Proceedings

JABODETABEK 2013

RESILIENT MEGACITIES: IDEA, REALITY, AND MOVEMENT

IPB INTERNATIONAL CONVENTION CENTER , 8 - 9 October 2013

Cataloging in Publication Data

© Bogor Agricultural University (IPB)

Center for Regional System Analysis, Planning and Development (Crestpent)

Cataloging in Publication Data

Proceeding of Jabodetabek Study Forum, Crestpent IPB/ ErnanRustiadi, Tommy Firman, Ruchyat D. Djakapermana, Christophe Girot, Hadi S. Arifin, R. B. Singh, Shin Muramatsu, Setia Hadi, Alinda F. Zain (Eds.)

ISBN : 978-602-72009-0-6

First Publish 2014

Copyeditor : Galuh S. Indraprahasta

Candraningratri E. Widodo Rezky Khrismansyah

Cindy Aliffia F. S. Putri Cantika

Layouter : Muhammad Nurdin Cover Designer : Januar Sena

Published by: Crespent Press@2014, member of IKAPI P4W/Crestpent IPB, Kampus IPB Baranangsiang, Bogor 16144 Phone/Fax: +62 (0)251 8359072 Email: [email protected] All rights reserved.

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Preface

The 4th Jabodetabek (Greater ) Forum Seminar with the theme “Resilient Megacity: Idea, Reality and Movement” was held in Bogor, , during 8-9 October 2013. This event was attended by Indonesian as well as foreign participants, particularly from RIHN network and ETH Zurich-NUS colleagues.

The plenary lectures were very insightful and delivered by distinguished keynote speakers, which include the Deputy Minister from the Ministry of Public Works, Deputy Minister from the Coordinating Ministry of Economic Affairs, and Dean of Faculty of Agriculture, Bogor Agricultural University. The government spectrum has broaden our understanding about the policy challenges that we are facing today. The academic explanation, on the other side, has opened up another perspective of viewing those challenges.

The parallel session was attended by 33 participants and was productive in term of sharing knowledge and experiences. Moreover, the special session for community activists has brought uniqueness in this event organization. In general, the expectation to provide a network for multi-stakeholders (government, community, academics, and practitioners) was quite successfully managed in this event. The last day of field excursion was a memorable moment for those who went for the first time to Puncak area of Bogor. I do hope this proceeding will represent the general passion of a collaborative event, so that everyone who attended or did not attend will benefit of the result.

I would like to express my sincere gratitude for the support of Bogor Agricultural University (IPB) and Research Institute for Humanity and Nature (RIHN) hosting this event successfully. I look forward to working on other collaborative activities and events and producing mutual networks.

Galuh Syahbana Indraprahasta

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Contents

Preface ...... v Opening Remark ...... vii Chairperson Summary ...... xi Keynote Speech I - Spatial Planning and Anthropogenic Disaster in Jabodetabek ...... xv Keynote Speech II - The Impact of MP3EI to Jabodetabek’s Carrying Capacity ...... xvii Keynote Speech III - Evaluation of Land Use Control in Jabodetabekpunjur Metropolitan Area ...... xxi Contents ...... xxiii

1 Planning, Design, and Development

ICZM For Coastal Megacity: An Overview...... 1 Landscape Planning For Conservation Village ...... 13 Feasibility Analyses Of The Waste Water Treatment Plant (WWTP) - PPP Project in DKI Jakarta...... 27 The Preservation Of Old-Fashioned Kemasan Village in Gresik ...... 37 The Concept Of Living City: Urban Reborn For , ...... 49 The Process Of Becoming Toward The Green City Jakarta: By Expansion Artifacts Surround The City Plan ...... 59 Deconcentration of Small-Scale Industry In Greater Jakarta Metropolitan ...... 63 Identification of Urban Sprawl Phenomenon in Urban Fringe Settlement areas of JABODETABEK ...... 85

2 Environmental and Disaster

Water Quality and Quantity Issues of Urban Lakes in Megacity Jakarta ...... 95 Designing of System Dynamic Model for Simulation of Sustainable South City Development: A Preliminary Model ...... 109 Water Related Disasters and Environmental Issues of Greater Jakarta Areas ...... 117

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Coping Floods With Zooning Regulations In Kampung Kamal Muara, ...... 125 Collaboration Design Between Rural and Urban Through Application of Payment Environmental Services (PES) in Jatiluhur Irrigation Areas ...... 143 Tradeoffs In Rehabilitating The Ciliwung River Corridor: Insights Into Downstream Demand .... 157 The Status of Birds at Green Open Spaces in Jakarta ...... 167

3 Land-Use and Infrastructure

Exploring The Driving Forces Of Land-Cover Change Behind Urban Expansion in Jabodetabek, Indonesia ...... 179 Implementation of System on Supporting The Land Use Policy Model at Ciliwung Riparian Area In Bogor City, Indonesia ...... 191 Spatial Detection of Vegetation Biomass/Cover Changes using NDVI TimeSeries in Ulaanbaatar, Mongolia ...... 203 Public Transportation Transit Facilities as a Media to Create a Good Mobility and a Healthy Jakarta ...... 213 Distribution and Availability of Infrastructure in City ...... 221 Analysis on the Relationship of Green Open Space and Microclimate at Botanical Garden in Bogor and , Indonesia ...... 235

Agenda of the Conference ...... 245 Committee of the Conference ...... 247 Photos ...... 248

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1 Planning, Design, and Development

Deconcentration of Small-Scale Industry In Greater Jakarta Metropolitan

Zulqadri Ansar* & Delik Hudalah School of Architecture, Planning and Policy Development, Institute of Technology *e-mail: [email protected]

ABSTRACT

In the Indonesian economical sturucture, small-scale industry is more predominant than the middle-scale and big-scale industry. Small-scale industry is a category of small scale economy with labour intensive group and has a spread pattern. Industrialization motivated the urban growth to periphery area and then formed a metropolitan area. Jakarta has been a prrof of urban deconcentration, particularly industrial activities. This study is important considering the character of urbanization in Jakarta that encourages the growth of informal sector. The method used is identification of deconcentration that has occured, the spread pattern of small-scale industry and type of specialization formed, with furthermore analyzing the observation result and secondary data with descriptive-explorative analysis. The results of this study would show the small-scale industry deconcentration in greater Jakarta metropolitan.

