1
Social Entrepreneurship and It's Role Towards Poverty Reduction:
A Comparative Study between Indonesia and Thailand Context
Lieli Suharti, Roos Kities Andadari, Hani Sirine(Lieli.suharti@staff.uksw.edu, Roos.kities@staff.uksw.edu, hani.sirine@staff.uksw.edu) Faculty of Economics and Business, Satya Wacana Christian University, Indonesia
Soomboon Panyakom (spanyakom@gmail.com)
(Payab University, Chiang Mai Thailand)
Abstract
The importance of ASEAN Economics Community (AEC) sustainable development for ASEAN has been highlighted throughout the region. However, unemployment and poverty are still become part of the social problems in ASEAN countries, including Indonesia and Thailand. Social Entrepreneurship (SE) is believed as one of the ideal solutions to reduce the number of unemployment and poverty. Some prior studies suggest that SE may leads to significant changes in the social, political, and economic contexts for poor and marginalized groups.
This research aims to examine and analyze SE in Indonesia and Thailand context. The main purpose of the research is to find out whether local social enterprises can become drivers of poverty reduction in the region. More specific, the research questions of this study are:
1. How is SE evolved in the region?
2. What are the internal and external factors that drive the raise of SE in the region? 3. How does SE benefit for local people and poverty reduction?
The target population of this research involves SE in Indonesia and Thailand. The study design was a multiple case study. The study provides a comparative analysis of 6 cases of SE in each country. The results showed there are differences with regard to the emergence and development of SE in Indonesia with SE in Thailand. The study also found there are number of internal and external factors that pushed the raise of SE in the region. Finally, the results also showed that the SE provides many benefits to local community, among others in the form of employment, increased prosperity and increased quality of life of the local people.
Key words: Social entrepreneurship, poverty reduction, comparative study, Thailand, Indonesia
1. INTRODUCTION
2 As the leaders of ASEAN countries have officially announced, in 2015 the ASEAN economic community (AEC) is become one community under its motto: “One Vision, One identity, One
Community”. The Association of Southeast Asian Nations, aiming to be community of stable,
prosperous, and highly competitive region with equitable economic development, reduced poverty and socio-economic disparities (College of Management, 2012). However, the question is how AEC’s leaders should develop sustain economic in the region remained to be answered. Part of the reasons is because the members of the 10 countries of AEC remained great differences in relation to social, economic, education and environmental issues in the region.
The Asian Development Bank (ADB, 2012) recently reported that “developing Asia will largely maintain its growth momentum in the next couple of years despite weak global demand. From moderate 7.2% in 2011, growth in the region will ease 6.9% in 2012 before picking up to 7.3% in 2013”. In Southeast Asia alone would grow from 5.2% in 2012 to 5.7% in 2013. However, the ADB reported that despite the growth of economic in the region, the region is facing the greater disparity in between the ‘haves’ and ‘have nots’. This reflects a number of studies, for example, the United Nations Country Team in Thailand (2005, 2010; 2007; 2011) which repeatedly indicated that the development of economic in Thailand over the past ten years have not everyone been benefited. Some regions, for example, north and northeast, particularly vulnerable ethnic groups had been left behind. People in Bangkok, the Bangkok vicinity, and in regional growth areas, enjoyed much higher levels of human development than residents of isolated provinces in the north, northeast and deep South of Thailand. The disparity between the haves and have-nots became wider, the top fifth of the population earned 55.2% of the total income, while the bottom fifth earned only 4.3% of total income (United Nations Development Program, 2007, p.9). The top fifth of the population by income, received over half of all public spending on higher education (United Nations Development Program, 2007, p.9).
Disparity between the haves and have-nots also happen in Indonesia . Central Bureau of Statistics Indonesia reported that in March 2014 , the number of poor people in Indonesia reached 28.28 million people or approximately 11.25 % of total population in Indonesia. The number of poor people that live in urban areas reach 10.51 million (8.34 %), while, as much as 17.77 million poor people live in rural areas (14.17 %). These data demonstrate the high level of poverty population in Indonesia.
In general, interestingly half of Asia's poor people (total poor people in the region1.7 billion) live in rural areas earning for living less than $2 a day and yet 700 million of them live less then US$ 1 a day (Asian Development Bank, 2012). These low incomes consumers, constitutes a majority of the
region’s population and they make up what is called the base of economic pyramid /BOP (Elkington &
Hartigan, 2008). Other words, these people are the foundation of economical, social and environmental development in the region. They should receive the most benefits from the products of economical development particularly public spending than any other groups. In reality, as discussed above, however, they are the least group in the region receive the benefits. Consequently, the region has threaten and been in a risk of economic crisis and regional security for economical development in the region.
