Abstract

In supporting inclusive and sustainable economic growth from the SDGs Program, Indonesia through the National Development Agenda (Nawacita) program takes a role in building border areas that are relatively isolated from relations with growth centers and centers of economic activity. The purpose of this paper is to formulate a sustainable local economic development (LED) strategy through a system approach, namely prospective analysis. Strategies developed based on scenarios that might occur in the future by considering the influence and dependence of key factors on competitiveness and performance. The results of prospective analysis are scenarios for developing LEDs through rural business incubator with an ability of technological innovation. This scenario is an optimistic scenario for establishing a rural business unit or known as BUMDes by taking into account the factors of competitiveness and performance. This scenario will occur if all the main competitiveness factors include technology innovation, rural business incubators, institutional cooperatives, product diversification and product marketing develop positively. Meanwhile, the operational recommendations from the chosen scenario are that the regional government needs to decide on a conducive policy to develop LEDs into professional and independent BUMDes. In addition, local governments need to operationally monitor and evaluate the main performance of BUMDes in order to increase economic growth in an inclusive and sustainable border region.