Building a model of social entrepreneurship as a concept of social innovation for economic development

Social Entrepreneurship : Many social challenges remain to be addressed in some countries, such as extreme poverty and lack of universal access to health care and education. 

In a global environment, social entrepreneurship has the potential to offer a variety of social solutions by applying entrepreneurial approaches and the power of social innovation to address existing social challenges.

This paper tries to give a literary overview of the concept of social entrepreneurship.

Historical background, characteristics and business model of an effective social entrepreneur.

Social entrepreneurship is considered a social entrepreneur that seeks to create greater value for society. This concept has been developed in various universities.

Social entrepreneurs differ from entrepreneurs in their mission. The role of social entrepreneurship for society is also discussed in this paper. The final discussion will focus on examples of people and organizations in Indonesia who have successfully implemented this concept into their business activities and the potential impact of social entrepreneurship on economic development.

The problem of unemployment is a problem faced by every country, as well as what happens in Indonesia, the problem of unemployment and labor in Indonesia is still a problem that needs to be taken seriously. Moreover, from the data submitted by the World Bank, the East Asian region has major challenges related to the widespread unemployment.

According to data from the Central Statistics Agency (BPS) released data on the situation of the labor force in Indonesia. The February 2015 Publication Unemployment Rate (TPT) was 5.81%, up from the February 2014 tax return (5.70%). The data shows that as of February 2015, the labor force with primary education and below still accounts for 5.19%, while those with undergraduate education and above are only 8.29%.

The high unemployment rate in Indonesia is also influenced by the poor quality of work in Indonesia both in terms of qualifications and skills.

The development of human resources does not show promising results. The United Nations Human Development Programme's Indonesia Human Development Index ranks 110th out of 187 countries. Their record places Indonesia in the category of moderate human development.

A fairly high unemployment rate can indeed create a social problem: poverty.

Several practical solutions are needed to overcome social problems due to high unemployment due to limited employment opportunities.

This situation will be exacerbated by the situation of global competition (e.g. the implementation of the ASEAN Economic Community/AEC) which allows Indonesian university graduates to compete freely with foreign university graduates.

Therefore, graduates need to be guided and supported not only to find their direction as job seekers, but also to prepare them to create jobs (Sharti and Sirine, 2009).

One way to overcome social problems that are currently the main concern of developing countries, including Indonesia, is through entrepreneurship or social development which is commonly called social entrepreneurship.

As a relatively new field develops, various conflicting opinions will emerge about what social entrepreneurship is, and what is known as social entrepreneurship.

Existing opinions and formulations tend to describe good types of social entrepreneurship, along with the characteristics of their roles and activities. There may also be more than one type of social enterprise, based on the evidence that there are different types of entrepreneurs. This paper examines many formulations of social entrepreneurship defined by organizations and experts in their fields.

Problem Formulation

To clarify what is the role of social entrepreneurship as an innovative idea in economic development, we formulated the following problem based on the above background.

How Is Social Entrepreneurship Developing in Indonesia?

What is the role of social entrepreneurship in the economic development of the country?

It is intended to provide a literature review of its practice. Topics covered in this article include the concept of social entrepreneurship, the characteristics of social entrepreneurship, business models and aspects of social entrepreneurship, examples of social entrepreneurship in Indonesia, and the role of social entrepreneurship in economic development.

THEORETICAL REVIEW

The Concept of Social Entrepreneurship

The definition of social entrepreneurship has been developed in various areas that include non-profit, non-profit, public sector and a combination of all three. According to Bill Drayton (founder of Ashoka Foundation), as the originator of social entrepreneurship, there are two central things in social entrepreneurship. First, there is social innovation, which can change the existing system of society. Second, behind these innovative ideas are individuals who have vision, creativity, entrepreneurship (entrepreneurial spirit) and ethics. Hulgard (2010) more broadly summarizes the definition of social entrepreneurship as the creation of social value through collaboration with individuals or other community organizations involved in social innovation, usually implying economic activity.

Social entrepreneurship is a term derived from entrepreneurship. Social means society and Entrepreneurship is a combination of two words that mean entrepreneurship. A simple definition of a social entrepreneur is someone who understands social problems and uses entrepreneurial skills to bring about social change, especially in the areas of welfare, education, and health (Cukier, 2011).

This is in keeping with what Schumpeter discovered in Sledzik (2013), which shows that an entrepreneur is a person who tries to break into an existing system by introducing a new one. It is clear that social entrepreneurs also have the ability to face challenges. Another definition is someone who dares to step outside the established realm. In contrast to business entrepreneurship, the results achieved in social entrepreneurship are not only profit, but also a positive impact on society.

Social entrepreneurs are agents of change, realizing the ideals of changing and improving social values and can be the inventor of various opportunities for improvement (Santosa, 2007).

Social entrepreneurs are always involved in the process of innovation, adaptation and learning, acting continuously regardless of the obstacles or limitations they face, and being accountable to society for the results they achieve.

The above thorough definition provides an understanding that social entrepreneurship consists of four main components: social values, civil society, innovation and economic activity (Palesangi, 2013).

- Social value. This is the most characteristic element of social entrepreneurship, bringing tangible social benefits to society and its surroundings.

- Civil Society. Social entrepreneurship generally arises from the initiative and participation of civil society by optimizing the social capital that exists in society.

-Innovation. Social entrepreneurship solves social problems in innovative ways, such as combining local wisdom with social innovation.