Keywords: Deconcentration, Small-Scale Industry, Greater Jakarta Metropolitan

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INTRODUCTION

Jakarta is the capital of Republic of Indonesia and one of the biggest metropolitan in Asia. Jakarta is also the core of the greater metropolitan and has shown population deconcentration. This can be seen from the movement of population distribution from Jakarta duing the five last decades. In 2000, Greater Jakarta’s population has approximately reached 22.5 million people and 12.8 million people amongst Bodetabek (Hudalah and Firman 2011).

According to Gottdiener and Kephart (1991), the expansion of urban area and periphery development encourages to create new activity-centers in periphery area, called urban deconcentration. Measurement on the urban deconcentration is divided into two section: spread of population concentration (population deconcentration) and spread of employee activity concentration (job deconcentration).

The next research about job deconcentration or employment deconcentration has been done. Manufacturing industry in its spatial development in Greater Jakarta has deconcentrated. These things can be seen by the high foreign investment in land property development and large-scale industry in Greater Jakarta. Industrial land development had been a key feature of urbanization in Greater Jakarta as one of the biggest metropolitan area in South-East Asia with total area 5.987 km2 (Hudalah, Viantari et al; 2013).

To understand more on job deconcentration that occured in Jakarta, it is not enough to just observe large-scale industrial deconcentration (informal sector), but should be completed by observing small-scale industrial deconcentration (informal sector), considering the predominantly of small-scale industry in Greater Jakarta Metropolitan. This is caused by the urbanization activity that occured in Indonesia, which has a different character compared to other countries since the urbanization that occured is not directly proportional with the vocation supply. The phenomenon of the lack of employment is due to the strategic role of the informal sector that can reduce the number of unemployment. Recorded by the Ministry of Industry of Republic Indonesia (2012), the composition of Indonesia’s manufacturing industry is still dominated by small-scale industry (93.4%), while the big-scale industry amounted only 1.5%. These data shows the number of small- scale industries and their big number of employees for the Indonesian economical structure.

Micro and small-scale industry are industries which have employees ranging between 1 to 19 people (BPS, 1986). Acoording to BPS (2011) in Jakarta, micro and small manufacturing industry covers almost all industries except tobacco processing industry, coal industry and oil refining. The high percentage of employment absorption by small-scale industries has been estimated indicated by urban deconcentration caused by competition of land use in city center and a linkage series of production of middle-scale and big-scale manufacture. Thus, the pattern of small-scale industry movement is approaching big-scale manufactures to the periphery area. This study becomes more interesting because previous studies related to job deconcentration has never been conducted related to small-scale industry in urban area.

Time span that was used in this study is 20 years and the development of small-scale industries is divided into periods that can describe the growth of the industry per-decade: in 1986, 1996, and 2006. It is based on the periods that the industrial areas are estimated to begin to grow rapidly in Greater Jakarta. The scope of this study uses metropolitan circumscription, the Greater Jakarta. The study area includes the core and the greater metropolitan area. Greater Jakarta Metropolitan consists of three provinces, namely Jakarta, West and .

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URBAN DECONCENTRATION

According to Gottdiener and Kephart (1991), urban deconcentration has the characteristics of a friction to population growth and population mobility due to a friction in the location of activity center which created multi-nucleated metropolitan region.

The increase of city development due to the increase of complexity of urban activities and the increase of urban population growth have pushed urban activities out of the city core. One of the perceived impact of urban activity is commuter patterns of residents who move from their homes to the workplace. When performing these activities, the public will be faced to a situation whether they are going to live around the location of the activity or not (job follows people or people follows job). These conditions form two types of urban deconcentration, namely population deconcentration and job deconcentration.

Dura-Gumeira (2003) described that the population deconcentration in Barcelona occured because of basically Barcelona is the largest old city in the Mediterranean and has been involved in the industrial revolution long before most of the other regions in Southern Europe. Barcelona is a different case from suburbanization that occurred in Beijing. Feng (2002) adduced there are several factors that encourage Hanzhou to have an influence on the occurrence of suburbanization, among others the construction and rehabilitation of residence, improved transportation facilities services, urban planning and distribution policy of land and residential prices. On the other hand, Walker and Lewis (2001) revealed theoretically that the industrial suburbanization that occurred in North America in the mid 19th century due to the result of a combination of economic logic in the process of industrialization.

Jakarta is a different case. Deconcentration occured because of the high magnetic Jakarta which is the capital of the country. Research conducted by McGee (1991) in several countries in Asia stated that periphery area in metropolitan cities in Asia is an assimilation of the expansion of urban activities around the city center.

Population deconcentration is characterized by population distribution that increases and marked by suburbanization process leading to the periphery areas. Whereas the employment deconcentration, or often called job deconcentration, occurs in periphery. An examples from the cities of the world, job deconcentration is Paris has demonstrated its employment deconcentration towards Greater Paris that occurred between 1975 and 1999 (Gilli, 2009). Meanwhile job deconcetration that occurs in Jakarta is characterized by the development of industrial land in Greater Jakarta (Hudalah &Firman, 2012).

In Jakarta, one of the strong factors causing deconcentration is the strong urbanization entering Jakarta every year, forcing Jakarta to continue to widen out. According Rustiadi (2007), until the early 1980s the development is still concentrated in the Jakarta. However since the late 1980s, property development has boomed in the periphery. Suharto’s policy for more investment to market-oriented supports private developers to dominate land development projects in Greater Jakarta (Firman, 2002; Hudalah, Viantari et. al, 2013).