As the organization for Economic Co-operation and Development Assistance Committee (OECD)
had commented, “increasing economic growth is essential – but it is not enough. The quality of growth –
its sustainability, composition and equity is equally important”. Similarly, Kotler (2009, p.6-7) pointed
out that despite recent economic success the Asia-Pacific region, the region is home to two-thirds of the world poorest. Some two billion people are estimated to live on less than US$1 a day. How then if the new generation of Asian entrepreneurs extending their impact on society by addressing social needs to create profitable and sustainable business model?. What are the possible modalities for collaboration among the different actors if we are to promote inclusive job creation and sustainable development in ASEAN communities?
3 research are: 1). How is SE evolved in the region?; 2). What are the internal and external factors that drive the raise of SE in the region?; and 3). How does SE benefit for local people and poverty reduction?. Research findings will be used for promotion of social entrepreneurship model in the region and work towards a common understanding of social entrepreneurship as an alternative and innovative market-based bottom-up approach to achieve sustainable and equitable development throughout ASEAN countries. The goal of this research is to answer the general research question: can job creation and local social entrepreneurship be a driver of poverty reduction and stability throughout ASEAN communities.
2. LITERATURE REVIEW
Flyvbjerg (2001) argued part of the poverty and social crisis in today global society is because social value or virtue that holding people together are excluded and thus lead to social crisis. This indicates that unless the social movement and wisdom of community involvement, a single country or government to deal with the crisis is impossible (Wasi Prawase, 2006). It is culture which is the way of life of the community in accordance with the environmental one which consists of beliefs, value, making a living, traditions, aesthetical, healthcare, environment reservation and the management of resources properly for living together (Wasi Prawase, 2006).
Globally, there is a social movement of business practice which is known as CSR “Corporate Social Responsibility”. It can be argued that there are more and more business sectors and finances that running their business with social heart inclusion not money only. This is not only creating public happiness but also create profitable for the company (Wasi Prawase, 2006). However, most corporations claiming CSR are not always promote social aspects but they do so often for public relation (PR) and promotion while in reality they are not socially responsible.
The new social movement for socially practice innovation is known as “Social Entrepreneurship” (SE). In fact, the terms social entrepreneur and social entrepreneurship are not new but have been appeared in the literature on social change since the 1960s and 1970s (Krypa, 2014). However, the term social entrepreneurship, for Asia, is new and in fact they were not used until to economic crisis in 1997. Since then the term is used and often referred to the rapidly growing number of organizations that have created models for efficiently catering to basic human needs that existing markets and institutions have failed to satisfy. Social entrepreneurship combines the resourcefulness of traditional entrepreneurship with a mission to change society. Boschee & McClurg (2003) argue that one of most commonly quoted definition of “social entrepreneurship” today was formulated by Prof. J. Gregory Dees of Stanford University in 1998, whom outlines five factors that define social entrepreneurship:
• Adopting a mission to create and sustain social value (not just private value); • Recognising and relentlessly pursuing new opportunities to serve that mission;
• Engaging in a process of continuous innovation, adaptation, and learning;
• Acting boldly without being limited by resources currently in hand; and
• Exhibiting a heightened sense of accountability to the constituencies served and for the outcomes created.
The word ‘social’ is involved cultural driven and value practices in a society. A person enters to a
company does so because of needs. These needs generally include at least three major needs which include economical, social, spiritual and intellectual needs. According to Martin dan Osberg (2007), social entrepreneurship consists of three components as follows: (1) Identifying a stable but inherently unjust equilibrium that causes the exclusion, marginalization, or suffering of a segmen of humanity that lacks the financial means or political clout to achieve any trans- formative benefit on its own; (2) Identifying an opportunity in this unjust equilibrium, developing a sosial value proposition, and bringing
to bear challenging the stable state’s hegemony; and (3) Forging a new, stable equilibrium that releases
4 It has been a long debate that social and non-social aspects involve in making choice. Social aspects seek value based judgment for making decision while non-social aspect seeks prediction based judgment in making decision (Flyvbjerg, 2001). This is where virtue being held by people in society or community lost and thus making choice is no longer dependent on social aspects: cultural practices, traditional practices, values and other beliefs (Flyvbjerg, 2001,pp.2-5). A success business enterprise practice should not associate with social practices in a society. This is because the social responsibility of business is to increase its profits (Friedman, 1999, 2002). As a result, social values are lost a society or community (Flyvbjerg, 2001).
Local community is the foundation of national development. The sustainability of the country occurs when the foundation is strong. Community is real social life. The community based-economic is the real economy. It is life and economic for people to live together in balance. According to Prawase (2012), development must come first from the ‘base’ of a society and the base here is a ‘community’. The development can be resemble as building a Temple firstly from the top which cannot stand last long and easily collapse because there is no foundation (Prawase, 2008).
