Social Enterprise for Sustainable Urban Development Parallel Events of PrepCom3 UN Habitat III Collaboration between United Nations, City Government of Surabaya and Universitas Surabaya Surabaya, July 23 2016 ii Foreword Excellencies, Distinguished Delegates, Ladies and Gentlemen It gives me great pleasure to extend to you all a very warm welcome on behalf of the Universitas Surabaya (UBAYA) and to say how grateful we are to all of you who have accepted our invitation to attend the discussion on Social Enterprise for Sustainable Urban Development. This event is called as parallel events of the PrepCom3 UN Habitat III. PrepCom3 will be held in Surabaya, Indonesia, from Monday, 25 July to Wednesday, 27 July 2016 at the Convention and Exhibition Hall Grand City Convex Surabaya. Stakeholders, programmes and projects, as well as global and regional networks of partners, can use this opportunity to meet and advance the debate on the New Urban Agenda. Prior to Third Preparatory Committee of the UN Habitat III Conference, the original motivation of this event is to share experiences and research finding from private sector, research institution, and non-government organization to promote issue sustainable urban development. Hence, the social enterprise has become our concern to better respond to the challenges of our time, to address issues such as inequality, informality, insecurity, and the unsustainable forms of urban expansion. All of the members of the local Organizing Committee from the Universitas Surabaya wish you a superb conference experience and a memorable stay in Surabaya. Dr. Anton Tjahjo Anggoro Centre for Research and Community Service (LPPM) Universitas Surabaya iii Table of Content Foreword ...................................................................................................... iii Table of Content ............................................................................................ iv Introduction .................................................................................................... 1 PAKUWON JATI: Building A Sustainable Future ....................................... 3 Market-driven Upcycling of Urban Organic Solid Waste in Indonesia ....... 17 The Role of PUPUK to Support Local Creative Entrepreneurs in Shaping Creative Cities in Indonesia ......................................................................... 24 Social Enterprise Models: The Indonesian Case Studies ............................. 40 iv Introduction Urban development practice has been subject to changes pointing towards more private sector involvement in the build environment in the last decade. The role of private sector on promoting sustainable urban development has been acknowledged with the concept of market-oriented development practices (Heurkens, 2012). The UN Habitat has increased effort to promote re-establishing housing as a priority in debate around sustainable urbanization. The resulting models are leading to social, environmental and financial costs far beyond what the majority of cities can afford (Kacyira, 2016). The transformation of social economic system to deal with market failure has brought the emerging non-market based as a self-regulating market, which fails to prevail over market failures (Polanyi, 1944). This is different from Marx and Engels who draw a distinction between economic and political issues (Block, 2003). Since 1990s, the debate has expanded in various types of institutions. Major universities have developed research and training programs. There is a move from a welfare state to a new welfare mix in which public authorities, for-profit providers, and third-sector organizations share responsibility on the basis of criteria of both efficiency and fairness (Defourny J. , 2001). In Europe, the concept of social enterprise made its first appearance in 1990, at the very heart of the third sector, following an impetus that was first an Italian one and was closely linked with the cooperative movement. In 1991, the Italian parliament adopted a law creating a specific legal form for ‘social co-operatives’ and the latter went on to experience an extraordinary growth. In the United States, the concepts of social entrepreneur and social enterprise also met with a very positive response in the early 1990s. In 1993, for instance, the Harvard Business School launched the ‘Social Enterprise Initiative’, one of the milestones of the period (Defourny & Nyssens, 2010). International research networks have been set up, like the EMES European Research Network, which has gathered, since 1996, research centers from most countries of the EU-15, and the Social Enterprise Knowledge Network (SEKN), which was formed in 2001 by leading Latin- American business schools and the Harvard Business