A group of social entrepreneurs on a recent visit to the UK talk about the challenges of achieving scalein one of the world’s largest developing countries.
Amongst Indonesian business students, ‘social enterprise’ is fast becoming the coolest phrase on campus. Despite a long tradition of co-operatives and community-facing companies, the social enterprise movement is relatively new to Indonesia. But recent work by organisations such as the British Council are doing much to raise the profile of the sector and support start-ups in one of the world’s largest developing countries.
As part of this work, in May the British Council took a delegation of Indonesian social entrepreneurs on a study tour of the UK.
“We are trying to facilitate community-based social entrepreneurs in Indonesia with training and capacity building to get to the next level”, explained Ari Sutanti, programmes manager, British Council Indonesia. “Social Enterprise is a term that recently, in the past three years, has been discussed widely. We started to work with the universities in Indonesia and social entrepreneurship is being embraced and discussed in Business Schools. There is much interest, so we wanted to capitalise on this… and give international experience to these young, passionate social entrepreneurs.”
Bijaksana Junerosano is one such young and passionate social entrepreneur. He founded Greeneration Indonesia, in the city of Bandung, while at university in 2005 and dedicated himself to it full-time in 2008. Feeling compelled to tackle the huge pollution problem in the city, and discovering that the average Indonesian throws away 700 plastic bags a year, he researched re-usable bags and designed a small, zip-up bag to fit in a pocket or handbag. He admits it’s not a new idea, but it was new to Indonesia. Teaming up with a small textiles producer he initially made 700 a month; he now produces 15,000 bags a month, and has sold over 300,000.
“The purpose of our bag business is to support our campaign”, says Junerosano. “Our mission is ‘a green attitude for a green environment’. The environmental problems comes down to human habits. We do a lot of education, animations in elementary schools, to talk about water, waste and energy. We also want to create a system of responsible waste management in Jakarta.”
The challenge Junerosano now faces is bringing his business to scale. “Greeneration Indonesia is right now in the learning stage… We have only 24 people, we are dealing with lack of management skills, we don’t have professional backgrounds. We are just fresh graduates and do it with intuition. But now we have to invest in strategy improvement and human resource development”, he says.
Networking events and skills training are offered by the British Council in Indonesia, but they have a limited impact in a country of some 242 million inhabitants. Sutanti informs that, “In terms of financing we see angel investors and venture philanthropists ready with funds, but the levels of readiness are not there… every month we receive phone calls and emails and requests to meet with social enterprises to channel funds and investments, or corporations requesting joint programmes. But I have to say you cannot just invest your money, you have to invest your time to train and work with them.”
It is a problem recognised by others in the British Council delegation too. Noor Suryanti’s workers are almost exclusively uneducated women from poor areas of Malang, east Java. She started her enterprise Pelangi Nusantara by making bags and clothing from left-over fabrics thrown away by local textiles factories
“In 2011 I felt I needed to get more people to work with me, and that’s when I started teaching the skills”, she says. “I now work with 15 groups of women, and each group consists of 10-15 women. A lot of the women get married at a very early age, between 14 and 17, so they lack education and skills. What Pelangi Nusantara is trying to do is provide the skills that will allow these women to work and give alternative income to their families.”
Now organised as a co-operative – each group make a profit from each item it sells, pays into a central fund for shared design and marketing, and shares the co-operative’s annual profits – it is a resounding success, and even exports to Japan.
As with Greeneration Indonesia though, Suryanti needs help to grow. “Since the membership is growing, management issues obviously arise – so how to get the management structure right in order to cater for all of our members is a challenge”, says Suryanti. “Also the vision I have for the future is to get membership from other cities. That’s something I need to figure out, to understand what the organisation should be like in order to help women in other cities to get the skillset that my members are getting.”
There are also unique geographical challenges when trying to expand a business in an archipelago of over 17,500 islands. Martinus Kresna works with communities in North Maluku, separated from the capital Jakarta by a vast expanse of sea and over 1,000 miles. His organisation CV Roas Mitra trains local villages to produce coconut cooking oil, giving them a higher value product to sell than the more typical dried coconut, as well as an alternative to the environmentally devastating palm oil. “We now have six staff and have trained 259 people, from 29 villages”, says Kresna. “They could previously make around $40 a month, but by selling coconut oil that can increase to $150 a month. We also involve women in the production… this allows women to earn their own income and become equal to the men.” He adds: “Palm oil is owned by the rich; whereas the coconut plant is everywhere, it is owned by the people”.
Kresna hopes his visit to the UK, by meeting with organisations as varied as Social Enterprise Europe, Uptown Oil and The Hub, will give him ideas for how to market and transport the product beyond the coastal borders of North Maluku. In turn, there is a lot to be learned from the business models of Greeneration Indonesia, Pelangi Nusantara and CV Roas Mitra: each is inspirational, with the potential to transform communities and conquer markets.
“Social entrepreneurship is not a new practice in Indonesia”, reminds Mahardhika Sadjad, programme officer for skills for social entrepreneurs, British Council Indonesia. “But before, a lot of the practices were very inward looking. They didn’t realise there were a lot of other social enterprise out there. We create a channel for social entrepreneurs to meet each other, to discuss the challenges they face… this is what makes social enterprise different from conventional businesses – collaboration is key, it’s not just about money and profits.”
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