The process of job deconcentration, can be measured from the decrease of the core’s role in the industrial field, with a gauge of deindustrialization in the core city of the metropolitan (Zhou & Ma, 2000 and Gilli, 2006) and can also be measured by industrial development in periphery, with a gauge relocation industry to metropolitan periphery and industrial growth in the metropolitan periphery (Berry & Kasarda, 1977; Gottdiener and Kephart, 1991; Zhou & Ma, 2000; Gilli, 2006; Feng, Zhou and Wu, 2008; Rustiadi & Panuju, 1999). The industrial growth in periphery could show that a polycentric structure was formed, with the indicator that more

Planning, Design, and Development | 65

than one center and specialization Berry & Kim, 1993; Gottdiener and Kephart, 1991; Bogart & Ferry, 1999; Bontje, 2001; Bordeau-Lepage and Huriot, 2005; Guillain et al, 2006).

Industrial Agglomeration

To describe the industrial development in space, one of the way is from the characteristics of the industrial location. The approach used in this study is based on the inclination of concentration or spatial agglomeration that occured in industrial development. Agglomeration in industrial location is basically a grouping of production activity at a site to improve efficiency. Agglomeration that occurs are broadly divided into two, namely the localization economies and urbanization economies.

Economic localization is an agglomeration or concentration of activities due to the similarity or connection of production. Economic localization shows the formation of agglomeration caused by the similarity of activity or the presence of correlation between the activities of the other production activities. On ethe other hand, urbanization is an agglomeration or concentration of different activities unrelated with the production. Economic urbanization shows the formation of agglomeration due to different types of production activities or the absence of correlation between the activities of the other production activities.

Small-Scale Industry

Defining small-scale industries can be classified by two ways: the number of employees, and turnover or investment. In Indonesia, small-scale industries are classified into household industries and micro enterprises. According to data from the Central Bureau of Statistics (BPS), small business industries are the same with small and home industries. BPS classifies industries based on number of employees, namely: (1) industrial households, with number of emplyees is 1-4 people; (2) a small-scale industry, with 5-19 employees; (3) middle-scale industries, with 20-99 employees; and (4) big-scale industry, with 100 employees or more (BPS , 1999) .

Small-scale industry has a very different character to the other middle and big-scale industries. In developing countries, small–scale industries are classified into the informal sector. This is due to the small-scale operation and a number of additional characteristic classified in small–scale industries and the informal sector, as expressed by the ILO (1973):

• The business sectors are easily accessible • Use local resources • Owned by relatives and small-scale • Use intensive labor and adapted technology • Workers in this sector do not require the skills derived from formal education . • Operate in an uncontrolled and competitive market

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DATA AND METHOD

This research is a descriptive study that aimed to describe the extent of urban deconcentration that occur based on job deconcentration of small-scale industry in metropolitan Jakarta. This study uses a deductive approach to solve the problems. This approach begins by building abstractions, including hypotheses or research questions derived from theory, operates concepts or variables derived from theory, then measures these variables through the evidence (Neuman, 1999).

The location of this research is in the Greater Jakarta metropolitan. Jakarta was chosen as the study site because it is the capital of the Republic of Indonesia and has shown the global trend of urban deconcentration, particularly deconcentration in medium and large scale industries. Small–scale industries also experienced a strong urban deconcentration in Greater Jakarta metropolitan.

Data used in this study are secondary data. The basis of the data obtained from sources:

- Directory of Small-Scale Manufacturing Company of DKI Jakarta, , and Banten province. Economic Census 2006. The booklet contains data for each small-scale manufacturing industry - Statistical Analysis of Small and Household Industry. Economic Census 1986 - The results of a complete enumeration of DKI Jakarta, West Java. Economic Census 1996 - Registration Results Company / business in DKI Jakarta and West Java prvince. Economic Census, 2006. - Statistical data obtained from the BPS. - Reports and other documentation issued by the Ministry of Industry and BPS. - Laws and regulations related to small-scale industry and the informal sector.

Generally, the methods of analysis used in this study is an explorative-descriptive statistical analysis. This analysis worked by finding the problems and conditions that occur in the study area as well as from the collection of secondary data which is compared with related literatures. This research used three different types of data analysis.

To detect a job deconcentration for small-scale industries in Greater Jakarta metropolitan, an analysis of representative indicators was performed. The analysis begins with determining the variables that are considered to represent job deconcentration. These variables are determined based on theory and previous studies on job deconcentration. The variables are used in this study are the number of small-scale industries and types of jobs in the core (Jakarta) and greater area (Bodetabek) in the year 1986 to 1996 - 2006.

To determine the distribution pattern of small-scale industries in periphery area of Greater Jakarta, two analyzes were performed to identify. The first analysis is an analysis of the density of small-scale industries especially in the periphery area in the Greater Jakarta metropolitan. This analysis utilizes information on the depth of sub- district . To illustrate the density of small-scale industry, job ratio per population and employment per population are counted. Job, in this case, is the data of the number of employees of any small- scale industry. This method has been frequently used to look at the spatial concentration of industry in the peripheryarea in metropolitan areas in Europe and the United States (Shearmur and Coffey, 2002; Bogart and Ferry, 1999; Guillain et. al., 2006). This analysis is used because it can capture the spatial dynamics of periphery by showing in detail in an area (Regency/City), regional (district) where ever concentration of employment centers occur (Hudalah, et al , 2013 ; Shearmur and Coffey, 2002; Bogart and Ferry, 1999; Guillain et. al., 2006).

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The next step is an analysis of the types of small- scale industry jobs in Greater Jakarta metropolitan, especially in its periphery area. This analysis finds the dominant type of small-scale industry that have grown in the area (districts) which has job concentration of small-scale industry. The districts analyzed shall have a high enough ratio to be observed what are the kinds of small-scale industries are dominant absorbing work.

