longer time, more labour intensive and challenging for maintaining standard or
uniformity of products which have been produced. Furthermore, with modern
approach, all respondents are able to control or check on the quality of the end products
they produced before it reach customers. As far as they are concern, customers in mass
market especially event management and wedding planners did not emphasis on artistic
value of Labu Sayong as long as it attractive enough to be included as part of door gift
souvenir during ceremony.
Form the researchers point of view however, shifting from traditional to modern
approach, without properly acknowledge the importance of maintaining traditional
42
values and skills in Labu Sayong making process, could undermine the trade itself.
Some visitors or tourists (especially international/enthusiast tourists), they might want
to see the authentic process in Labu Sayong making i.e. handmade process and the skills
and evidence of knowledge transfer for generations in potteries making. Unable to
maintain authenticity might lead to a notion that this business is no different with
factory that produce crafts and souvenirs (for a mass market). Therefore, striking a
balance between adoption of modern approach (to fulfil market and demand) and
traditional approach (to maintain the authenticity for tourism purposes) proved to be a
great challenge among OVOP operators in the study area (Research fieldwork in 2016).
Another element of innovation related to Labu Sayong business involving the
utilisation of information and communication technology (ICT) for the marketing and
promotion of Labu Sayong products (Research fieldwork in 2016). All respondents
have agreed that through ICT (website, Facebook and other types of social media), and
through coupled with conventional marketing through distribution of brochures and
flyers to hotels and restaurants in Kuala Kangsar, their products has been known by
many people both locally and internationally. These efforts in turn, has boosted sales
of products and bring more income to the business (Research fieldwork in 2016).
The study also uncovered an implicit challenge facing by the respondents namely:
Absent of strong local leader and business association to regulate and to protect
interest of OVOP entrepreneurs. At the time being, all entrepreneurs in study area are
operated independently or at their own (production, marketing and sales) with limited
or minimum cooperation between them (Research fieldwork in 2016). This factor is
considered as “implicit” by researchers since all respondents looks reluctant to discuss
this matter directly during the interview. All of them acknowledged the importance of
having business association as a platform to gather all Labu Sayong entrepreneurs and
operators in Kuala Kangsar. Through establishment of business association, members
could plan, organise and execute business plan, networking and partnerships in a more
systematic and coordinate manners, and at the same time could serve as a representative
that would protect the interest of Labu Sayong operators. The OVOP operators in
Sayong has previously associated themselves with Koperasi Kuala Bendang (Kuala
Bendang Cooperation), one of the earliest entity established to organise OVOP (Labu
Sayong) activity in Sayong, Kuala Kangsar (Research fieldwork in 2016). The function
of this cooperation however, did not last due to lack of support and absent of “local
champion” to lead the entity. Since then, majority of the Labu Sayong operators prefer
to operate independently, including establishing own business networking, conduct
marketing and promotion of products and penetrating market through partnerships with
government agency i.e. Kraftangan Malaysia and other interested parties (Research
fieldwork in 2016). All respondents, to some extent, acknowledged the need for a
business association (as shown by various types of business activities), however, in
terms of readiness, a lot of subsequent works need to be done to create awareness and
gain trust among OVOP operators to materialise the business association for Labu
Sayong entrepreneurs and operators for Kuala Kangsar in the future.
43
Main challenges facing by OVOP (pottery) operators and small scale craftsman (B40)
Figure 3.5: Main challenges facing by OVOP (Labu Sayong business) operators in Kuala Kangsar
Source: Research fieldwork in 2016
High chances for trained / skilled
workers to leave the company
and start up their own business
Competition (from
existing operators
and new operators)
Main Challenges
of OVOP
Modern vs
traditional
approach To maintain
skilled workers
in the business To ensure
operation can fulfil
market demand /
bookings
Mass production
+ mass market vs
Authenticity +
niche market
Challenge to maintain
standard/quality of
products & production
level
Absent of strong local
leader (weak business
association) to protect
interest of OVOP
entrepreneurs)
Uncoordinated
business networking
and partnerships
(with industries/
agencies etc.)
