Introduction

In recent decades, the roles of handicrafts and tourism as two main pillars of economic, cultural, and social development in urban and rural areas have received increasing attention. In the city of Sari and its peri-urban areas, these two sectors, relying on the region’s rich cultural, historical, and natural heritage, can provide a foundation for entrepreneurship, sustainable employment, and enhanced quality of life. Handicrafts symbolize cultural identity and indigenous creativity, while tourism, as a dynamic industry, can transfer economic vitality to peripheral regions by attracting investment and financial flows. The interaction between these two sectors offers significant potential for creating new job opportunities and sustainable growth. However, field studies in Sari reveal that despite abundant local talents, weaknesses in infrastructure, insufficient artisan training, and a lack of effective marketing have hindered the full utilization of these capacities. Therefore, this study aims to systematically analyze the role of handicrafts and tourism in entrepreneurship and employment generation in the peri-urban areas of Sari, and to identify the key factors influencing this process.



Methodology

This research is of a descriptive-correlational type with a quantitative approach. Data were collected through a researcher-made questionnaire and semi-structured interviews with 475 domestic and international tourists visiting handicraft markets and tourist attractions in the villages surrounding Sari. The samples were selected using cluster sampling across three weekly intervals to ensure temporal and spatial diversity. The questionnaire consisted of 45 items based on a Likert scale: 15 items measured the dependent variable (entrepreneurship and employment generation), and 30 items assessed the independent variable (development of handicrafts and tourism) across six main components: product diversity, production quality and innovation, market access and marketing, artisan training and empowerment, tourism infrastructure, and advertising and promotion of attractions. The reliability of the instrument was confirmed with a Cronbach’s alpha of 0.92. Data analysis was performed using SPSS software with Pearson correlation, multiple regression, and path analysis. The theoretical framework of the study was based on the dynamic process model by Moroz and Hindle (2012) to analyze the dynamic and multifaceted interactions among variables.



Results and discussion

The results showed that there is a positive and significant relationship between the development of handicrafts and tourism and entrepreneurship and employment generation in the peri-urban areas of Sari (r = 0.72, p < 0.01). In other words, any improvement in the conditions of handicrafts and tourism can directly enhance employment levels and entrepreneurial opportunities. Multivariate regression analysis indicated that five of the six main components explain 66% of the variance in entrepreneurship and employment generation. Among these, market access and marketing had the greatest direct effect (Beta = 0.47) on employment generation, while training and empowerment of artisans (Beta = 0.21) and advertising and promotion of attractions (Beta = 0.35) also played prominent roles. Quality and innovation in production had a positive and significant effect (Beta = 0.14), while product diversity had a weak but negative effect (Beta = -0.22) on the dependent variable, reflecting a relative dissatisfaction among tourists regarding the lack of variety or appeal of products. Considering indirect effects, the path analysis model showed that tourism infrastructure indirectly and significantly (0.20) influenced employment generation by enhancing other components. Overall, the greatest total effects were related to market access and marketing (0.58), training and empowerment of artisans (0.39), advertising and promotion of attractions (0.30), tourism infrastructure (0.20), quality and innovation in production (0.13), and finally product diversity (0.10).

From a socio-economic perspective, the findings indicated that increased skill levels, marketing education, and improved advertising facilities directly led to expanded job opportunities and entrepreneurial activity development in the peri-urban areas of Sari. Additionally, a strong linkage between marketing and artisan training as a complementary chain has strengthened the sales of local products nationally and internationally, while weaknesses in advertising and limited product diversity remain constraints to sustainable employment growth in these peri-urban areas.



Conclusion

Overall, handicrafts and tourism are complementary pillars of economic and cultural development in the peri-urban areas of Sari. The study showed that effective policies in the three domains of marketing, education, and advertising can yield the highest returns in strengthening employment and entrepreneurship. The most important finding is that market access and marketing are key drivers of the regional economic growth since even high-quality productions cannot create sustainable employment without viable markets. Next, artisan training and professional empowerment improve product quality and diversity, which, together with effective advertising and attraction promotion, can complete the supply and demand cycle in handicraft and tourism markets. Moreover, developing tourism infrastructure such as accommodations, transportation, and information centers indirectly supports market vitality and employment growth. Therefore, to achieve sustainable development in Sari’s peri-urban areas, policymakers must adopt a multidimensional approach simultaneously focused on skill enhancement, product quality improvement, creation of specialized and digital markets, and tourism infrastructure development. Financial support for artisans, digital marketing training, local branding, and the use of geographical indicators to preserve product authenticity are among the other recommended strategies of the study. Ultimately, this research emphasizes that the linkage between handicrafts and tourism is not only a factor for economic growth but also a foundation for preserving cultural heritage, social identity, and environmental sustainability in the peri-urban areas of Sari.