To find small-scale industrial specialization in the area of Greater Jakarta, especially in periphery area, an analysis on the basis of specialization in the district/cluster was conducted. Districts that have small industrial density is high and equipped with distribution types of work, will be seen more in its specialty base. To see a small-scale industrial subsector specialization in their respective city/regency, the LQ (Location Quotient) analysis was conducted based on the type of work.

LQ is widely used as a simple tool to measure the relative specialization of a region/district in spesific sectors. This tool has a wide use so that any unit of measurement can be used to calculate it. LQ is often used to identify the work concentration in certain sectors in the metropolitan area (Bogart and Ferry, 1999; Bordeau- Lepage and Huriot, 2005; Guillain et al, 2006). The formula used is:

Number of employee of Industrial Sub-Sector in a Area Total Number of Employee in a Area Number of employee of Industrial Sector in a Area Total Number of Employee in Larger Area

Notes : LQ: Location Quotient or Hoovver-Balassa coefficient Variable analysis: - The number of jobs in the industrial subsector in a region - The number of total jobs in the region - The number of jobs in the industrial sector in the wider region - The number of total jobs in the wider region (Bogart and Ferry, 1999; Bordeau-Lepage and Huriot, 2005; Guillain et al, 2006).

LQ value of a particular type is equal to 1 if the industry shows the same proportion between the types of industry in district with similar industries in Jakarta and surrounding areas as a whole. LQ value of more than 1 indicates a particular type of industry concentration in a district when compared to the average of district-city or other areas. LQ value of less than 1 indicates that the area has small role in its activity of certain types of industry when compared with the average of district-city or other areas.

SMALL SCALE INDUSTRY IN GREATER JAKARTA

According to the BPS, small business is identic with small-scale industry and home industry. BPS classifies industry based on number of employees, namely: (1) industrial households with a number of employeed 1-4 people; (2) a small-scale industry with 5-19 employees; (3) meiddle-scale industriy with the 20-99 employees; and (4) big-scale industry with 100 employees or more (BPS, 1999). Small-scale industries have very different characters to the other middle and big-scale industries. A small-scale industry does not require large capital to invest.

Table 1. Total of Small-Scale Industry in Greater Jakarta No REGENCY / CITY 1986 1996 2006

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1 1,505 6,958 6,257 2 1,752 8,101 6,518 3 Central of Jakarta 1,070 4,947 4,219 4 2,507 11,591 12,706 5 North Jakarta 1,019 4,710 4,134 URBAN 7,852 36,307 33,834 6 Bogor District 818 18,876 27,072 7 District 445 10,272 6,156 8 Tangerang District 500 8,967 15,710 9 Bogor District 34 782 3,030 10 Tangerang City 2,555 3,463 11 Bekasi City 3,700 12 City 2,758 PERI-URBAN 1,797 41,452 61,889 TOTAL 9,649 77,759 95,723

As a result of the data exploration and information, it is found that one of the causes of reduced growth of small- scale industries in the city center is due to local government policies. Local government policies related to the development of business premises should adjust residence permit so that a lot of home industry canot beforced to close or move out of the city core. Policy of land use in the city center which are dominant for services caused the home industry to move to a residential area outside the core of the city. In addition, other factors that encourage small-scale industries out from the core is the high cost of production in the city center that occurs at the same time market or the purchasing power are declining caused by the 1998 economic crisis. Economic crisis affects high unemployment and gave dual effect on public consumption.

On the other hand, high production cost definitely has an impact on the price of goods. The government's policy to implement free trade by lowering tariffs (customs duties) makes the production of small-scale industries have to compete with giant producers from outside. Goods produced by giant manufacturers have almost the same quality of goods produced by small-scale industry, but has a much cheaper price since are mass produced. Of course this affects consumer taste. Production costs that do not comply with public consumption causes many small-scale industry bankruptcies.

Employee of Small Scale Industry in Greater Jakarta

Employee is an important factor in industrial activity. Weber (1909) stated that the availability of employee is one of the spatial factors that influence the development of the industry.

Table 2. Total of Small Scale Industry Employee in Greater Jakarta No REGENCY / CITY 1986 1996 2006 1 South Jakarta 11,262 28,887 25,968 2 East Jakarta 11,972 30,696 24,698 3 Central of Jakarta 8,664 22,214 18,945 4 West Jakarta 27,162 69,646 76,346 5 North Jakarta 9,341 23,952 21,023 CORE URBAN 175,386 166,980 6 Bogor District 8,556 56,729 79,904 7 Bekasi District 6,762 44,836 29,663

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No REGENCY / CITY 1986 1996 2006 8 Tangerang District 6,951 35,868 62,840 9 Bogor District 472 3,131 12,130 10 Tangerang City 10,220 13,852 11 Bekasi City 13,357 12 Depok City 9,745 GREATER 22,741 150,783 221,491 TOTAL 91,142 326,169 388,471

Based on exploration, it was found that the phenomenon of the growth of small-scale industries’ employees in the Greater Jakarta is due to the policy of development centralization. This policy is the main attraction of the employee/worker to migrate to the capital. The phenomenon of workforce increase is exacerbated by prolonged drought, the worst for 50 years in 1997, ultimately causing a lot of agricultural farming failures who also lost their jobs and migrate to Jakarta in the hope of better livelihood.

The migrants who came to Jakarta have inadequate levels of education. Willingness to continue to survive in the capital makes informal sector (in this case a small–scale industry) the last alternative work for migrants. This phenomenon can be seen from the high number of migrants coming to the Greater Jakarta which continued the growth of small-scale industry’s employee in Greater Jakarta. Aside from the number of migrants, this phenomenon could also be seen from the high unemployment rate in Greater Jakarta. The unemployment rate is so high tha cause the informal sector to become the last work alternative.