Implicit
44
3.7 SWOT ANALYSIS AND SYNTHESIS
SWOT analysis is carried out to summarise main findings and/or issues identified
during the field study. The analysis also permitted researchers detail out elements of strengths
(S), weaknesses (W), opportunities (O) and threats (T) identified during the field study. All
inputs with regards to S, W, O and T is then being transferred into a SWOT matrix table as
presented below. SWOT matrix table is organised in such way that it would allow researchers
to identify and suggest possible strategies or future planning to overcome the issues or
challenges. The proposed strategies was constructed by taking into considerations all elements
of socio-economic and environmental conditions of the subject matter, both from the internal
and external point of view.
SWOT
Analysis
INTERNAL
Strength Weakness
• The high number of Labu Sayong
operators in Kuala Kangsar (can meet
increase market demand in future)
• The Labu Sayong business fulfil the
criteria of OVOP
• Current practice through contract
system benefited B40 households direct
and indirect.
• Majority of Labu Sayong operators
adopted new/modern technologies to
increase productivity
• Traditional practices in decorating
process still maintain and continue
among younger generation
• The product already been acknowledge
under IDOP program
• Close guidance and assistance by
Kraftangan Malaysia (government
agencies responsible for training and
marketing of product)
• The absence of strong business
association to
formalised/organise activity
and assist Labu Sayong
operators (especially in
application of
development/business
extension grant, tools and
marketing of product)
• Many operators competing with
each other, producing and
selling similar products
EX
TE
RN
AL
Op
po
rtu
nit
y
• Widening the market
for Labu Sayong
product other than
conventional i.e. supply
to wedding planner as
door gift and for special
occasions
• Location of Labu
Sayong industry in
Kuala Kangsar can be
easily accessed via
North-South Highway
– greater accessibility
to markets
• Adoption of technology
(moulds and bigger
oven) increase
productivity and
uniformity of product
to suit customers’
standard
STRATEGY S-O
• Cooperation with other stakeholders
(government, investors, NGOs) related
to OVOP business through business
networking and mentor-mentee
• Determine operators which actively
engaged/employed/contracted B40
households into their business
ecosystem and provide much needed
assistance and facilitations to them
• Identify and facilitate process to uplift
income and quality of life of B40
through assistance for those who would
like to start their own OVOP business
STRATEGY W-O
• Establish new body/association
to safeguard the interest of Labu
Sayong operators
• Rejuvenate existing Kuala
Bendang Co-Operation to
systematically function and
assist operators and reduce
competition/conflicts through
facilities and training in the
management of business
45
SWOT
Analysis
INTERNAL
Strength Weakness
• The high number of Labu Sayong
operators in Kuala Kangsar (can meet
increase market demand in future)
• The Labu Sayong business fulfil the
criteria of OVOP
• Current practice through contract
system benefited B40 households direct
and indirect.
• Majority of Labu Sayong operators
adopted new/modern technologies to
increase productivity
• Traditional practices in decorating
process still maintain and continue
among younger generation
• The product already been acknowledge
under IDOP program
• Close guidance and assistance by
Kraftangan Malaysia (government
agencies responsible for training and
marketing of product)
• The absence of strong business
association to
formalised/organise activity
and assist Labu Sayong
operators (especially in
application of
development/business
extension grant, tools and
marketing of product)
• Many operators competing with
each other, producing and
selling similar products
Th
rea
t
• The sole producer /
supplier of clay is only
from Kuala Bendang.
Different types of soil is
not suitable for Labu
Sayong (highly
dependent of single
source for raw material
and could expose to
price manipulation)
• High dependency of the
usage of modern
technology may deter
local and traditional
practices/skills and
authenticity of product
STRATEGY S-T
• Identify new source of clay as to
diversify choices of clay supplier
• Bring back the traditional skills
(shaping the Labu Sayong by hands
rather than using moulds entirely) to
maintain authenticity of the product and
continuity of traditional practices
STRATEGY W-T
• Educate and awareness
campaign about balancing
between mass production and
the importance of maintaining
authenticity in production of
Labu Sayong using traditional
method
Source: Author (2016) based on research fieldwork in 2016
46
CHAPTER 4 THE WAY FORWARD
4.1 SUMMARY OF KEY FINDINGS
After undertaken all the processes involved including reviewing of literature,
conducting field study and data analysis and synthesis, the following table summarised the key
findings of this study.
