The Awareness of Intellectual Property Rights (IPRs) Regimes on Small and Medium Enterprises (SMEs) of Agricultural Products Processing at Malang Area, East Java Province, Indonesia

. The IPRs are dealing with the ethics of trading activities. Thus, it can affect the sustainability of business activities. The objective of this study was to identify the awareness and the knowledge of the IPRs regimes on the SMEs of agricultural products processing. The survey method was conducted on the SMEs that related to processing agricultural products, like fruit and vegetable chips, potato and tubers chips, beverages, herbs, meatballs, fried chicken, dodol, and others at Malang City, East Java, Indonesia. The qualitative method was applied for the collected data and analysis. The results showed that the SMEs employed around one to four people and the business specifications were on processed foods (77 %), beverages (5 %), and medicinal and herbal products (14 %). All SMEs agriculture processing products have a trademark/brand (100 %) for their products and 86% of the brand names were a new design made by the SMEs owners (50 %). But, unfortunately, around 64 % have not officially registered as the officer of the Directorate General Intellectual Property Rights, Republic of Indonesia. Hence, in the future need to encourage the SMEs for registering their IPRs to avoid IPRs problems and protected their innovation from infringements.


Introduction
Small and Medium Enterprises (SMEs) have an important role in the economic growth of the nation, especially in developing and developed countries.In Indonesia, SMEs have played a very significant role as an economic buffer in the 1997 to 1998 Indonesian monetary crisis.During the crisis, it was proven that SMEs were able to survive and even developed when the large-scale businesses were stagnant or collapsed due to the economic crisis at that time.Although in 1997 to 1998 the number of workers and SMEs were decreasing, in 1999 it was increasing rapidly where the large and medium companies were not able to rise quickly and some collapsed during the crisis.As reported by the Indonesia Statistics Central Bureau, the number of SMEs was decreasing to 39 765 110 in 1997 and in 1998 was 36 813 578 but increased rapidly in 1999 by 37 911723.A similar condition also occurred in the number of employment absorption that factually had been increased greater compare to 1997 by 65 601 591 labors, then 1998 was 64 313 573 and 1999 was increasing by 67 169 844 labors [1].
According to the Asian Development Bank (ADB), based on the Asia SME Finance Monitor (ASM) survey conducted in 20 countries from five of region 1 ADB showed that the number of SMEs were around 96 % of the total number of companies in these countries and 62 % of labor providers in the ASM country region.These ASM countries are including Central Asia, East Asia, South Asia, Southeast Asia, and the Pacific.While from the latest data SMEs' contribution was around 42 % to the gross domestic product (GDP) and given added value to the manufacturing industry in ASM countries (ADB 2015) [2].SMEs always influence the trading activities, like the People's Republic of China (PRC) and India were more than 40 % of total export value, followed by Thailand (26 %), the Republic of Korea (19 %), and Indonesia (16 %) [2].
In the European Union (EU) [3] was estimated that around 25.1 million SMEs in 2018 and most of them were micro-sized companies employing less than nine people.Then, 1 470 000 companies are small companies with 10 and 49 employees and around 236 000 are medium enterprises with 50 to 249 employees.SMEs are an important part of the EU economy and their economic value added varies between countries.For example, in Malta, 81 % of economic value-added came from SMEs, while in the Republic of Ireland only 41.7 % comes from SMEs.The average contribution of SMEs to the economic value of the EU is around 56 % and about 100 000 000 were employed by SMEs.In 2017 SMEs employed more than 94 000 000 workers in the EU or about 66 % of the workforce.In Europe's largest economic countries like Germany, SMEs employed 18 300 000 people, with more than 6 700 000 people employed by small companies alone [4].
According to the World Bank, SMEs play a major role in most of the country's economic systems, especially in developing countries.SMEs are the majority of businesses worldwide and are important contributors to job creation and global economic development.SMEs represent about 90 % of businesses and more than 50 % of jobs worldwide.Formal SMEs contribute up to 40 % of national income (GDP) in developing countries.These figures would be much higher if non-formal SMEs are included.The World Bank estimates that 600 000 000 jobs will be needed by 2030 to absorb a growing global workforce.It making SMEs will be the main priority to develop in many countries around the world.In the emerging markets, the majority of formal jobs are generated by SMEs, which create 7 in 10 jobs.However, access to finance is still a major obstacle to the growth of SMEs, thus financial support is an important issue for SMEs to develop their business facing emerging markets and countries development [5].
East Java Province is a region that has the second-largest business activity after the capital city of Jakarta and the biggest contributor is SMEs.The contribution of SMEs to Gross Regional Domestic Product (GRDP) reached 54.98 % or around IDR. 1 168 900 000 000 (USD 83 492 857).Besides, SMEs were also able to absorb the workforce of around 98 % and were dominated by around 187 SMEs (98.6 %).[6].On the other side, most SMEs are owned by individuals or limited liability companies, and the issues of Intellectual Property Rights (IPRs) are still not seriously considered.Since, if there is an infringement of IPRs, it can be a serious impact on the existence of SMEs.In East Java Province, especially in Malang Raya, according to the Maftuchah study [7], showed that even though all SMEs already have brands/trademarks, 88.89 % have not been registered at the Directorate General of Intellectual Property, the Ministry of Law and Human Rights.Hence, the use of brand names is still prone to infringement cases.The Indonesian Ministry of Cooperatives and Small Businesses has facilitated around 10 484 SMEs to obtain the IPRs, including copyright, trademark, geographical indications, patent rights, and industrial designs.Also provides technical assistance, through consulting clinics, assistance in filing registration forms, and rebuttals, and encourages SMEs to develop business strategies [8].But it is still slow in the number of registered SMEs.
The objective of this study was to know the awareness and knowledge of SMEs business owners regarding IPR regimes.This information is important because the Malang area is the biggest area of agriculture center in East Java Province, especially on horticultural products.Hence, this situation makes agricultural processing products industries based on food and beverage develop rapidly.