Deconcentration of Small-Scale Industry in Greater Jakarta

Figure 1. Charts of Small-Scale Industries Growth in GreaterJakarta (Core and Periphery)

Small-scale industries and home industries also felt the impact of the economic crisis in 1998. However, compared to big-scale industries, small-scale and medium-scale industries in Indonesia can still survive. It is shown from the chart that the growth of small-scale industries in Greater Jakarta continues to increase in number although the pace slowed during 1996 to 2006. One of the reasons why small-scale industries in Greater Jakarta can survive the economic crisis better than big-scale industry is because the type of goods produced by small- scale industries in greater Jakarta are directly consumed goods for the urban community, not the type of small-scale industry that are sub-produser of a big-scale industry (linkages system), hence not too affected by the global turmoil. In addition, the impact of Indonesia’s banking collapse is not perceived by small-scale industries because majority of the small-scale to middle-scale industries do not get support from banks in

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Indonesia. The effect of the economic crisis to small–scale industries is the high price of base materials that are imported from overseas or manmade (not natural) resources in the country, and then coupled with low purchasing power. Both of these factors make Indonesia’s small-scale industry sector fluctuated.

Back in the picture above, it is clear that the intersection of the industry growth rate occurred between 1986 and 1996, while the growth rate of employee intersections occur between 1996 and 2006. Based on the chart above, it can be explained that the number of small-scale industry with 1-5 employees decreased the most, while the number of small-scale industry with 5-20 employees decrease the least. In other words, small–scale industry that decreased the most is home industry. The inability of the home industry to survive in urban areas is because its financial capital and profit is relatively smaller than other small-scale industries in general. Their profits can only be used to continue production. Their status is informal sector so in the enterprise is not organized well and generally does not have a business license, causing difficult to receive fund injection from the bank. Meanwhile, demand in the city core to the cost of production, land rental rates and the higher cost of living makes group of home industry chose to move to the periphery area or even out of business.

Competition of area in the city center led the home industry forced out of the core. The most apropiate area selection for small-scale industres after coming out of the core is the periphery. In the periphery, cost of product distribution is lower, product ditribution is closer to the consumer and distribution of raw materials also are still in urban areas, so it can still run a small-scale industrial production activity.

Spread Pattern of Small-Scale Industry in Greater Jakarta

Table 3. The Density of Small-Scale Industry 1986 1996 2006 REGION E/P CLASS E/P CLASS E/P CLASS SOUTH JAKARTA 7.04 R 15.12 T 12.64 R EAST JAKARTA 8.02 R 15.50 T 10.23 R CENTER JAKARTA 7.43 R 19.95 T 21.24 T WEST JAKARTA 21.65 T 46.71 T 35.83 T NORTH JAKARTA 9.87 R 21.49 T 14.48 R 2.86 R 16.02 T 15.77 T 3.74 R 12.39 R 15.31 T 4.86 R 15.35 T 10.42 R BOGOR CITY 1.97 R 4.66 R 13.40 R

Result of Employment Calculation per Population R : Result of calculation E/P < 15

T : Result of calculation E/P > 15

It is shown that the role of the city core to the center for small-scale industrial activities increase in 1986 to 1996 and after that the role declines in 2006 except in West Jakarta and Central Jakarta. While the periphery areas continue to experience increasing trend from 1986 to 1996, as well as from 1996 to 2006 except Bekasi.

Central Jakarta still has an increased role because of the denominator or population declined, making the result is still considered high. It can be seen that there has been a decrease in the number of workers and population between 1996 to 2006 in Central Jakarta. The number of workers is 22,214 people to a population of 18,945

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people, but the number of jobs drastically decreased from 1,113,579 people to 891,778 people. On the other hand, the role of West Jakarta continues to increase as it has long been a center of small-scale industries from 1986 and continue to increase until 2006. It can be seen from the number of jobs from 1986, 27,162 people to 76,346 people in 2006.

Interesting phenomenon occurs in Bekasi because Bekasi is the only suburb/periphery that has a declining role. There are several possibilities of decrease in the concentration of small-scale industrial employee in Bekasi, one of them due to the growth of middle and large-scale industries in the . The growth of that industry is inversely proportional to the growth of its small-scale industry. The cause is there is no formation of a linkage system with small-scale industry, even competition with the small-scale industry.The competition makes small-scale industries can not compete and are forced out of the industrial estate area. Linkage system that is built is still lacking between large-scale and small-scale industries in Bekasi, which is also indicated by a study conducted by the Regional and City Planning Program of ITB with Added Value Chain of Production Program through Integrated Area Development in 2010 in Bekasi. In addition, many small-scale industrial workers are absorbed into large-scale industries so the number of small scale industrial units also reduce.

The next step after seeing the data density of small-scale industrial employees over Regency/City in Greater Jakarta are seeing employment per population by districts scale. From the map below can be seen that there are some districts that have E/P above average, including :

- Bogor City: district of South Bogor - Bogor Regency: Caringin District. Ciampea District, CiomasDistrict, Tamansari District, Cijeruk District, Babakan Madang District, Parung Panjang District Dramaga District - Bekasi City: Cibarusah District, Baru District, District of South Cikarang, Cikarang Center District, - Tangerang City: Serpong District, Ciputat District, District, District, District, Pasar Kemis District, District, District, Pamulang District, Kosambi District. - Core is West Jakarta, although Central Jakarta shows E/P is above average but the main cause of the population participated in this denominator decreased significantly so that even a small-scale industry reduced, will still have the E / P is above average.

Of all sub-districts that have E/P is above the average, not all will be analyzed on its industry specialization, but only sub-districts having over 15,000 employees, sssuming 15,000 people can form their own specialties with numbers that much. Based on the data obtained, there are no sub-districts with 15,000 employees. However, the map above shows the formation of clusters or the agglomeration of some districts that have E/P above the average.