Table 4.1: Summary of study’s key findings
Continued.
Review of literature explains the nature of OVOP (definition, basic principles) and the extent
to which the original OVOP Oita model has been adopted, modified and transformed for
community development throughout the world.
Many developing countries acknowledged the potential of OVOP plan in rural development
including (1) production of local products that reflect global flavour and standards; (2) emphasis
on human resource development and; (3) nurturing entrepreneurial among rural people.
Original OVOP model from Japan has been adopted in Malaysia together with series of
modifications to suit local context. From OVOP to ODOP (One District One Product) to ODOI
(One District One Industry). Only recently, the government begin to use to term “OVOP” in
discussing the potential of OVOP plan in improving livelihood of the Bottom 40% of low
income group in Malaysia.
Literature of literature however, did not establish deeper relationship or local practice in
Malaysia under a system called “contract system” as discovered in this study. The literature
review also unable to provide sufficient information that can be used to establish relationship
or linkages between OVOP operators or entrepreneurs with the B40 craftsman (or employee).
Information on the contract system might be relevant in this type of business or may be unique
to the study area. Nevertheless, findings from this study (contact system), would be useful as it
might be used to assist researchers and/or development agencies in broadening their
understanding on local OVOP business ecosystem beyond the scope and formal forms of OVOP
model suggested by the literature.
Rural entrepreneurs (Labu Sayong operators in this case) which involved in OVOP business has
indicated their openness to innovation through usage of technologies (ICT) for promotion and
marketing, and modern approach including the use of moulds to increase productivity, rapid
execution, hence to increase capability of business in fulfilling big customers order of craft
products.
Although there is some pros and cons emerged from adoption of modern approach in Labu
Sayong (pottery) making including the use of moulds to increase production (because the
operators need to cope with mass market), all respondents still maintain some authentic process
in Labu Sayong making through handmade decoration and painting of potteries.
47
Table 4.1: Continued.
Source: Author (2016)
4.2 RECOMMENDATION - PROPOSED OVOP FRAMEWORK FOR B40
HOUSEHOLDS
As a response to the pertinent issues, potentials and challenges identified during the field study,
this study has taken a step further by proposing the conceptual framework for OVOP
development especially for Labu Sayong project in Kuala Kangsar (refer to Figure 4.1). The
proposed framework could be considered as an initial roadmap for future works to realise
OVOP plan for fostering the livelihood of B40 group involved in Labu Sayong business and
other relevant stakeholders.
The proposed framework consists of three major action areas namely:
1. Establishment of the OVOP business model suitable for local context. Among
immediate actions proposed are the identification of the ‘local champion’ (leaders),
establishment of local organisation suitable for Labu Sayong project and formulation
of a special rural action plan (for OVOP entrepreneur) to address the needs and
readiness of stakeholders involved including OVOP operators and B40 craftsman under
contract system and possible actions in uplifting the livelihood of B40 households
through an inclusive development strategies.
There some few fundamental issues or challenges need to be highlighted regarding to the OVOP
plan for the study area namely (1) difficulty to maintain skilled and trained workers or craftsman
because some of them might quit their job to start up own business and become new competitor;
(2) increase competition in the market for souvenir products; (3) challenge in ensuring current
operation capable to meet orders from customers and; (4) dilemma for integrating modern and
traditional approach in Labu Sayong business (fulfilling customers’ order and maintaining the
authenticity of the process).
There is also an issue (implicit element) namely absent of a strong local leader to lead and
manage business association related to Labu Sayong in Kuala Kangsar. Without formal
organisation, there will be difficult to plan and organise activities including development grant
application, widening business network and conducting promotion and marketing of products
in a more systematic and collaborative ways.
Lack of integration with local universities and experts especially in sharing the current or
prolong issues pertaining their business and working in partnership with universities, experts
and agencies in finding practical/low-tech, affordable and timely solutions.
Government agency, particularly Kraftangan Malaysia (KM) played prominent role in nurturing
entrepreneurial spirits among local OVOP operators in Kuala Kangsar. Among program that
has been carried out by KM are including giving prospect to the product (invitation to Labu
Sayong operators to be involved in exhibition and showcasing of their products), and providing
development grants (including the supply of tools, machines and moulds) as well giving training
on mould making and decoration of Labu Sayong.
