Identification of Determining Factors for Job Transitions that Trigger Economic Structure Changes in North Sulawesi Province

Abstract

The challenges of North Sulawesi Province lie in the difficulty of developing sustainable industries and economic structures in this region. With the evolution of technology and the growing government policies, factors such as online motorcycle taxi services (ojek online), village funds (dana desa), business and production incentives from the government, financial technology (fintech), and technological disruption have become increasingly crucial in reshaping the economic activities in Indonesia including the creation of new jobs, disruption in existing jobs, and job transitions. This research, however, aims to pinpoint the main drivers of job transitions after significant changes in technology and government policies. To our knowledge, this is the first study attempting to investigate what leads to a change in the profession or job of the actor of MSMEs considering individuals’ demography characteristics, public insurance, and the advent of technology in business. The findings of this study suggest that the fulfillment of electricity needs, personal income, and business income are among the determinants of the job transitions of individuals in North Sulawesi Province. Additionally, factors that can drive job transitions within the same industry or sector due to the presence of new technologies include age, ownership of the National Health Insurance (BPJS/KIS), and residential and workplace or school locations. Working or studying in urban areas increases the likelihood of changing professions or jobs within the same sector or industry. On the other hand, the results suggest that the factors above, along with marital status and higher education attainment, can also drive changes in professions or jobs in different industries or sectors due to the presence of new technologies.