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Figure 2. Employment Density Map of Greater Jakarta Metropolitan District Scale of the Year 2006

The cluster was determined based on the factors of region proximity and through the transport facility. There are four clusters and one city that will be analyzed on industry specialization. The clusters are:

- Cikarang Cluster with a total of 21,639 employees, is a big-scale industrial estate built by PT. Jababeka Tbk. According Hudalah and Firman (2012) , the total of industrial land covers nearly 6,000 acres in the last two decades, 1,500 national companies and 30 multinational companies. It shows an industrial area on periphery are mostly concentrated in Cikarang Cluster - Serpong Cluster with a total of 22,059 employees, is a planned satellite city managed by PT Bumi Serpong Damai Tbk. - Bumi Serpong Damai (BSD) City, inaugurated on January 16th, 1984 to provide industrial estates, offices, commerce, education, tourism and of course residential. Serpong is also a concentration of population in Jakarta’s periphery. - Cikupa Cluster with a total of 17,101 employees, at the periphery of Jakarta (Hudalah, et.al, 2013). It shows that Cikupa is the center of the industrial area that has been longly established - Ciomas Cluster with a total of 41,947 employess is a center of leather craftsmen, especially shoes and sandals that has been known for a long time. This proves that the formation of clusters of small- scale industries in the suburb of Jakarta is the center of a long- established previously.

Table 4. The Work Spread of Small Scale Industry of Greater Jakarta Metropolitan

GROUP CLASSIFICATION CIOMAS CIKARANG SERPONG CIKUPA CORE FINISHED GOOD 40,810 21,248 19,530 12,458 70,449 FOOD 2,128 180 5,566 2,934 3,572 Food and beverage 2,128 180 5,566 2,934 3,572 CLOTHING 37,102 90 5,566 2,732 51,086

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GROUP CLASSIFICATION CIOMAS CIKARANG SERPONG CIKUPA CORE Clothes 6,238 30 5,566 1,113 50,546 Leather 30,864 60 0 1,619 540 SHELTER 838 20,948 5,869 5,161 3,238 Wood and Furniture 838 20,948 5,869 5,161 3,238 PRINTING 590 0 2,327 1,518 9,354 Paper 0 0 202 607 591 Printing 590 0 2,125 911 8,673 EQUIPMENT 152 30 202 1,113 3,289 Rubber and Plastic 152 30 202 1,113 3,289 BASE MATERIAL BASE MATERIAL 1,140 391 2,528 5,262 5,808 Chemistry 178 0 202 911 668 Textile 206 0 202 304 385 Mine 0 0 0 0 180 Iron and Steel 618 301 1,922 2,631 3,700 Machine 0 90 101 607 180 Electronic 0 0 0 101 0 Others 138 0 101 708 694

The table above shows small-scale industrial distribution by type, measured by the distribution of employees in the formed clusters. It can be seen from the composition of employees that West Jakarta (core) have the highest number of workers (76,346 employees), followed by Ciomas Cluster as the center of small-scale industries which have been known since long time with 1,949 employees, Serpong cluster with 22,059 employees, Cikarang Cluster with 21,639 employees, and the last Cikupa cluster with 17,101 employees.

It can be seen that the dominant employees in West Jakarta, as well as in Ciomas Cluster, are the clothing industry. Basically, Ciomas Cluster have long been classified as a production center, especially for leather shoes and sandals, making the number of employees for clothing production exceeded 37,102 people. West Jakarta, which is located in the core, producing apparel to serve the Jakarta urban society itself and the broader market. It is a rational reason that makes the number of workers for clothing production in West Jakarta reached 51,086 people.

Serpong Cluster has almost uniform number of employees for all finished goods production, including small- scale food, clothing and shelter industries. This could be dued to Serpong which became a new satellite town in the suburban area of Jakarta. Space required for production of a small- scale industry is not too big, so is electrical energy required. Thus, domination of small–scale ndustry grew in the residential area. The residential area is the closest market for goods they produce. Of course, this is pulls the small-scale industries to grow in the residential area.

Cikupa Cluster has high number of employees in the production of base materials. This could have been caused since Cikupa is a periphery area of Jakarta city which became the first region for industrial area development. Because it has been growing for a long time, small-scale industries have high enough amounts of base materials compared to other clusters with up to 5,262 employees. This shows that in Cikupa Cluster the linkage system between big–scale industry and small-scale industry has awakened.

The interesting phenomenon occurs in Cikarang Cluster , because it can clearly be seen there as a dominance of small-scale industry of shelter. Seen that the small-scale industries of base material are very small in number of employees at only 391 people, it shows the linkage system that is built up in Cikarang Cluster is very small cluster. Based on that assumption above, the development of big-scale industry zone in Cikarang was did not

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make small-scale industry’s climate grow up but decrease instead. It could have been caused by employees who had been in small-scale industries are absorbed by many large-scale indu stries. Small-scale industries are not only just able to become a supporting system for large-scale industry but also possibly causing the competition to win the market because they produce similar items. Large-scale industry can push the price of goods for mass- produced goods while small-scale industry have difficulties to surpress the price of goods that cause consumers’s taste to prefer much cheaper goodds with almost the same qua lity.