48
2. Integration of pottery (Labu Sayong) project into local economy via establishment of
strategic partnerships with various main stakeholders including the government
agencies, private sectors (investors), the non-government bodies (NGOs) and
experts/researchers from local and foreign universities and research institutions.
3. Delivering quality of product from local Labu Sayong project to local and global
markets through creative promotional and marketing strategies (with the adoption of
ICT), development of human resource (up to date knowledge and training) and self-
reliance and creativity.
Figure 4.1: Framework considerations for OVOP business (Labu Sayong) in Kuala Kangsar.
Source: Author (2016)
4.3 CONCLUSION AND FUTURE WORK
The road to uplift the livelihood of rural entrepreneurs and the B40 households through OVOP
business and OVOP-related business (crafts making/souvenirs) is not easy and always a
straight forward process, yet it is not an impossible task to be achieved. This study has identify
and discuss in great details on vital elements of OVOP, its attributes and influential factors that
were considered for the involvement in OVOP (Labu Sayong) businesses.
Inputs gathered from interviews and field observation indicating current Labu Sayong business
in Sayong in particular and Kuala Kangsar in general, reflecting a strong image of OVOP
concept as mentioned by the literature. In can be concluded that Labu Sayong (pottery) business
of Kuala Kangsar “is a production of a unique and distinctive local product that have been
accepted by both local and international markets; developed by local people based on local
49
ingenuity and with optimum use of local resources (raw materials and skilled labours) at an
optimum level” (Author in 2016). The presence and involvement of many local craftsman
(mostly the B40 households) under a “symbiotic-contract system” had enable the B40 local
craftsman and their family to enjoy various benefits including income and job stability; time
flexibility and ability to integrate both daily life and routine with their work load. As for the
OVOP operators, the contract system has enable them to spread benefits from the activity and
creating/maintaining local jobs among local people within the community. The system also
help them to increase productivity and fulfil customers’ order and diversifying the products
since they can assign different craftsman to produce different types of pottery (Research
fieldwork in 2016).
The study also uncovered some issues or challenges facing by respondents including the
difficulty to keep/maintain skilled workers in their company. It is often for skilled workers,
after spending some time with their former employer, learning and mastering the trade about
Labu Sayong, and then leaving the company to start up their own business. In rural society as
demonstrated in Sayong and Kuala Kangsar, there is no regulation or restriction to anyone who
would like to venture into Labu Sayong business. In a long run however, raising competition
and market saturation (too many operators in one particular place) might not be good for
business ecosystem. In addition, all Labu Sayong operators and entrepreneurs currently did not
establish formal business association to enhance business networking, organise and plan
activities for the common interest of all Labu Sayong operators in Kuala Kangsar. It is hoping
that in future, a more tangible and strong efforts can be undertaken to materialise the
establishment of OVOP business association for Labu Sayong operators in Kuala Kangsar.
In conclusion, Labu Sayong business in Kuala Kangsar had served its purpose as representing
unique and distinctive image for Kuala Kangsar and this is what OVOP concept is all about.
Local involvement in OVOP had enjoyed great socio-economic benefits which in turn, has
uplifting their standard of living and quality of life. The activity has created and maintained
local jobs (benefit local workers), providing stable income (due to steady flow of customers’
order/booking) and allowing more flexibility in terms of working environment which suit
scenario of rural community in the study area. The proposed framework for OVOP plan for
B40 as mentioned by researchers would be useful for further discussions through continuous
engagement with all stakeholders in future.
Even though the OVOP concept practices in Kuala Kangsar might not entirely replicate the
original OVOP concept from Japan, it still maintain the spirit of the concept while addressing
the uniqueness of local context and needs. Knowledge which gathered from this case study are
valuable where it can be learned and transferred to future research and for usage by any relevant
agencies that involved directly and/or indirectly in promoting and developing OVOP concept
in different rural society and places in Malaysia.
50
REFERENCES:
Radiah Abdul Kader, R., Mohamad, M. R. and Che Ibrahim, A. A. (2009). Success Factors for
Small Rural Entrepreneurs under the OneDistrict-One-Industry Programme in Malaysia,
Contemporary Management Research, Vol. 5, No. 2, June 2009, p. 147-162.