Study area
The research activity was carried out in the area of Malang City, East Java Province (Figure 1).Malang City is part of the Malang Raya region which consists of three areas, namely Malang Regency, Malang City, and Batu City.Malang City has an area of around 145.28 km 2 .Geographically, the Malang City area is between 07°46'48" to 08°46'42" South Latitude and 112°31'42" to 112°48'48" East Longitude [9].
Most area of Malang City is surrounded by mountains, like Arjuno, Anjasmoro, and Kawi, Thus, the Malang City area has a potential for tourism besides agricultural activities.

Materials
In this recent study, the authors used 22 small and medium enterprises (SMEs) located in Malang city.The SMEs were based on the processing of agricultural products, like food, beverage, and their derivates.Malang area was chosen as the location of the research because of the following reasons: i) Malang is one of the cities developed in the East Java Region, where there are many variations of industry (community-owned and entrepreneurs) with a variety of food products produced from agricultural products processing, ii) The population of Malang Raya is quite dense with a variety of social status and the level of education, iii) There was a change in the economic conditions of the community that quite significant in Malang Raya, where years ago Malang Raya was an area whose economy was dominated by agriculture activities, but currently, the economic income in Malang Raya was becoming variation.The main equipment used in this study included a laptop, calculator, logbook, and digital camera.

Methods
This research was conducted by survey method with purposive sampling.Purposeful sampling is a technique widely used in qualitative research for the identification and selection of information-rich cases for the most effective use of limited resources [10].This involves identifying and selecting individuals or groups of individuals who have special knowledge about or are experienced with the phenomenon of interest [11].Thus, the data obtained is more representative of conducting a competent research process in their field.

Data analysis
Data was collected in the form of primary and secondary data.The primary data was collected from the information about the SMEs in general, the location of the business, a description of their business, various business innovations, etc., which were get through field surveys.While the main activities of SMEs are based on the processed of agricultural products in Malang City.The number of SMEs to be surveyed was determined based on the initial information obtained from the Office of the Department of Industry.While the secondary data was obtained through interviews and extracting data from the Office of the Department of Industry and the Office of Department of Cooperatives and SMEs as implementing responsibilities and Drafting Regulations related to the SME's development.The secondary data was the documents that were relevant to many institutions related to SMEs activities.Data was collected through field observations with involved observations (participant observations); in-depth interviews; documentary method (documentary study) and sampling technique.The sampling technique used in this research was a purposive sampling of the area per sub-districts that justify the boundaries targeted for research activities.
The analysis data was based on qualitative data analysis that involves identifying, examining, and interpreting patterns and themes in the data and determining how these patterns and themes help answer the research questions at hand.The qualitative analysis focuses on cases (not variables).A case can be an individual person, a population, or an entire society, for example, a particular phenomenon (example stunting case).Comparative analysis between and across cases can be a great way to identify patterns in the data.Qualitative data analysis methods typically include (but are not limited to): Data documentation and data collection process; organization/categorization of data into concepts/themes; relationships between data to show how one concept/theme can affect another; examining the theory, by evaluating alternative explanations and looking for negative cases.The final report of any qualitative analysis may include a number of formats such as text, maps, charts, images and/or sound.Hence, in this study, the analysis data is based on qualitative analysis [10].