Figure 3. Map of Employee Density District Scale in Greater Jakarta Metropolitan, 2006 Table 5. Result of Small Scale Industries LQ in Greater Jakarta Metropolitan, 2006

TYPE CATEGORY SECTOR CIOMAS CIKARANG SERPONG CIKUPA CORE FINISHED FOOD Food and 0.28 0.08 1.17 0.80 0.62 GOODS beverage CLOTHING Clothes 1.27 0.09 1.91 0.49 1.19 Leather 1.85 0.25 0.00 0.00 0.46 SHELTER Wood and 0.12 1.29 0.94 1.06 0.79 Furniture PRINTING Paper 0.00 0.00 0.36 1.38 0.99 Printing 0.66 0.00 1.39 0.77 0.82 EQUIPMENT Rubber and 0.14 0.17 0.13 0.92 1.14 Plastic BASE BASE Chemistry 0.58 0.00 0.26 1.50 1.71 MATERIAL MATERIAL Textile 0.35 0.00 0.71 1.38 0.17 Mine 0.00 0.00 0.00 0.00 0.68 Iron and Steel 0.28 0.27 0.87 1.54 0.85 Machine 0.00 0.51 0.20 1.57 1.11 Electronic 0.00 0.00 0.00 3.67 0.00 Others 0.55 0.00 0.16 1.43 1.40

Table above shows LQ analysis per cluster divided based on sector. This table shows the similarity between small-scale industry spesialization that are formed with composition of employee per sector. Based on the LQ table, Ciomas Cluster has strong centralization index of leather industry with the result of LQ calcutaion of 1.85

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in line with number of employees of 30,864 people. Ciomas has long been classified as a center of leather production, especially shoes and sandals. Because of its history and its distance to city core, the knid of agglomeration formed in this cluster has complementary linkages or agglomeration that was formed caused by being bound of production. Ciomas, which has long been a center for the leather production, of course, has established a system of linkages formed between a small-scale industry with other small-scale industries. Its quite fare sistance to the city core can also conclude that agglomeration was formed not because of approaching the market that has same consumer,but because it has the same type of production that are complementary to production activities.

Serpong Cluster shows centralization index which is almost even for all finished goods-production, including small-scale industries of food, clothing and printing. LQ calculation results for the food and beverage industry is1.17 by the number of 5,566 employees, and for industrial clothing is 1.91 by the number of 5,566 employees. This could be dued by Serpong which is a satellite city on Jakarta’s periphery area. Space required for the production of a small-scale industry it is not too big, so does the electrical energy,making a dominance od small- scale industries grow in a residential area. In addition to production requirements, the residential area is also the closest market for the goods they produce. Hence making it more interesting for small-scale industries to grow in the residential area.

In addition, there is also an interesting phenomenon on centralization index in Serpong Cluster, namely wood and furniture industry. The number of employees for the wood and furniture industry became the largest number of employees in Serpong Cluster, of 5,869 employees but its LQ does not exceed 1. It can be concluded that the wood and furniture industry is very strong in Tangerang City and are in a higher levels of concentration of such kind of work compared to other districts.

Cikupa cluster revealed high LQ in the production of base materials, which can be seen from all types of industrial base material groups have LQ > 1. Concerning the number of employees, it can be concluded that small-scale industries in base materials have quite low number of employees, with the exception of the iron and steel industry type because only this type of employee is able to reach 2,631 employees. The phenomenon of the growth of small-scale industries of iron and steel types could be caused by Cikupa as an area on the periphery of Jakarta, as the first being the development area of Industrial zone. From these observations, it can be concluded that the agglomeration formed is ancilliary linkages or activity concentrations due to the linkage to the same market companies. Because it has been growing for a long time, there are small-scale industries in high enough amounts of base materials compared to other clusters. There is a correlation between large-scale industry and small-scale industry in Cikupa Cluster due to the material are produced in big-scale industries into finished goods, then processed into intermediate material in small-scale industry before, thus forming the production chain. It shows that in Cikupa Cluster the linkage system between big-scale industry and small-scale industry has been built, although still low.

Cikupa Cluster shows a low linkage system has been built, which is different from Cikarang Cluster. In this cluster, the concentration is on the wood and furniture industries with 20,948 employees. The base material industry is very low, showing low number of employee and low LQ. The phenomenon of big-scale industries in Cikarang could not be the growth engine to small-scale industry. There are two assumptions that caused the decline of small-scale industry growth in Cikarang. First, small-scale industries’ employee are absorpted to large-scale industry that grow in Cikarang. Second, caused by competition of goods and land between small- scale industries and large-scale industries. This phenomenon is different in CikupaCluser, where for a long time

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has been a big scale industrial zone. Specialization of small-scale industry in CikupaCluser is more oriented to base material and shows there is linkage system that has been built in Cikupa Cluster.

In addition, there is also an interesting phenomenon for centralization index in Cikupa Cluster. The electronics industry has LQ of 3.67 but has a number of employees of only 101 people. It could be concluded that the electronics industry in Tangerang Regency is very small in number, predominantly concentrated in Cikupa Cluster.

For the Core itself, it appears that a small-scale industry dominates in West Jakarta, which is the clothing industry with LQ 1.19 and 51,086 employees. Although there is the same type of production between West Jakarta and Ciomas Cluster, the type of agglomeratin is different. Agglomeration that occurred in West Jakarta is a competitive linkage, or in other words the concentration of production activities have similar types of production due to attraction to the same consumers. Clothing production industry agglomeration formed in West Jakarta is dued to savings on the distribution of products from producers to consumers.

Jakarta as the most populous city in Indonesia certainly is a huge market to small-scale industry with the type of production of finished goods. It is natural that the clothing production industry agglomeration occurred in West Jakarta. This type of agglomeration is strong with the competition in the market. Continuing to reduce production costs in order to get affordable prices and strive to upgrade the quality of production, small-scale industries are competiting to force the consumers. The observation result on the small-scale industrial specialization of the entire clusters can conclude that is the tendency of small-scale industries that produce finished goods (including the production of food, clothing and shelter) to approach large city and city core in order to approach the customers or complementary in the production process.

CONCLUSION

This research aims to understand and explain the phenomenon of job deconcentration based on small- scale industrial activity formed in Greater Jakarta metropolitan, especially its distribution pattern and specialization types of small-scale industries formed as a result of the deconcentration. In conducting this study, researchers found that the study area is the largest metropolitan and most density city in Indonesia. Small-scale industrial activity on the periphery area has seen to experience significant growth.