School. Various foundations have set up training and support programs for social enterprises or social entrepreneurs. In Asia, Mohamad Yunus is acknowledged as the pioneer of social business. Instead of profit maximization, business objective aims to poverty alleviation or other social problems, such as lack of education, poor health services, environment problem and lack of technological access (Yunus, 2009). It appears that the practices of social enterprise is quite familiar for us Indonesian people, while the concept of social enterprise has came into a dispute. Indonesian constitution even highlights the role of social economy as the most relevan business model for this country. Along with co- operative, many social works have been dedicated for basic education and health services. The seminar aims to share experiences and research finding from private sector, research institution, and non-government organization to promote sustainable urban development. The first case is Pakuwon Jati, which has been acknowleged with their effort to build iconic shopping center and housing at the business district of Surabaya City. This is not only building suppermall and high-class , but also to build environment as well as nurturing local creative industry to meet global market. The second case is EAWAG, a research centre with world-class research network in promoting waste management. The institution does not only focus on scientific research but also try to involve in market mechanism. The third case is PUPUK, an NGO with aim of enhancing small and medium enterprises. In this event, the institute has intention to share their experiences to promote creative industry, which involves various stakeholders including the national government. Fourth. There are some post doctoral researchers who aim to share their research. One of them is Ina Agustin Murwani, who conducts a research on networks for social enterprise. We expect that the discussion will contribute to the practices of sustainable urban development. Dr. Aluisius Hery Pratono Centre for Business and Industrial Studies Universitas Surabaya 2 PAKUWON JATI: Building A Sustainable Future1 Tunjungan Plaza is the largest shopping center in East Java with net leasable area of 103,202 square meter. Until the end of 2015, occupancy rate at Tunjungan Plaza has reached 98% with the addition of several prominent tenants such Coach, Michael Kors, Mothercare, Birkenstock, First Love, Kate Spade New York, Hong Tang and Furla. Several promotional events were held in 2015 to boost traffic, particularly from the family segment, among others are Mulan the Warrior Princess Live Show, Alice in Wonderland Live Show, Dinosaur Adventures, Meet & Greet Barbie in Rockin Royals, and Barney’s Jukebox Party Live Show. The annual Surabaya Fashion Parade event returned to support the creative industry scene in 2015 and taking the theme of “Infinite Viyage”, comprises a string of events such as the Fashion Designer and , Kids Wear Design Competition and talent scouting event, the Surabaya Model Search. A number of fashion shows were held every day with the support of international fashion tenant in Tunjungan Plaza and the East Java branch of Indonesia Fashion Designers and Entrepreneurs Association (APPMI), and guest designers such as Deden Siswanto, Danjyo Hiyoji, Sofie and Gregorius Vici. The special shopping program Late Night Shopping returned to the delight of the customers. Various prizes were offered during the event such as hotel voucher and electronic equipment through gift voucher given to customers with a certain amount of spending. The management also held several discount programs including the Ramadhan Branded Sale with the participation of various tenants such as The Body Shop, Sogo and the Executive. The acquisition of PT Pakuwon Permai has strengthened recurring revenue in 2015 along with the recognition of revenues from Supermal Pakuwon Indah and Royal Plaza shopping centers in Surabaya as well as Blok M Plaza in Jakarta. In October 2015, the Tunjungan Plaza V shopping center or widely known as the Fashion Avenue was officially opened with new leasable area of 19,602 sq m. With the operations of the Tunjungan Plaza V, total net 1 This article is part of PT Pakuwon Jati Tbk, Annual Report 2015. For detail report, please kindly access http://www.pakuwon.com/public/files/file- investor/annual-report/annual_report_pakuwonjati_2015.pdf 2 PUPUK : Perkumpulan Untuk Peningkatan Usaha Kecil or The Association for Advancement of Small Business, a NGO that concern to develop small Business in Indonesia. Early Rahmawati is a General 3 leasable area managed by the Company increased to 531,000 sq m.Additionally, Ascott Waterplace Surabaya and Sheraton Grand Gandaria City began operations in