Available Online : https://proceeding.researchsynergypress.com/index.php/cset/index RSF Conference Series: Engineering and Technology ISSN 2809-6843 (Online) | 2809-6878 (Print) Volume 2 Number 1 (2022): 95-103 Corresponding author Research Synergy Foundation aldo@del.ac.id; anna@del.ac.id; fitriani.silalahi@del.ac.id; rosni@del.ac.id; humasak@del.ac.id DOI : 10.31098/cset.v2i1.541 Industrial Agglomeration Analysis for Local Economic Growth (Case Study Medium-Large Industries at North Sumatera) Arnaldo M. Sinaga 1 , Mariana Simanjuntak 2 , Fitriani Tupa R. Silalahi 3 , Rosni Lumbantoruan 4 , Humasak A. T. Simanjuntak 5 1 Departemen of Applied science in Software Engineering Technology, Institut Teknologi Del, Indonesia 2 Departemen of Engineering Management, Institut Teknologi Del, Indonesia 3 Departemen of Engineering Management, Institut Teknologi Del, Indonesia 4 Departemen of Information System, Institut Teknologi Del, Indonesia 5 Departemen of Information System, Institut Teknologi Del, Indonesia Abstract The ideas for creating share value have been shown to improve economic performance. In this study, we aim to map the Location Quotients of Medium-Large Industries (IBS) agglomeration in North Sumatra and show how industrial agglomeration affects local economic growth and company performance. In this study, we use Location Quotients (LQ) index to measure the agglomeration of Medium-Large Industries (IBS) by district or city. The measurements were carried out in 34 regencies and cities in North Sumatra between 2017 and 2019. The results show that IBS agglomeration increased by 20.59% in 2017 and a steady increase by 23.53% in 2018 to 2019. The added value of this study is the expansion of the dominant logic co-creation concept, with the principle of industrial agglomeration able to assist companies in achieving sustainability and competitive advantage by promoting the creation of shared value, ranging from planning corporate resources to meeting the economic value for all stakeholders. Keywords: Industrial Agglomeration; Co-creation; Competence; Economic Performance This is an open access article under the CC–BY-NC license. INTRODUCTION Industrial agglomeration shows economic improvement on a city scale and Medium-Large Industries (IBS). It is impacted by technological advances as well as business and organizational life demands. Industrial agglomeration is expected to increase with the phenomenon of population inflows (or labor) and physical capital or infrastructure available in it (Song, 2010). The process of returning costs to the IBS scale (Industri Besar Sedang) can be done with local government cost efficiency; agglomeration economy; increased technological innovation of production; improved relationship between IBS and its economic structure. Increased scale of yield in the establishment of industrial agglomeration can occur in production activities, economic agglomeration, and geographic ecosystems dynamics (Song, 2010). Industrial agglomeration increases the acceleration of urban labor increases, resulting in the expansion of public infrastructure and intensified urban utilization (Tang et al., 2022). In other words, industry agglomeration is able to improve marketing performance. While other research states that industrial agglomeration tends not to directly improve marketing performance (Resbeut, Gugler, & Charoen, 2019). Industrial agglomeration not only creates new economic benefits but also greatly enhances the effects of handling environmental pollution (Xie, et al., 2019). Thus, there is a gap that provides the potential to continue this research. Another thing behind why this research is important is, there is an economic gap in industrial agglomeration areas with suburbs (Coe, 2016; Phelps & Ozawa, 2003). In addition, economic growth problems in North Sumatra showed that in the first quarter of 2021 recorded -1.85%, higher than the previous quarter of -2.94% (BI, 2021). As of the end of December 2021, it was up 2.5% to 3.3%. Overall, in 2021, the economy of North Sumatra is predicted to grow at a rate of 3% to 4.5% (BI, 2021). While in 2022 it is projected to grow in the range of 3.7% to 4.5% (IDXChannel, 2021). In terms of industrial