Social Entrepreneurship (SE), in contrast, is created for recognition of a social problem and the usages of entrepreneurial principles to organize, create and manage a social venture to achieve a desired social change (The Free Encyclopedia Wikipedia, 2012). The focus of SE is not performance for profit returning to stockholders but the performance for profit returning to society aiming to further broaden social, cultural, and environmental goals. SE led by social values. Other words, making choices are based on value judgment which is known as value rationality (Flyvbjerg, 1998, 2001). This indicates that SE is socially inclusive while seeking for profits maximization. This is well associated with the study of Flyvbrgy (2001) indicated that social inclusive is vital for any sustainable development of economic.
Social entrepreneurships is real practice of community based economic foundation. It grounded from the grassroots of people in society where are values based practices carried by community in society (Wasi Prawase, 2012). It is where unreasonable people found (Elkington & Hartigan, 2008). Social entrepreneurship may leads to significant changes in the social, political, and economic contexts for poor and marginalized groups (Alvord, Brown & Letts, 2004).
This research attempts to answer key research question of how social entrepreneurship is developed and how is shaping current economic and the future of nations throughout ASEAN? Can job creation and local social entrepreneurship be a driver of poverty reduction and stability throughout Asean countries?. To answer these questions, this research adapted localization theory as a guidance for this study.
Localization has been used in various contexts for development strategies including management, social development and so on. For example, marketing defines it as something along the lines of taking any product or service created in one local area and making it relevant to the local culture in another (Sikes, 2009). It treats individuals as "cultural beings", whose values and behaviours are shaped by the unique culture in which they live and grow (Hofstede, 1997). Sikes (2009) defines localization as ways of
adapting a product or service to a particular language, culture, and desired local “look-and-feel”.
Localization gives power to the local people to make choices for their community development. It is bottom-up or inside-out approach dealing with freedom and address the problem from within or the local. Localization is value practice that gives power to the local people. Sustainable development starts from within (Freire, 1993, p.26). According to Freire, development will never happen unless there is power that springs out from the weakness of the oppressed. In other words, sustainable development does not depart from outside-in but from inside-out of the oppressed (Covey, 1990). The oppressed as discussed can be individuals, groups or organizations. They may locate at homes, organizations, communities, Churches and so on. According to Flyvberg (2001, p.9), the extent to which the oppressed can be developed, is conditioned by the context where the oppressed is located. The context can be
languages, rules, tradition, supports, villages’ capacities, knowledge, skills, cooperation and beliefs.
5 organize, create and manage a social venture to achieve a desired social change. It led by social values. Other words, making choices are based on value judgment which is known as value rationality (Flyvbjerg, 1998, 2001; Alvord, Brown & Letts, 2004). To explain such social inclusive while seeking for profits maximization could not be done through the lens of globalization but through the lens of ‘localization’.
It is Social Entrepreneurship strategy that explains the validity of SE and the way SE should be
development in ‘AEC Society’ or ‘Global Society’ (Figure below). It explains the development of
organizations through the lens of Social aspect measurement (value rationality) of localization in Social Science practices not Social prediction aspect (prediction rationality) of globalization in predictive social science practices. A manager goes to local community. He or she starts business as community based business practices where are tradition, culture and social values always involved.
The ‘localization’ is Social Entrepreneurship business strategic development. It assists an entrepreneur practically development his or her enterprise holistically. It sees business world as socially constructed. It focuses on values where common views are practices. It exists for increasing capacity of individuals, organizations, and the society to think and act in the value rational terms (Flyvbjerg, 2001, pp.130-131).
Increased social problems and many efforts attempted by various parties have made the topic of social entrepreneurship to be more widely discussed. In the literatures a lot of definitions of social entrepreneurship have been found with different emphasis, but there is no agreement on what is meant by social entrepreneurship.
Konda et al (2015) give the definition of social entrepreneurship as a process, the logic of action, which may occur in the different organizational context: charitable organizations, commercial organizations, government organizations, community organizations, or through a new venture. It is characterized by a set of principles that are usually included in the scope of: focus on value creation, focus on innovation, not on the status quo, focus on sustainable solutions of the organization, and focus on the empowerment of participants in the value chain. The essence of social entrepreneurship is simultaneous action to detect and identify social problems, as well as using entrepreneurial principles to achieve positive social change. In fact, social entrepreneurship is social innovation, because social enterprise shows how successful combination between business and social issues and the environment can be achieved.
Yunus (2009) argues that there are new and exciting opportunities to implement social enterprises, and the market is becoming increasingly attractive and competitive. Rather than focusing on generating profits, social enterprises have a good purpose, in this way they act as a factor of change. They provide products, services, customers, markets, inflows and outflows. However, the guideline that underlies them is social utility. Yunus provides an alternative – the enterprise is geared to maximize profits, but is managed by the poor.