Claymone, Y. (2011). A Study on One Village One Product (OVOP) in Japan and Thailand as
an Alternative of Community Development in Indonesia: A Perspective on Japan and
Thailand. The International Journal of East Asian Studies, 01/2011. Available online
at: http://www.researchgate.net/profile/Yoopin_Claymone/publication/255801823_A_S
tudy_on_One_village_One_Product_Project_(OVOP)_in_Japan_and_Thailand_as_an_
Alternative_of_Community_Development_in_Indonesia_A_Perspective_on_Japan_and
_Thailand/links/00b49520b603a01e51000000
Claymone, Y. (2007). A study for Sustainable Local Development through One Town One
Product: An Overview of OTOP in Thailand, Paper was presented in International
OVOP Policy Association (IOPA) Conference, at Zhejiang University, Shanghai, China.
Cutaran, R, E. (2008). Sustainable Local Development through One Town One Product
(OTOP): the case of OTOP Movement in Mindanao, Philippines. Journal of OVOP
Policy, Vol. 1, October 2008, p.31-38.
Economic Planning Unit (EPU) (2015). The Eleven Malaysia Plan, 2016-2020. Available
online at: http://rmk11.epu.gov.my/pdf/Teks-Ucapan-RMK11.pdf
Fujioka, R. (2006). Learning from OVOP in Japan and OTOP in Thailand for the Application
to CLMV Countries’, paper presented at the workshop on Integrated Community
Development for the Mekong Region: “One Village One Product Movement in CLMV
Countries”. Asian Productivity Organizations: December 2006, p.1.
Igusa, K. (2010). Local Development and OVOP Movement in Oita, Japan: How Oita
challenged to form a new concept of local Development. Paper presented at the 1st Rural
Research and Planning Group (RRPG) Meeting 2010, UTM Skudai, Johor.
Kurokawa, K., Tembo, F and Velde, D. W. (2010). Challenges for the OVOP movement in
Sub-Saharan Africa
Kamal Salih, Muhammed Abdul Hamid and Lee Hwok Aun (2015). Towards inclusive
development in Malaysia, 11 June 2015, The Malaysian Insider: Side views. Assessed
at: http://www.themalaysianinsider.com/sideviews/article/towards-inclusive-
development-in-malaysia-kamal-salih
Kurokawa, K., Tembo, F. and te Velde, D. W. (2010). Challenges for the OVOP movement in
Sub-Saharan Africa – Insights from Malawi, Japan and Thailand. JICA-RI Working
Paper No. 18. JICA Research Institute, June 2010.
PEMANDU (2013). GTP Annual Report 2013 – Improving rural development. Prime Minister
Office Malaysia. Available online
at: http://www.pemandu.gov.my/gtp/upload/Eng_GTP2013_AR_Full.pdf
The Sun (2015). 1 Village 1 Product plan for B40 group mulled, 10 June 2015, page 16.
51
INDEX
A
Agglomeration 29,
Aging population 26,
Assets 45,
Authenticity 48,
B
Bottom 40, B40 1,
Craftsman 3, 36,
Households 29, 30, 36,
Bottom-up 20,
Business 35,
Ecosystem 35,
Competition 47,
C
Capital 39,
Challenges 47, 51,
Claymome 14,
Contract system 55,
Cottage industry 35,
Creativity 22,
D