The SMEs employees
Table 1 shows the number of workers in SMEs in the Malang City area, 50 % of the number of SMEs in the processed food industry for agricultural products have only 1 to 3 people of workers.Meanwhile, the SMEs that have a worker of 5 to 10 people were 23 %.And only 5 % have a worker more than 50 persons.According to Napitupulu and Ginting [12], employees of SMEs in Indonesia are around 10 to 30 workers.This makes the relationship between each employee very close even like a family.They feel belonging to each other, furthermore, they feel belonging and are part of the company.Feeling a sense of belonging at work is about more than just feeling good and camaraderie.The sense of belonging is what allows employees to feel that they can be their true selves without fear of different treatment or punishment, and it has a big impact on performance and retention.
A successful organization regarding size or type of business must involve employees who have high potential, positive attitude, and dedication to doing their jobs well.Employee engagement is becoming more important for SMEs since they have fewer resources than large organizations.In Thailand, there are currently 2 900 000 SMEs, which constitute 99.6 % of all business entities and employ 10 500 000 people or 77.8 % of Thailand's total workforce.Although SMEs play an important role in the Thai Economy, most Thai SMEs still face many challenges limited competence and accessibility to funding sources, IT competence, government business promotion services, and global markets.Limited resource accessibility for SMEs results in high employee turnover rates.As a result, Thai SMEs must adopt meaningful HR management tools to enhance their long-term business sustainability [13].
In fact, for the long-term development, the economic strength of SMEs is not as strong as SOEs (State-Owned Enterprises), the anti-risk capability is weak, and the market share is not large.This will be a crucial issue that SMEs must reduce costs, increase market share and attract investment from constituents.At the same time, they have to guarantee the high quality of their products and earn customer loyalty.To achieve this end, SMEs need to improve relations with their employees who have always been the image of the company.If they are dissatisfied with their workplace and cannot concentrate on work, then they can damage the reputation company.Therefore, SMEs have to pay more attention to Employee Relationship Management (ERM) in order to build a good environment, provide any assistance for their work and life, and for ensuring job security.This will help companies to , 00004 (2023) https://doi.org/10.1051/e3sconf/202337400004E3S Web of Conferences 374 3 r d NRLS optimize relationships with employees, and to contribute the foundation for long-term development [14].
Most of the studies showed that employees in SMEs or large companies will experience an increased job engagement when they have a positive level of satisfaction.Employees who love their work will passion their work and have high involvement in the organization.The work-related feelings include salary or wages received in relation to other people employees, career, organizational structure, and others.Meanwhile, the feelings related to the employee itself include gender, age, education, ability, skills, and others.Hence, it must pay attention to these components and have certain policies or strategies regarding aspects of work satisfaction so that employees who work in SMEs have high engagement [15].