Meanwhile, Kostetska, I. and Berezyak, I. (2014) view that social entrepreneurship is an innovative form of business, which has successfully managed to combine social objectives and commercial practice. Social entrepreneurship has emerged as a response to chronic social problems such as unemployment, poverty, fragmentation of society, and others. Social entrepreneurship works where the government can not work (due to lack of funds), and the business is not going well (due to low profitability). Private funds and international public are devoted to the development and maintenance of social entrepreneurship. Schwab Foundation for Social Entrepreneurship (Switzerland), Skoll Foundation (USA) and Ashoka Foundation (India) define social entrepreneurs as an innovative business activity for the society progress and the restoration of social justice (Spreckley, 2011).
From the various definitions that exist, there are two important aspects to be emphasized in social entrepreneurship those are a social mission on one hand and business mission on the other hand.
6 occur, social entrepreneurship has a very important role to find solutions for social problems that arise in the community such as environmental issues, health issues, etc.
Though Social Entrepreneurship is essentially an Entepreneurship but it has different bases. Some authors identify the core characteristics of social entrepreneurs as follows, (Saifan, 2012):
- Mission leader and Persistent (Bomstein, 1998)
- Emotionally charged and Social value creator (Thomson et al, 2000) - Change agent, Highly accountable, Dedicated, Socially alert (Dees (1998) - Opinion leaders (Brincherhoff, 2009)
- Manager and leader (Leadbeater, 1997)
- Innovator and Initiative taker (Zahra et al, 2008)
Furthermore Saifan says that the unique characteristics of social entrepreneurs are: Mision leader; Emotionally charged; Change agent; Opinion leaders; Social value creator; Socially alerts; Manager; Visionary; Highly accountable.
3. RESEARCH METHOD
In examining the documentations, views and experiences of Social entrepreneurs in relation to job creation and economic community poverty reduction in the region, this research is conceptualized as an exploratory study. As Flyvberg (2004, p.422) suggests, an exploratory research could provide a wealth of information through the study of real-life situation. Similarly, Stake (1995) also indicates that an exploratory study could probe into the particularity and complexity of a social phenomenon, and thus enabling the researcher to understand not only the activities involved, but also the important surrounding circumstances. In other words, even with its exploratory nature, practical knowledge and understanding of particular contexts could be achieved satisfactorily (2001, p.66).
The target population of this research involves 4 countries in Asean region, they are: Thailand, Indonesia, Vietnam and Phillipines. These countries are chosen based on similarities and differences in terms of political, social, economical, and religious beliefs. For the first year, the research is focused in Thailand and Indonesia cases. Then in the second year, research region will be broaden to Phillipine and Vietnam countries.
The target population of this research in the first year involves SE in Indonesia and Thailand. The study design was a multiple case study, which provides a comparative analysis of 6 cases of SE in each country. The selection of the cases is based on three criterias: (1) they are SE; (2) they are influenced by the public policy in the country; 3) all of the SEs have been established in the last five years.
The data were collected using in-depth interviews which were guided by sets of questions concerning how the leaders perceive or feel committed to SE practices in the day to day operations.All interviews will be taped and if any questions needed to be clarified, this will be done by way of Skype or telephone calls back to participants to ensure that comments of groups are accurately recorded and interpreted.
4. FINDING AND DISCUSSION
4.1. Overview of the initiator and the SE activities to be studied
The results of this study were based on interviews and observations of 12 social entrepreneurs consisting of six social entrepreneurs in Indonesia and six social entrepreneurs in Thailand. The criteria for choosing the informants were based on local recognition of the achievements derived by the informants, some of which was indicated by the acquisition of award or other form of appreciation. The general profiles of the 12 informants of this study are presented in the table below.
7 established the enterprise in 2003, most of the founders of the social entrepreneurship field were male (4 of 6) employers, had formal education varied from primary school up to Bachelor. The type of business developed had relevance to the social problems in the community such as the problem of education (alternative school Qaryah Thayyibah), poverty alleviation due to crop failure caused by rat (Owl breeding Tyto Alba), the issue of waste and environment (the utilization of water hyacinth and natural batik dye), and the empowerment of women and the development of local potential for the well-being of local communities (tourist village). One interesting thing from a general overview of the social entrepreneurship actors was that almost all players had an idea for SE activities from social problems around them, in the area where they live day to day.
Table 2. Overview of the initiator of SE activities in Thailand No. SE Name WEAVE Thai Tribal Lanna
Master Bachleor Bachleor Bachleor High School Bachleor
4 Gender Female Male Male Male Male Male
5 Year of establishment
2012 2006 1990 2010 1999 2014
Source: Interview results, 2016
For social entrepreneurs in Thailand, it can be seen that the founders were mostly missionaries. So it can be understood if the movement of social entrepreneurship in Thailand has been started a long time ago. For example Lanna Café that has been started since 1990, when missionaries performed many services in Thailand. Based on this fact it can be seen that the types of social enterprise developed in Thailand were developed based on social problems encountered, especially for marginalized groups, such as refugees, alienated tribes in the remote area, poverty and equal rights issues.
