Impacts of disruptive innovation with the emergence of startups and startup users in the informal sector of Palembang City, Indonesia

¹ Universitas Gadjah Mada, Indonesia
² Universitas PGRI Palembang, Indonesia

^* Corresponding author: kikiaryaningrum@univpgri-palembang.ac.id

Abstract

This study aimed to explain the impacts of disruptive innovation with the emergence of startups and startup users in the informal sector in Palembang City. It employed a mixed-methods design. In the quantitative part, a questionnaire was used as a tool to collect data from 384 respondents, and statistical analyses in the forms of percentage calculation and cross-tabulations were conducted. In the qualitative method, an interview guide was used to gather data from 16 informants, and the data obtained were analyzed using data reduction, data display, conclusion drawing, and verification. The main results of the study are that the characteristics of startups and startup users within the city’s informal-sector worker population are businesses that rely on existing markets, bootstrapping, and are for profit. In addition, disruptive innovation has positive impacts, namely gaining more experience for startups and increasing revenue for startup users, and both startups and startup users experience no negative impact. The main conclusion drawn from these results is that startups and startup users run the same types of business based on the market used, source of funding, and motivation. Also, they feel different positive impacts of disruptive innovation but share the same experience about the negative impact.