hdca 2012_batik cluster institutionalisation_prihadi nugroho (slide)

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THE EFFECTS OF SOCIAL SYSTEMS ON BATIK CLUSTER INSTITUTIONALISATION IN

SURAKARTA MUNICIPALITY: A REVIEW OF LOCAL CLUSTER POLICY

By: Prihadi Nugroho

Department of Urban and Regional Planning, Diponegoro University

Faculty of Spatial Planning, Technische Universität Dortmund

▓ HDCA 2012 International Conference ▓ Jakarta, 5 – 7 September 2012

http://www.powerpointstyles.com/



OUTLINE

• Introduction • Problems • Theoretical Review • Batik Cluster Policy in Surakarta • Case I: Kampung Batik Laweyan • Case II: Kampung Batik Kauman • Conclusion



INTRODUCTION

Trend of

adopting cluster

policy

nationwide

increasing since

the early 2000s

Uniform cluster

policies

mismatch to

diverse localities

Inter-industrial

linkages remain

missing

National/regional

competitiveness

on certain

industries still

questioned

Cluster approach

does not fit to

Indonesian context ?



PROBLEMS

1) The composition of manufacturing industry in Indonesia is dominated by small and medium industries (SMIs)

Size of

industries

Number of

firms (‘000)

Number of

workers (‘000)

Total output

(Rp ‘000)

Small & medium

Ratio per firm

Ratio per worker

3,700 8,000

(2.16)

140,000,000

(37,837.84)

(17,500)

Large

Ratio per firm

Ratio per worker

2.8 5,900

(2,107.14)

420,000,000

(150,000,000)

(71,186.44)

Source: Ministry of Industry (2010)



PROBLEMS

2) The locational distribution of firms is uneven and concentrated in Java-Bali islands Java-Bali: 75% firms, capital intensive and

service industries Outer areas: cash crop plantation and

mining



PROBLEMS

3) Infrastructure provisions for industrial development are unequal and vary across nation Java-Bali vs. outer areas Northern vs. Southern regions

4) The lack of local institutional capacity remains problematic to support industrial development Poorly bureaucratic services Unsupportive regulations Lack of entrepreneurship and skillful

human resources



Geographical clustering of related industries/firms intensifies

interactions within the ‘competitive diamond’

Competitive rivalry and knowledge spillovers within the

cluster stimulate innovative activity

Firm rivalry and strategy

Related and supporting industries

Factor input conditions

Demand conditions

Clustering enhances innovation

Innovation enhances

productivity

Investment upgrading

High productivity raises competitive advantage of cluster,

enables high wages and employment, which in turn attract

skilled and educated labour

Source: Porter (1990) in Asheim, Cooke and Martin (2006)

PORTER’S CLUSTER THEORY (1990)



THE GAPS

Theory Reality

Structure of

domestic industry?

Spatial distribution

of firms?

Infrastructure

accessibility?

Regional variations in

social demography?

Local institutional

capacity?



BATIK CLUSTER POLICY IN SURAKARTA




• Kampung Batik Laweyan introduced to the public in 2004 as a cultural heritage site according to Mayor Decree No.

646/116/I/1997 dated 31st November 1997

about the Endorsement of Old Historical

Buildings and Sites in Surakarta Municipality

and Ministerial Regulation of the Ministry of

Culture and Tourism No.

PM.03/PW.007/MKP/2010 about the

Endorsement of Laweyan Site as Conserved

Cultural Materials, Sites or Areas



• Kampung Batik Kauman introduced to the public in 2006 as a pilot project for kampung improvement program focused on old building conservation

• Both kampungs reckoned in Local

Government Regulation No. 2 Year 2010

about Long-Term Development Plan of

Surakarta Municipality Year 2005 – 2025 to

support its vision as Javanese civilisation

centre




PROGRAMS RELATED TO BATIK CLUSTER DEVELOPMENT No. Agency Programs Remarks

1. Badan Perencanaan

Pembangunan Daerah or

BAPPEDA (Local

Planning Authority)

Establishment of Forum for

Economic Development

and Employment Promotion

(FEDEP)

Trainings on natural dyeing

materials

Formed under Mayor Decree No.