8 informants from Thailand, Mr. Miang, who initiated the establishment a tourist village of "Mae kampong" although only had formal education of senior high school that he earned through distance learning program, but he had vision and insights no less that those who had higher formal education. This time after the concept of "Tourist Village" he built made a positive impact and is widely known, Mr. Miang is often invited to various universities and institutions to express His views and experiences in the field of social entrepreneurship. He has obtained a number of awards from the government and various other parties of His work in the field of social entrepreneurship.
4.2. Background of the Idea of Social Enterprises
Almost all background that became the motivation of the initiators to raise the idea of SE came from the social problems and issues developed in the region around. The social problems were generally related to poverty, education, health, all of which were felt directly by the SE initiators. One of the SE initiators in Indonesia, namely Bahruddin who initiated the Nature School "Qaryah Thayyibah revealed His background to make SE as follows:
"The farmers of my village live in poverty and do not have the bargaining power to determine their destiny. They have many problems such as irrigation problem related to Irrigation Public Work policy. In addition they face difficulties to enroll their children in school. So I invited the farmers in my area to develop the Society of Farmers Association in 1999, which aims to join forces to improve the productivity of their businesses through the transfer of ideas and experiences. The ultimate goal is to uplift the farmer level, triggered by economic problems. After this community ran, in 2003 I also invited people here to establish alternative school (junior high school, 3 years) for the children of farmers, organized by a system of "Living Context-Based", a learning system that is not as strict as a formal school generally, so as to stimulate the behavior of independence and creativity of students with IT support ".
In the case of Mr.Baharuddin, his reason to initiate SE was due to the problems of poverty and the weak position of the bargaining power of the farmers (small people) with the government as policy maker.
Background associated with poverty issues was expressed by almost all informants who were investigated for the case in Indonesia. For example Mr. Sutejo who is known as SE figure for his initiation in owl Tyto alba. He also expressed that the idea arose because could not bear to see the villagers of Tlogoweru village in which he became a village head, lived in poverty because they did not enjoy the harvest for many years due to pest rodents. He revealed:
"I am concerned with the economic slump of the villagers that the majority work as farmers (80%), because of rats. I made various efforts to overcome it, but never successful. In 2011 with a very hard struggle, through experiments and learning, I finally succeed to do the kind of owl breeding "Tyto Alba" to eradicate the rat pests because these kind of bird is a predator of rats. I asked the farmers in my village to make Rubuah (House of the Owls) as a settled nest of owls. As a result my village has been free of pest rodents"
The background of the emergence of other SE idea that was further uncovered from this study is the desire to maintain balance and environmental sustainability. It is implied clearly from the interview to Mrs. Chomsah, who developed clusters of water hyacinth, Mrs. Srini who developed female farmer groups for the cultivation of healthy organic plantation, and Mr. Sarwidi, batik craftsman who produced batik just by using natural dyes from nature. Then Mr. Yos also founded Yos Traditional Centre to keep and conserve the traditional local wisdom culture. Mr. Yos also found and helped the development of tourist village with the concept of eco-tourism. Mr. Yos outlined the reasons that made him work in SE as follows:
9 tourism, forged it through approach to the community, until the effort to educate the community independence. I raised the culture, nature, and tourism that had been untouched, with the motto of: Peace in Heart"
The similar background and motivation were found in the emergence of SE in Thailand. Social problems in communities attracted the attention of the SE initiators in Thailand were also revolved around the issued of poverty, low quality of life and also the problem of poor education. WEAVE fair trade Social Enterprise Organization, which was founded in 2012 in Chiang Mai Thailand, because of the condition of the refugees, especially women who were accommodated in Camp at the border area of Thailand and Burma for almost 30 years, they were isolated and consisted of about 120,000 people. Mong (Weave marketing manager) told the researchers:
"They should not be out of the camp area so that a lot of social problems appeared, such as poverty, health, education, self-confidence, and early marriage. Weave go there to improve the skills and capacities of women in the camp in terms of weaving, so as to fill the time, while increasing their income and welfare. It can also sustain local culture, the culture of weaving".
Other Social Enterprises in Thailand that were interviewed in the study were Lanna Café, Tobee bays, Tourist Village Mae khampung, Thai Tribal Craft Fair Trade.Co. Ltd, and Akha Ama Coffee, all of which were established with a mission to help alleviate poverty in the community or specific communities. Beside triggered by the poverty problem, environmental issue also received attention from SE in Thailand, such as the initiator of the Tourist Village Mae khampong which implemented eco tourism concept that considering the balance with nature.