In this study, there are several conclusions. First, small-scale industrial deconcentration in Greater Jakarta can be seen from the reduction of the role of core city towards small- scale industry, where the periphery is increasingly showing its existence as the growth of small-scale industries. The composition of small-scale industries in Greater Jakarta in 1986 is still dominated 81% in the city core and 19% in the periphery. Meanwhile in 1996 turned into to 47% for core and 53% for the periphery. A continuing deterioration of the role of city core can be seen in 2006, with 35% located in the city core and 65% in the periphery.

In addition to a movement of the number of small- scale industries, deconcentration is also demonstrated by the small number of industrial jobs in the city core and continued growth in the periphery. The number of small- scale industrial composition of employment in 1986 is still dominated by the city's core with 75%, while 25% is in the periphery. In 1996 the composition was dominated by urban with 54%, while in the periphery only 46%. Meanwhile, a difference occured in 2006 where small-scale industrial composition decreased at the city core with 47% and the role of periphery became dominant with 53%. Based on the two results of analysis, it can be

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concluded there has been small-scale industrial deconcentration which is characterized by a decrease in the role of core city in the number of small-scale industry and number of employees, whereas the growth in the periphery has increased.

After discovering the small-scale industrial deconcentration occurence in Greater Jakarta metropolitan, then the next step is to determine the pattern of spread by using job density ratio formula of small- scale industry. From job density ratio formula of small-scale industry that is shown by using the Employment/Population method, it can be seen a slowdown in the growth rate of small-scale industry and its employees in Greater Jakarta during 1996 to 2006. The slowing growth rate is due to the economic crisis that made the economy condition worse. This led companies go collapse and creates unemployment rise in Indonesia.

Distribution patterns are formed as the results of the analysis on the job density ratio of small -scale industry based on districts scale shows agglomeration that occurred in several districts which has average E/P to form several clusters. The clusters are:

- Cikarang Cluster, consists of the South Cikarang District, District, New Serang District, Cibarusah District with a total of 21,639 employees. - Cikupa Cluster, composed of the Cikupa District , Panongan District, Pasar Kemis District, Sepatan District with a total of 17,101 employees. - Serpong Cluster, consists of Serpong District, Pamulang District , Ciputat District and Pondok Aren District with a total of 22,059 employees. - Ciomas Cluster, consists of Ciomas District, Cijeruk District, Tamansari District, Dramaga District, Ciampea District, South Bogor District, Caringin District with a total of 41,947 employees. - The Core is West Jakarta, considered as the most ideal represents the core because it has the highest number of employee compared with other areas of Jakarta:76,346 employees.

Distribution of types of small–scale industries measured by the distribution of jobs in the clusters shows that small–scale industry grows predominantly in the production of finished goods. This phenomenon is shown by the composition of jobs in West Jakarta (core), predominant in the clothing industry with 51,086 employees, and then Ciomas Cluster which is also predominant in the type of clothing industry with 37,102 employees. In Serpong Cluster, the number of employees are almost even in all production of finished goods, including small--scale industry type of food, clothing and shelter. In Cikarang Cluster, small--scale industry type of shelter is dominant with a small number of employees: 20,948 people. Meanwhile, in CikupaCluster it is revealed that there is high number of employees in the production of base materials: 5,262 people.

Specialization is seen by using LQ (Location Quotient) method. Obtained from this method is which kind of jobs are specialized in all existing cluster predominantly producing finished goods. LQ > 1 in West Jakarta (core) is a small-scale industrial type of clothing and equipment. In Ciomas Cluster is concentrated small-scale industrial type of clothing. Meanwhile in Serpong Cluster, the centralization of small-scale industries are even to all production of finished goods , including small-scale industrial types of food, clothing, shelter and equipment. Cikarang Cluster shows strong centralization is a small-scale industrial type of shelter. Cikupa Cluster reveals high concentrations of small-scale industries in the production of base materials, in which subproducers for a large company are dominant. The phenomenon of similar type of production is caused by the close distance to markets (competitive linkages) or the type of production linkages (complementary linkages).

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RECOMMENDATION

Based on the findings and conclusions, the proposed recommendations include:

1. Development of small-scale industrial activites occur across the administrative boundaries of the cities/regencies. Therefore, the integration of the development of small-scale industries in the regional scope is needed. This integration consists of various sectors and considers existing areas in Greater Jakarta and the surrounding. 2. The growth of activity centers in the periphery area formed polycentric area structures, which are potential to develop into independent cities. In this case, it is necessary to support productive urban functions so that the center of periphery will be able to be a catalyst of development and economic growth. Thus, there is need for service facilities and infrastructure development on the periphery area in order to serve the population well. Creation of urban activities is expected to reduce the problem of density and environmental degradation in Jakarta. 3. The national industrial policy in developing manufacture as the lead sector in Indonesian economy improvement should also give attention to small-scale industry as one of a the chain of processing. In development of the industrial zones, developers - both public and private – should provide land to small-scale industries as a supporting system for middle-scale and large-scale industries. 4. The high population growth that is not aligned with job supply makes the number of unemployment rise. One of the alternative solution is to develop a micro business. So, there is the need for government attention to the development of small-scale industry in metropolitan area, given metropolitas as a magnet for migration. 5. Free trade policies should be accompanied by an increase in the quality and quantity of domestic production, so that domestic products do not compete with eah other. The need for strong political will from the government to continue to promote domestic production, especially small and medium enterrises (UKM), and public awareness efforts related to the consumption of domestic products. 6. There is a need for National Industrial Policy to guide development in the periphery area of big cities. The trend of periphery developments is to settle down at the periphery and continue activities in the city core, so flow-out from the core is very high . By directing the development of activity centers to the urban, the creation of equitable development can be encouraged, thus can decimate the load of core city.

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