Arman Hakim Nasution

This research aims to create a sustainable dynamic model concept towards the craft industry, which competes with each other in order to get the government budget allocation. The object of this research is superior industry (IU) from regional work unit. The regional work unit allocates its fund’s proportion of wood craft industry (IKA) by 51 percent and leather craft industry (IKU) by 49 percent. With almost equal portion, it turns out that the development result of IU has unequal proportion, which is 34 percent for IKA and 66 percent for IKU. This inequality indicates that there is a budgeting allocation, which is not based on performance. System dynamic simulation approach (SD) is conducted to predict the development of performance of both observation objects. In the phase of SD model development, Balanced Scoreboard (BSC) framework is used as a frame of development. The approach of ARCH-type model Success to Successful (StoS) is used as a concept of problem-solving. Several scenarios are formed in this research and needed as symbiosis redesign policy towards IKA product to increase the absorption of IKU product. Practical implications on sustainability of IKA and IKU are discussed in this research. The problem-solving can be applicable and replicable in Indonesia’s craft industry.