500.05/02 – E/I/2009 as a

government’s think tank

responsible to policy formulation,

including batik cluster

development

Organised by Unit Pengelola

Teknis Daerah or UPTD

(Technical Management Unit)

Solo Techno Park under

coordination of Research and

Development Division

2. Dinas Tata Ruang Kota

or DTRK (Spatial

Planning Agency)

Site revitalisation Aimed at improving cultural heritage

site physically

3. Dinas Perindustrian dan

Perdagangan or

Disperindag (Industry

and Trade Agency)

Providing batik production

equipments

Trainings on industrial skills

Encouraging firms‘

participation in exhibition

Allocated regularly based on needs

assessment



PROGRAMS RELATED TO BATIK CLUSTER DEVELOPMENT

4. Dinas Koperasi dan

UMKM (Cooperatives,

Micro, Small and

Medium Businesses

Agency)

Trainings on

entrepreneurship skills

Allocated regularly based on

needs assessment

5. Dinas Kebudayaan

dan Pariwisata or

Disbudpar (Culture

and Tourism Agency)

Promoting cultural

events including batik

festival

Facilitating the

development of (new)

tourism destinations

The programs are routinely

coordinated with ASITA (travel

bureau association), PHRI (hotel

and restaurant owners

association), event organizer,

and other tourism stakeholders

6. Badan Lingkungan

Hidup or BLH

(Environmental

Management Agency)

Promoting green

production technology

Providing communal

liquid waste facility

(IPAL)

The provision of IPAL funded by

GTZ Pro LH

Source: Analysis (2012)



PROGRAMS RELATED TO BATIK CLUSTER DEVELOPMENT

Partial and project

oriented programs

Lack of inter-

government

coordination

Misunderstanding

on cluster concept

Skeptical views

from batik players

Reluctance to

government plans

Needs for more

government

incentives



CASE I: KAMPUNG BATIK LAWEYAN



CASE I: KAMPUNG BATIK LAWEYAN No. Elements Prevailing Norms

1. Power structure Elitic group whose power spread into several prominent

actors

2. Leadership model The elderly group functions as a catalyst for mediating

different interest groups and the role of selected community

leaders is to facilitate and execute public consensus

3. Decision making process Open dialogue to pursue public consensus

4. Participatory model Voluntary and individualistic

5. Social relations type Based on family relationships

6. Control mechanism Unwritten social control

7. Cooperation nature Tends to be passive depending on pioneership and

prospective benefits that might be collected individually

8. Competition behaviour Highly market segmentation and product differentiation

9. Innovation ability Free expressions on batik motifs and techniques and low

product design imitation

10. Normative foundation Islamic teachings and gender equality principles




CASE II: KAMPUNG BATIK KAUMAN



CASE II: KAMPUNG BATIK KAUMAN No. Elements Prevailing Norms

1. Power structure Concentrated onto public figure

2. Leadership model Selected leader takes full control and coordination

3. Decision making process Open dialogue with mutual consensus

4. Participatory model Voluntary and collective

5. Social relations type Family kinship with dominant paternalistic culture

6. Control mechanism Unwritten social control

7. Cooperation nature Actively following the leader’s coordination

8. Competition behaviour Low product segmentation and differentiation with potentially

destructive opportunistic behaviour

9. Innovation ability Traditional-styled batik expressions subject to Kraton rules

10. Normative foundation Mixed Islamic teachings and Javanese feudalistic model




CONCLUSION

• Local (kampung) social values determine the existence of batik cluster institutional pattern

• Batik making traditions • The patterns of cooperation,

competition and innovation

• The historical record of batik industry development needs to be recognised properly into public policy formulation

• Combination between formal and informal institutions


hdca 2012_batik cluster institutionalisation_prihadi nugroho (slide)

Documents

batik cluster

powerpoint

mayor decree

normative

programs related

surakarta

case ii

industry