Development 1,
E
Economic Planning Unit 1,
Entrepreneurial 7,
F
Field study 4,
Flowchart 46,
Framework 56,
Fujioka 3,
G
Global markets 14,
Government Transformation Program
1,
H
Handicraft 28,
Hayashi 16,
Hiramatsu 20,
Human resource development 18,
22,
I
Igusa 3, 30,
Inclusiveness 1,
INFRA 30,
K
Kamarudin 26,
Kraftangan Malaysia 55,
Kuala Kaangsar 29, 32,
L
Labu Sayong 29,
Local but global 18,
Local 7,
Enterprise 7,
Leadership 21, 49,
Champion 22,
Look East Policy 26,
M
Malawian OVOP 17,
Malaysia Plan 1,
Micro and small businesses 1,
Ministry of Rural and Regional
Development 3,
52
O
ODOI 17, 26, 28,
Concept 29,
Entrepreneurs 29,
Projects 29,
ODOP 26,
Oita prefecture 14,
One Village One Product, OVOP
Operators 3, 36,
Plan 8, 25
Practices 3,
Movement 19, 27,
Pilot project 26,
Projects 29, 30,
OTOP 17,
Out-migration
OVOI 17,
P
Pottery 47,
Q
Qualitative data 4,
Questionnaire-guided-interview 4,
R
Registrar of Company 35,
Resource management 28,
Revitalising 31,
Rural
Rural areas
Rural communities
Tourism 31,
S
SDSI 17,
Self-reliance 18,
Sustainable 3,
Farming 31,
Survey 4,
SWOT analysis 5, 52,
V
Venturing 43, 44,
53
Appendix 1 – Questionnaire (Survey of OVOP operators and the B40 craftsman)
54
55
© 2017 Universiti Teknologi Malaysia – All Rights Reserved
56
© 2017 Universiti Teknologi Malaysia – All Rights Reserved
57
© 2017 Universiti Teknologi Malaysia – All Rights Reserved
58
© 2017 Universiti Teknologi Malaysia – All Rights Reserved
59
Soalan 24 – 30 merupakan soalan temubual ringkas berstruktur bersama pengusaha 24. Bolehkah tuan/puan ceritakan secara ringkas tentang sejarah dan latar belakang perniagaan
Bagaimana boleh tertubuh?
Siapa yang terlibat/atas inisiatif siapa?
Sejarah yang diingati tentang kelompok ini (pencapaian, etc)? 25. Adakah produk yang dihasilkan menerima pensijilan tertentu (sijil halal, SME, GMP, etc)? 26. Adakah anda menerima bantuan oleh pihak lain (kerajaan / NGOs) berkaitan (modal / teknologi / alatan / pemasaran)? 27. Adakah perniagaan ini mempunyai/mengikuti garis panduan di dalam (Proses pembuatan produk? / Kawalan kualiti? / Skop tugas/Pekerjaan? / Keselamatan dan kesihatan? 28. Adakah anda memiliki pelanggan tetap? 29. Bagaimana anda mempromosikan produk/perkhidmatan? 30. Apakah perancangan masa depan untuk mengembangkan perniagaan?
Tiada perancangan khusus
Membeli peralatan moden / naiktaraf fasiliti
Menambah keluasan (saiz kilang / simpanan)
Mendapatkan pensijilan
Menarik perkongsian (cari rakan niaga)
Lain-lain
- SOALAN TAMAT - TERIMA KASIH DI ATAS KERJASAMA TUAN/PUAN TERHADAP SOAL SELIDIK INI
© 2017 Universiti Teknologi Malaysia – All Rights Reserved
60
Appendix 2: Conference Papers
1. Kamarudin, K. H., Saad, H. and Abd Wahid, S. A. (2016). Framework Considerations
for One Village One Product (OVOP) Plan for B40 Households in Rural Malaysia.