SMEs specification business products
Table 3 shows the percentage of business specifications and variation of SMEs products in Malang City.Data shows that 77 % of SMEs are engaged in processed food, like chili sauce, cooking spices, snacks (from various types of fruits), tempe chips, other processed foods (from fruit and vegetables, etc.) and 14 % run in the field of herbal medicine.SMEs engaged in the field of instant drinks about 1 % (Table 3).Since agriculture is an important sector in many countries in Asia, Shujog defines agriculture-related SMEs as businesses operating in the agricultural value chain [16].This includes the relationship between farmers and individual producers as long as they produce at a scale where they need capital and support services to grow their businesses.Fig. 2. Agriculture value chain model [16] Agri-food SMEs should realize the importance of building a strong inter-company supply chain facing competition in a global era that is currently complicated by the pandemic, changing customer needs, and the risks faced by industry players to meet , 00004 (2023) https://doi.org/10.1051/e3sconf/202337400004E3S Web of Conferences 374 3 r d NRLS customer needs.An empirical study was conducted using the QFD (Quality Function Deployment) approach to examine the relationship between different attributes in the agrifood supply chain in Indonesia where the main findings included: i. Fresh aroma, stock availability, and attractive bright colors were the three main needs of customers for the appearance of processed products.ii.The three highest risks were improper storage, harvest failure, and human resource risk.iii.The importance of continuous training, preventive maintenance, and supply chain prediction were the three main steps for SMEs to survive [17].
According to European Commission [18], the main product groups in the PAP (Processing Agriculture Product) sector are: i. Processed dairy products including some yogurts and dairy spreads; ii.Frozen fruit and vegetables; iii.Sugar confectionery, chocolate, and cereal-based processed products; iv.Various prepared foods and sauces; v. Non-alcoholic beverages and all alcoholic beverages except wine; vi.Tobacco products; and vii.Casein and processed starch products Halid's study [19] in Gorontalo, Sulawesi, Eastern Indonesia found that were 224 SMEs based on agriculture and only 24 units were in processed corn-based food products.This number was still small since Gorontalo Province is one of the corn-producing centers.Also, in terms of labor absorption, it was a small number.The average number of workers in SMEs for processed corn food products is only 2.96 per business unit, while SMEs for non-corn processed food products reach 4.39 per business unit.There were various types of processed corn products, namely sticks, dodol, pies, milled corn, flour, and corn rice.The SMEs that produce milled corn were the largest number, as many as 10 units or 41.67 % of the total SMEs corn.Furthermore, in terms of employment, SMEs that produce sticks and dodol have the highest employment, namely seven workers per business unit.
In the future, the processing industry still has promising prospects, hence it can still be used as a SMEs business model.Regarding with the needs to be considered for the processing industry business are business locations, permits, associations of industrial business actors, waste treatment facilities, product standardization, production characteristics that are customized or not, ownership status of business locations, technology and equipment used, human resources potential, business orientation, and competitors.

IPRs and SMEs agriculture processing products
Agricultural SMEs may exist in a number of different legal forms, the definitions of which may vary from country to country.The legal form of an agricultural company can determine or influence the governance structure, financial resources available, and the attractiveness of potential investors.
The needs of SMEs in agriculture may vary according to the function that they serve in the value chain in which they work.For example, SMEs focused on production may require financing for the purchase of inputs at the beginning of the harvest cycle, whereas SMEs in processing may require this capital at the end of harvest, to purchase products for processing.The type of help they need may also vary.For example, SMEs in agricultural inputs and technology may require laboratory testing facilities to test and validate their products, whereas SMEs in processing or trading may need access to high-value markets [20].
The primary means of commercializing IPRs is identified as the embodiment of IP in the product market made available through sales channels.The technology most frequently used in IPRs commercialization activities that are correlated with economic growth is the use of artificial intelligence, the use of online and cellular payments, and social networks to increase sales.Due to financial constraints, SMEs use free and proprietary software in their activities.This is potentially made trouble when its infringements of IPRs.Therefore, it is necessary to further understand the importance of protecting IPRs in trading activity, hence SMEs have no business problems in the future [20].
The various SMEs problems related to IPR protection, including i) The high cost of IPR registration, both for initial registration, an extension of the period of the expiration date (e.g., trademarks), and maintenance costs (e.g., on patents), ii) Lack of access to technology for SMEs, so the technology used generally not eligible for patent registration, iii) Narrow market access, iv) The quality of human resources, not aware of the importance of IPRs yet, v) needs serious attention from the government and continuous efforts to assist SMEs in IPRs ownership and IPRs protection, vi) Assistance from government institutions that are less organized and sustainable [16].
In the global of free trade, the protection of IPRs for SMEs is an inevitable need.IPRs are one of the important assets for SMEs to develop their business and provide high economic value.In addition, the IPRs ownership for SMEs is needed to prevent unfair competition from competitors, both domestically and abroad.IPR ownership for SMEs can increase added value, productivity, and quality of work, and provide competitiveness for SMEs themselves.
Table 4 shows the output percentage of SMEs' agriculture processing products in the Malang area.The potential for IPRs regimes of SMEs' in the Malang area is dominated by trademark/brands (38 %).In general, IPRs are divided into two categories, namely Copyright and Industrial Property Rights.Industrial Property Rights include Patents, Trademarks, Industrial Designs, Integrated Circuit Layout Designs, Trade Secrets, and Plant Varieties.The patent is the IPR regime related to technology.Trademark is a sign in the form of a picture, name, word, letters, numbers, color arrangement, or a combination of these elements, which has distinguishing power and is used in the activities of trading in goods or services (Indonesia Law No.15/2001).Industrial Design, is a creation of the shape, configuration, or composition of lines or colors, or lines and colors, or a combination thereof in three-dimensional or two-dimensional forms that give an aesthetic impression and can be realized in three-dimensional or two-dimensional patterns and can be used to produce a product, goods, industrial commodity, or handicraft (Indonesia Law No.31/2000).Meanwhile, a trade secret is information that is not known to the public in the field of technology and/or business, has economic value because it is useful in business activities, and is kept confidential by the owner of the trade secret (Indonesia Law No.30/2000).
To find out the need for IPRs protection for existing SMEs, it is necessary to understand the potential of SME business activities.Globally, the potential for IPRs in SME business activities includes Copyrights, Trademarks/Brand, Services, Industrial Designs, Regular Patents, and Simple Patents.Hence, the protection of IPRs required is not always similar for every business activity.Copyright is very dominant in the craft, fashion, and clothing industries, and processed food.The high potential for copyright in Malang is due to the three types of SMEs also rapidly developing in the Malang area.6).The process of making designs for these SMEs is mostly done by own design (50 %) and partly done by the printing company which is paid for by the owners of the SMEs' (45 %) (Table 7).
In the Malang area, about 64 % of the SMEs of agriculture processing products have not been registered to the Directorate General of IPRs, the Indonesia Ministry of Law and Human Rights and it was only 32 % have been registered (Table 8).However, about 41 % of SMEs stated the opinion need to register their trademarks with the Directorate General of IPRs (Table 9).Thus, it was a good condition where SMEs of agriculture processing products were aware of IPRs.Intangible assets such as brands, designs, patents, and data are increasingly important in today's knowledge economy.The Intellectual Property (IP) intensive industry accounts for 45 % of all GDP and 93 % of all EU exports, while value-added IP is growing in most of the European industrial ecosystem.Globally, IP applications are on the rise, as intangible assets play an increasing role in the global race for technology leadership.The action plan builds on the strengths of the European IP framework to ensure that it supports economic recovery and resilience in key economic areas [21].
A number of benefits for SMEs and the economy associated with the IP sector include: Increased sales; increased profits; increase business growth/capitalization; business contacts; cost savings; risk reduction; protection from the competition; acceleration of the process of commercialization of innovative products; obtaining additional investment (credit) for the main activities of SMEs; creation of new fields of activity/business, etc. [20].
The new action plan on IP has been published in 2020 by the EU [21] to assist companies, especially SMEs'.This action can make their inventions and creations benefit the European economy and society and ensure to protect their IP from infringement as well.IP is a key driver of economic growth since it will help companies to increase the value of their intangible assets.The action plan aims to enable Europe's creative and innovative industries to remain global leaders and to accelerate Europe's green and digital transition.The plan sets out the key steps for increasing IP protection; increasing the uptake of IP by SMEs; facilitating IP sharing to increase technology uptake in the industry; combating counterfeiting and improving enforcement of intellectual property rights and promoting a global level playing field.