The difference of the quite striking background of the emergence of SE idea between Thailand and Indonesia was the founders of SE in Thailand who were mostly missionaries, social workers, and church activists. It is thought to have implications on the broader scope of social issues (national) compared to SE in Indonesia whith regional or local scope. The target group of SE in Thailand could range from refugees to groups of hill tribes. In other hand, the target groups of SE in Indonesia in the study were more focused at the village level where the SE initiators come from. As a consequence, the social issues that were managed by SE in Thailand were also more complex than SE in Indonesia. It is increasingly clear from the explanation by Elias, the operational manager of Thai Tribal Craft Fair Trade.Co. Ltd, who said the following:
"We are focusing on indigenous groups that are widely available in mountain areas of Thailand who live in the mountains, and they live in poverty. Native tribes have skill in weaving as the characteristic among tribes, but they are unable to find a market. The mission of SE is to create employment opportunities for indigenous peoples who live in the mountains. Furthermore, it is expected that their level of income can also increased which will be followed by an increase in quality of life and better education.”
Summary of the study results on the background for the emergence of SE activities in Indonesia and Thailand is presented in the following table.
Table 3. The Background of the Emergence of SE Activities in Indonesia and in Thailand
SE in Indonesia SE In Thailand
1. Natural School “QaryahThayyibah”: Poverty of the farmers in the village Education problems of the Farmers in
which they do not have the bargaining power
1. WEAVE
Condition of the refugees, especially women who were accommodated at Camp in the border area of Thailand and Burma, they were isolated for almost 30 years
Many social problems, such as poverty, health, education, crisis of confidence, and early marriage 2. Tyto Alba
Poverty of the farmers because of pest rodents
2. Thai Tribal
10 Citizens do not have a second job They could weave but were not able to market the
products 3. Water Hyacinth Handicraft Cluster
Disturbance of the water hyacinth weed in Rawa Pening
Poverty and unemployment
3. Lanna Café & Coffee
The underdeveloped condition of the community (low income, low education and sanitation and poor health)
4. Women Farmers Group 'Merapi Asri' Cultivation of plants by using chemical
fertilizers and other cultivated plants are undeveloped
Poverty and low education awareness Plenty of free time for women in the village
4. Akha Ama
Poverty in the village where he came from. Akha is a tribe in Thailand
After Lee was graduated from the University, he was the only person who had university education in his village. He was called to help boost the economy in village communities by focusing on plant that grows a lot there, i.e. coffee.
5. Natural Batik Sarwidi
Concerned about the life of batik workers whose wages were low and not growing Concerned with batik industry in his village
that was not growing rapidly, and low adding valud
Poverty and high unemployment
5. Mae khampung
Conditions in this village with the only source of income depends on the type of local plant (miang), caused the villagers lived in poverty.
In 1996 Miang was elected as a head of the village, and developed a village that has a wealth of natural resources such as waterfalls and natural forest, became a tourist village with the concept of eco tourism
6. Yos Tradisional Centre
Concerned with the many cultural
value/local wisdom value in Indonesia which was less maintained and preserved
Local potentials that have not been noticed and managed to provide welfare to the people around
7. To bee bays
The poor condition of the Karen (tribal) with their work of cutting down trees
As a result there were many problems of poverty, poor education and poor health conditions in the Karen community
Source: Interview results , 2016
4.3. The Benefits of Social Entreprises for the Community
The purpose of Social Enterprise is to address the social problems in the community as the background of SE establishment. Even in macro level, the role of SE is supposed to have an impact on poverty reduction, or in other words SE can improve the welfare of the society. In this study, based on the observations and interviews with the informants, we obtained a number of positive impacts from SE.
One benefit of the SE movement commonly found was that SE could provide employment opportunities through the emergence of new job opportunities being offered. This benefit included the
member of Water Hyacinth Handicraft Cluster
"Klinting" which recognized to get a second job to make handicrafts from water hyacinth to fill their spare time productively. The same thing was also felt by the female members of farmers group formed by Mrs. Srini, that now they could spare time with cultivation of organic vegetables. The opening of new employment opportunities from SE was also told by the Tlogoweru villagers, as follows:
"In past, our time ran out to hunt rats, but now because rats are gone, then we can spend time on other productive activities such as farming and trade. After this village became a tourist village, it opened the opportunity for us to do culinary, home stay and other businesses"
11 Table 4. SE benefits for Communities in Indonesia
No. Description Impact on Society
1 Nature School "Qaryah Thayyibah
Increased team spirit and creativity of the community
Increased study spirit and increasing the quality of public education
Became a source of the inspiration for other communities with regard to nature-based education system
2 Tyto Alba Increased agricultural productivity, farmers could harvest again because the rat was able to be controlled
Improvement of the well-being of Farmers and the general population. Time used to hunt rats can be used for other productive activities. As a result, people's purchasing power was increased, they were able to make a home, and educate children.