Paper presented in the Rural Research and Planning Group (RRPG) 7th International
Conference & Field Study in Malaysia, 15-17 August 2016, Johor Bahru, Malaysia
2. Kamarudin, K. H. and Ngah, I. (2015). One Village One Product (OVOP) Plan for
Orang Asli’s B40 Households: the case of Kelulut Honeybees Project of Kampung
Semelor, Gerik, Perak. Paper presented in the International Conference on
Sustainability Initiatives (ICSI) 2015 in conjunction with 8th ASEAN Environmental
Engineering Conference (AEEC), Kuala Lumpur, Malaysia, 24-25 August 2015
61
62
63
64
65
66
67
68
ONE VILLAGE ONE PRODUCT (OVOP) PLAN FOR ORANG ASLI’S B40
HOUSEHOLDS: THE CASE OF KELULUT HONEYBEES PROJECT OF
KAMPUNG SEMELOR, GERIK, PERAK
K. H. Kamarudin1* I. Ngah2
1 UTM Razak School of Engineering and Advanced Technology, Universiti Teknologi Malaysia
54100 Jalan Semarak, Kuala Lumpur, Malaysia, [email protected]
2 Centre for Innovative Planning and Development (CiPD), Universiti Teknologi Malaysia,
81310 Johor Bahru, Johor, Malaysia, [email protected]
SUMMARY: The main purpose of this paper is to determine the potential of One Village One Product
(OVOP) programme as an inclusive rural development tool to households in the bottom 40% of income (B40)
group. Kelulut honeybees project by the Orang Asli community of Kampung Semelor, Royal Belum-
Temengor Forest Complex (RBTFC), Gerik, Perak is chosen as the case study. Based on review of literature,
OVOP is a terminology used to send a clear message on local development initiative even to the non-educated
local residents. The term itself is representing a straight forward meaning of local development approach
whereby one community creates one marketable product by utilizing potential resources of the region, with
identical brand, by using own/local resources and brush up the product, upgrade the value, establish the own
brand, and merchandise in the wider markets (locally and globally). Furthermore, OVOP intended to promote
development of actual rural activities/products based on their current conditions i.e. capability for working as
collective unit and optimizing the use of local resources which the community are currently possess. With
various prospects that might be generated from the OVOP programme, and with an intensive focus to be given
towards diversification of rural economic activities and to improve socio-economic and well-being of B40
group under Government Transformation Programme (GTP) and the 11th Malaysia Plan (11MP), it is
becoming more crucial for a specific study to be planned and conducted to examine the potential application
of One Village One Product (OVOP) programme as one of rural development strategy for B40 group.
Keywords— B40; GTP, inclusive; OVOP, Royal Belum-Temengor Forest Complex, 11th Malaysia Plan.
INTRODUCTION
The Malaysia Human Development Report 2014 highlighted an urgent need for the government to tackle the
issue of Bottom 40 percent (or termed as B40 that is bottom 40% earned low income) through inclusive
development approach. The need for addressing the issue of B40 is further mentioned during the presentation
of 11th Malaysia Plan (11MP), 2016-2020 by the Honourable Prime Minister on May 20th 2015. The element
of inclusiveness has been included as one of six focus areas of 11MP. Based on 11MP report, inclusive
development strategy will directly address the need of B40 group as there are currently 2.7 million household
in Malaysia identified as B40 in year 2014. This is the group which according to the Economic Planning Unit
(EPU), vulnerable to issues of social exclusion, barriers to social mobility and economic insecurity in
development plans. The government has also set a target for income improvement for B40 from
RM2500/month in 2014 to more than RM5000/month by 2020. Under the same period, the Gini index is
targeted to decrease from 0.401 in 2014 to 0.385 (by 2020).
69
As a response to these targets, current and continuous initiatives for overcoming issue of rising cost of living
and to promote social justice were introduced by government under Government Transformation Programme
(GTP) such as 1Malaysia Clinic, 1Malaysia People Menu, 1Malaysia People Shop, 1Malaysia Textile Shop
and 1Malaysia People Agrobazaar Shop will be maintained and more facilities/services are to be developed
in other areas during the 11MP period. Apart from provision of necessary infrastructure and services, strategy
for rising the household income for B40 will be improved through education and training programmes aiming
at producing high skill workers. As for those who are keen to start their own businesses, the entrepreneurship
support programme will be provided to support micro and small businesses. With an intensive focus to be
given towards diversification of rural economic activities hence to improve socio-economic and well-being
of B40 group under GTP and 11MP, it is becoming more crucial for a specific study to be planned and
conducted to examine the potential application of One Village One Product (OVOP) programme as one of
rural development strategy for B40 group. The effort of extending OVOP programme for B40 group has been
highlighted in government’s recent development agenda:
“The (OVOP) programme is seen as being able to raise the income of villagers or the Bottom 40
group, as implemented in Korea, Japan and Thailand” (The Sun newspaper: 10/6/2015, p.16).
2. ONE VILLAGE ONE PRODUCT
“One village one product” is a simple and easy terminology used to send a clear message on local development
initiative even to the non-educated local residents. The term itself is representing a straight forward meaning
of local development approach whereby one community creates one marketable product by utilizing potential
resources of the region, with identical brand, by using own/local resources and brush up the product, upgrade
the value, establish the own brand, and merchandise in the global markets (Igusa, 2010). Furthermore, OVOP
intended to promote development of actual rural activities/products based on their current conditions i.e.
capability for working as collective unit and optimizing the use of local resources which the community are
currently possess.