Conclusion
SMEs processing agricultural products in Malang City, even though most of them already have brands/trademarks, most of them have not registered with the Copyright office.This may cause by various factors like limited knowledge and funding related to IP protection.Therefore, to overcome these obstacles, it is better if all economic sectors have tools to support SMEs like: government support in the form of subsidies and tax benefits; grants and credit for innovation projects with low-interest rates; organization of training; dissemination of information; and raising awareness in the field of IP.Many parties are expected to provide support in consultations on IP commercialization issues, training of SME representatives, and grant funding.
The author would like to thank the Rector of the University of Muhammadiyah Malang, Indonesia for research support through the Excellence Research Center Program.We also thank the SMEs in the Malang area, East Java, Indonesia for the cooperation and support of this research.

Fig. 1 .
Fig. 1.Map of study area.The arrow indicated of sampling area

Fig. 3 .
Fig. 3.The sample of SMEs on agriculture processing products, potato snack

Table 1 .
The employee number of SMEs in Malang City

Table 3 .
SMEs specification business products

Table 4 .
The outputs of SMEs in agriculture processing products

Table 5 .
The trademark/brand status ownership of SMEs

Table 6 .
The origin of design or logo of the SMEs trademark/brand

Table 7 .
The parties who create the design/logo for the SMEs' in the Malang area

Table 5
shows that all of the SMEs of agriculture processing products have a trademark or brand (100 %) and the percentage of origins design or logo of SMEs in Malang was

Table 8 .
The IPRs registered status of SMEs' agriculture processing products

Table 9 .
The SMEs' opinion related to need to register their brands/trademarks of IPRs