Became a tourist village and created new jobs: Tlogoweru Village finally received the title as a Tourist Village, and there was a progress in the infrastructure and facilities in the village, all of which will benefit the community Became the initiator for other communities
3 Water Hyacinth Handicraft Cluster "Klinting"
Involved to overcome the problem of water hyacinth weed in Rawa Pening The water hyacinth on the surface area can be reduced so that fishermen can community on how to produce better products from water hyacinth, and assisted the marketing of products that have been produced, community had another source of revenue. So it could be used to improve the quality of family life such as diet, as well as education.
4 Women Farmers Group 'Merapi Asri'
Opened employment opportunities for women in rural households Increased the income and quality of life of the community
Opened a network for marketing agricultural products to export markets (baby green beans)
Increased awareness and knowledge of farmers on innovations in the cultivation of horticultural crops of the farmers
5 Natural Batik Sarwidi
Created jobs for the people around jarum Village, Bayat became Tourist Village in 2014). This created a better economy because of the emerging of homestay,
Found and developed tourist villages with the concept of Peace in heart Source: Interview results, 2016
12 Table 5. SE Benefits for the Community in Thailand
No. Description Impact on Society
1 Weave The refugees living in Camp at border area of Thailand and Burma and Hill-tribe women in Northern Thai villages who were marginalized / disadvantaged could fill the time and earn revenue.
2 Thai Tribal Increased the income of the remote tribe
3 Lana Coffee Increased income, education, and health condition
4 Akha Hama Beside increasing income, the farmers have more courage to produce consistent high quality coffee. Farmers in Chiang Rai region, the region which is the origin of Mr. Lee, had increased income, increased sources of income, increased knowledge, increased willingness to learn.
5 Mae khampong
Increased income through improving local economic activities, better knowledge, better education and better health knowledge and condition
6 Tobee bays Improved economic welfare, education and health of the Karen community in Thailand &Strengthen the relationship among the Karen tribe worldwide Source: Interview results, 2016
4.6. Analysis and Discussion
The theory of localization (Covey, 1990) states that a social entrepreneur is emerged from local people who understand the social problems faced by a social group in the community and want to contribute to find solutions for the community. This occurs in social entrepreneurship in Indonesia and Thailand. In Indonesia, all respondents of initiators of social enterprises were local Indonesian people even the majority came from the place where the problems arose. For example Bachrudin who were born and grown in Kalibening village, he was called to solve the problems of education which was considered expensive and unsatisfactory, and al so Sutejo who was born in Mranggen Village Semarang, who was called to solve the problem of poverty faced by the community because of the rats attack that made farmers could not have harvest. Meanwhile in Thailand, the founders of social entrepreneurship were local people and missionaries who came from foreign countries. Local people such as Lee and Miang were called to solve the problem of poverty in the communities where they were born and grown. Meanwhile the missionaries came to Thailand because of their high commitment to humanitarian issues including addressing the issue of poverty of the refugees group that became a concern by international agencies such as UNHCR.
In general, the characteristics owned by a social entrepreneur are just the same as general entrepreneur, i.e. the ability to read opportunities, innovative creative, and courage to take risks. The different thing is the vision of the activity. On entrepreneurship, the vision of making a profit became the main driver of the entrepreneurs in creating businesses while at social entrepreneurship the main drives is a combination of social vision and business vision. In other words, they do business because they want to achieve social goals. During this time many social activities carried out by NGOs by relying on the funding from the donors. Dependence on donors make the continuity of social activity is often compromised. Some respondents said that the charity will not last to be able to fund their social activities and therefore they had to seek sources of funding that can be expected in long term such as through social enterprise.
13 guilty when they have succeeded in changing their social life while many other people from the same or different community still entangled with difficulties. Background and parenting pattern that teach positive values also form a struggle power of someone, not easily discouraged, and willingness to share. Education and experience also contribute to the ability and the courage to start a social enterprise.
Meanwhile the organization's environment, social environment and the economic environment can create a conducive atmosphere to the SE initiator to start a social enterprise. Some social entrepreneurs were inspired to start their business because they ever worked as a social worker or in social institutions. Several other entrepreneurs started SE for assignment given by the churches or international NGOs.
The core issues that drove the emergence of social enterprise in Indonesia and Thailand were actually the same, although there were different levels of complexity. In Indonesia, the SE initiators were not generally formalized the institutional efforts and the worked by focusing on addressing the problems faced by the community. This may be due to limited funding, which generally rely on the financial support of the SE initiators or the absence of power owned by the initiators. In the development of tourist village, SE played role as a motivator, coordinator and facilitator to be able to access the sources of funding available in the government. In Thailand, SE activities were originally done informally but then social enterprises were legalized into a formal company. The six SEs studied were formal business, including Tobee bay in the form of cooperative. In Thailand, the approach used to address the problems faced by the society was more integrated. For example, to increase revenue, they also targeted the improvement of health and education. Again, the availability of funds and the authority possessed by the entrepreneurs will determine. Legality is probably encouraged the SE initiators in Thailand to apply the principles of business management more professionally.