Since its first introduction in Malaysia in 1992, using OVOP as local development approach has been
developed, implemented and showing signs of success in some cases locally as well as in other countries, for
example in Japan, in Thailand, in Sub-Saharan Africa and in the Philippines which may have value in Malaysia
where the Ministry of Rural and Regional Development (MRRD), Ministry of Finance (MoF), among other
agencies, may find value in such programme to realise their goals of developing rural societies in a more
inclusive and sustainable manner.
3. STUDY APPROACHES
In this study, Kampung Semelor is chosen as a case study considering it is the only village in Royal Belum-
Temengor Forest Complex (RBTFC) that is currently involved with the Kelulut honeybees project. The
location of Kampung Semelor is shown in Figure 1.
A preliminary site visit has been conducted in June 2014 to meet and built rapport with local community and
to gather basic information about the village. Information regarding background of village and profile of
households were derived from the village report. Meanwhile, information on socio-economic status, including
information related to the Kelulut honeybees project was gathered from interview sessions (unstructured
interview) with the head of the village and the head of households which presence during the site
visit (Figure 2).
70
Figure 1. Map of RBTFC and the study case (Kampung Semelor). Google Images.
Figure 2. Meeting with the head of the village and interview with local residents. Research Fieldwork in
2014.
4. PRELIMINARY FINDINGS
Based on field interview with the head of the village, the project was initiated by the Department of Orang
Asli Development in 2013 with participation of ten head of B40 households. Each participant was given basic
training on bee keeping exercise and honey extraction using simple and low-tech suction tools. After training
and short courses, each participant was provided with two moveable units of beehives to start their own
backyard Kelulut honeybees project (Figure 3). The first harvesting process for majority of participants begun
on mid-2014 and a small quantity of honey were extracted.
Based on the interview with the project’s participants, the following challenges of the project were identified
namely (1) the production of raw honey is low due to small number of beehives that is currently in operation
(participants are unable to purchase additional beehives due to financial constraint; (2) lack of follow-up by
responsible agency to monitor on the current progress of the project, hence the government is unable to gather
information or feedbacks regarding the retun of their investment (ROI) in the project and to identify post-
training issues and possible future needs of the project; (3) no establishment of proper marketing platform and
product distribution network.
71
Figure 3. Visit to the Kelulut honeybees project at Kampung Semelor. Research Fieldwork in 2014.
4. FRAMEWORK CONSIDERATIONS FOR OVOP PROGRAMME FOR KELULUT
HONEYBEES PROJECT
As a response to the pertinent issues and challenges identified during the field study, this paper has proposed
the following framework for OVOP plan for the Kelulut honeybees project (refer to Figure 4). The proposed
framework could be considered as an initial roadmap for future works to realise OVOP programme for B40
group in RBTFC.
The proposed framework consists of three major action areas namely:
(1) Establishment of the OVOP business model suitable for local context. Among immediate actions
proposed are the identification of the ‘local champion’ (leaders), establishment of local organisation
suitable for Kelulut honeybees project and formulation of a spcial rural action plan for Kampung Semelor
to address the needs of the project in particular, and to uplift the livelihood of B40 households through an
inclusive development strategies in general.
(2) Integration of Kelulut honeybees project into local economy via establishment of strategic partnerships
with various main stakeholders including the government agencies, private sectors (investors), the non-
government bodies (NGOs) and experts/researchers from local and foreign universities and research
institutions.
(3) Delivering quality of product from local Kelulut honeybees project to local and global markets ECT
through promotion and marketing, development of human resource and self-reliance and creativity.
72
REFERENCES
Igusa, K. (2009). Local Development and OVOP Movement in Oita, Japan: How Oita challenged to form a
new concept of local development. Rural Research and Planning Group International Meeting, 4th
October 2010. UTM Skudai, Malaysia.
The Sun newspaper: 10/6/2015, p.16.
Research fieldwork in 2014.
NOTE:
Paper presented at: International Conference on Sustainability Initiatives (ICSI) 2015 in conjunction with 8th ASEAN Environmental Engineering Conference (AEEC), Kuala Lumpur, Malaysia, 24-25 August 2015
73