SE in both countries in the development had a different scale of activities. In Indonesia, the scale of activities remained at the local level, while in Thailand a scale of SE activities became larger and many of them became international. English proficiency was one factor in which the SE initiators were able to develop an international network to benefit the SE development. English proficiency was recognized by some social entrepreneurs as a key factor in the success of social enterprise to develop a network. This capability was also supported by the international experience of the social entrepreneurs. English proficiency of the initiator or main managers of the social enterprises can be a key because it enables the wider communication with many parties.
Compared to Indonesia, social problems faced by social enterprises in Thailand were complex and heavy although they came to one goal, namely an increase in target public welfare (economic, education, health). From the social enterprise case in Thailand, the characteristics of the social entrepreneur can be grouped into 3 major groups namely mindset, managerial and skill. With regard to the mindset, social entrepreneurs are demanded to be visionary, innovator, being a change agent. They are required to have managerial skills in business management. Meanwhile with regard to skill, it includes communication skills such as the ability to speak English, the ability to establish relationships (networking skill), as well as technical skill as the ability to understand a quality product and a good process.
14 result, the farmer decided to resign from the agreement and the SE initiator finally forced to look for a buyer who can accommodate the farmers.
Table 6. Internal motivating factors for SE in Indonesia and SE in Thailand
Indonesia Thailand
Poverty experienced by the certain people Poverty experienced by the certain people Family education causes the growth of high
fighting spirit
Family education causes the growth of high fighting spirit
Experience increased the sensitivity of certain people to see the social problems faced
Experience increased the sensitivity of certain people to see the social problems faced
Has extensive network Has extensive network
The ability to speak English so as to expand the network Local/regional network scale The network scale can develop into an international
network
The ability to think critically and strategically The ability to think critically and strategically Creative and innovative Creative and innovative
Not easily discouraged Not easily discouraged Poverty experienced by community in which the
people live and grow
Poverty experienced by community in which the people live and grow
Family support Family support
The government support came after SE was considered successful (e.g. SE of owl cultivation, KTW Merapi Asri, Magelang)
The government support came since the beginning of the activity (e.g. Mae Kampong)
The success of social enterprise was the existence of social entrepreneurs who did not stop having new ideas to create social change. Although the economic welfare became the goal but various aspects were managed together such as health and education.
Although the role of SE was quite important in searching for solutions for social problems and many SE could find solutions for the members, but SE faced many challenges as shown in Table 7.
Table 7. Problems Faced by Social Enterprise in Indonesia and Thailand
Aspect Indonesia Thailand
Business continuity
Viability of SE Viability of SE
Institutional Attractiveness of young people on the life sustainability of business was reduced (not interested)
Unclear (many have informal nature)
Clear because many have legal entities
Market The market is often unclear (always changes)
The market is clear, but the relatively high price of the products made a low demand
Funding Very dependent on the initiator Limited funding due to limited investment Institutional
implications
- Must pay taxes such as business-oriented company
Viability for the long term became a problem for SE in Indonesia and Thailand. Relatively expensive price of the products was also a challenge. The different point between SE Indonesia and Thailand was
the burden as in business organizations.
6. CONCLUSION
15 coverage of social entrepreneurship was still very diverse in the community. Ideally, social entrepreneurship arises because of the social problems in the community, and it is expected that the problems can be managed professionally and in business oriented manner through social enterprise, so that the social problems can be addressed and have sustainable impact. Based on the coverage and understanding of SE, it appears that SE in Thailand was closer to the ideal definition of SE, in contrast with SE in Indonesia which was closer on handling social issues, but the long-term sustainability was still in question because it was not supported by an integrated business concept.
Other findings from this study indicated that the majority of initiators of SE in Indonesia came from the local community so that the scope of SE was more regional. In contrast with Thailand where most of the initiators of SE were missionaries and social workers, so that social issues were addressed in broader national scope.
The study results also showed that the background of the social issues raised as the basis for the mission of the SE were majority revolved around the problems of poverty, poor health and education. Those were applied to the SE in Indonesia and Thailand. More specifically, the environmental and cultural preservation issues were also the focus of the issues to be managed by SE in the two countries.
Related to the benefits or positive impacts of SE, SE in both Indonesia and Thailand seems to be capable of providing employment opportunities or in other words it may reduce unemployment, especially to fill the leisure time. Another benefit is a better increase in income and quality of life of the group target. Furthermore SE can also give benefits on living environmental issues.
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