- Economic activity. Social entrepreneurship generally manages to find a balance between social and business activities.

Business/economic activities are developed to ensure the independence and sustainability of the organization's social mission.

Social entrepreneurship, which was originally considered a "non-profit" activity (including philanthropic activities), has now shifted to an entrepreneurial private business activity and is now called social entrepreneurship. 2014).

As shown in the following diagram by Alter (2006), social entrepreneurship is currently at a crossroads between non-profit and pure business organizations. It should be used as a tool, not as a goal. The purpose of innovation is to change or improve existing circumstances for the better, but not all changes can be called innovations (Saiman, 2011).

Social innovation is associated with the improvement of social relations and the improvement of well-being (Moulaert et al., 2013).

Moulaert (2013) also argues that social innovation can begin anywhere in the economy, not only in the non-profit sector, but also in the public and private sectors. On the other hand, social innovation is not limited to welfare issues, but can also be related to issues of environmental protection and sustainable development.

Social innovation is closely related to social entrepreneurship. Social innovation is the basis of how social entrepreneurs conduct their business and activities in order to improve systems, find new approaches, and find ways to create solutions for better environmental change (Widiastusy, 2011).

A social entrepreneur seeks innovative ways to ensure that companies have access to the necessary resources while creating social value (Mort and Weerawardena, 2003).

Aspects of Social Entrepreneurship

The implementation of social entrepreneurship is certainly influenced by several aspects. According to Dees (2002), there are several aspects that affect social entrepreneurship. The process of defining a goal or mission.

Mission is what an organization must achieve in order to realize its goals and become successful. The mission is very important for employees and stakeholders involved in the organization to know about the organization and its role, programs and outcomes to be achieved in the future.

Opportunity Identification and Evaluation Process

The identification and evaluation of opportunities is one of the most important aspects of social entrepreneurial leadership. In social entrepreneurship, opportunities are seen as new in different ways to create and maintain social value. Various interesting ideas are born, but not all of these interesting ideas can be turned into opportunities to create and maintain social value.

Social entrepreneurs should seek to identify opportunities to create or maintain social value. Evaluating opportunities is a process that combines data and instincts. This method is science and art. Collect the necessary information related to the size, range, and time available. In the end, of course, any decision-making process requires a strong instinct.

Risk Management Process

Social entrepreneurs face risks and challenges in realizing their mission and ideas. Risk is an unexpected opportunity. Two elements unique to risk are, first, that risk does not take into account its downside, so it can be defined as the possibility of an unexpected event occurring. The second element of risk is the potential for unintended outcomes to actually occur.

Therefore, in realizing his ideas and ideas, the social entrepreneur must take into account everything that will come. Obstacles to social entrepreneurship can appear unexpectedly.

Identifying and Attracting Customers Consumers or customers in social entrepreneurship are slightly different from consumers in ordinary business.

In the definition of social entrepreneurship, consumers are those who successfully support a social mission. This participation can take the form of using services, participating in activities, volunteering, donating funds or goods to charity, or even purchasing services or products produced by the organization. The focus of social entrepreneurship is to channel the results of all resources to create social value.

Customer identification is very important because the customer is the market for your goods and services.

Cash Flow Forecasting To stay active, social entrepreneurs need to be able to estimate the liquidity needs of their business. They have to decide how to get money to keep the business going. Of course, this task is more complicated for social entrepreneurs than ordinary entrepreneurs. Yes, but in most cases, the income from the services provided is far from the necessary operating costs.

In such cases, the donation plan should be carefully and realistically designed, since any fund can fill such a void. Reasonable.

The challenge for social entrepreneurs is that they must be selective in planning cash flow so that their activities remain in accordance with the mission that has been set.

Social Entrepreneurship Business Model

Osterwalder and Pigneur (2010) define a business model as the reason for how an organization creates and delivers value. A business model is a way of thinking about how a company makes money. Business models and organizational forms have a significant impact on a company's ability to grow and develop sustainably. As with any business in general, social entrepreneurship opportunities need to be supported by smart and realistic business models.

Social entrepreneurs can create new business models whose models can improve the performance of social entrepreneurs. Some references to the business model of social entrepreneurship suggest designing a business model of social entrepreneurship, as shown in the diagram below (Grassl, 2012). The business it builds can find value individually as an ecosystem or collectively as a whole.

Social entrepreneurship has a 'nest' when an organization can rely on cooperation in its environment and work intensively with stakeholders.

Information received from customers about the changes taking place in the market can be interpreted as dynamic signals of social entrepreneurship. The social entrepreneur or community needs to assimilate and process this information efficiently to generate the social value it seeks.

This process is known as metafiltering.

Regarding business methods, social entrepreneurs create hybrid organizations that adopt business methods, but the end result is the creation of social value (Winarto, 2008).

The Development of Social Entrepreneurship in Indonesia

Observing the Development of Social Entrepreneurship in Indonesia A very interesting phenomenon today because it is different from entrepreneurs. The concept of social entrepreneurship reached its peak in the decade of 2006. In the eyes of the international world, Nobel Peace Laureate Mohammad Yunus is evident for his work in the field of microeconomics, especially for Bangladeshi women. This is a recognition and appreciation for social entrepreneurs.

Since then, there has been a heated debate about social entrepreneurship, including in Indonesia. Given Moh's success story, this makes sense. In fact, Yunus, who carries the concept of Grammen Bank as an effort to solve social problems in his own country, is not much different from the social problems that occur in Indonesia. The concept of social entrepreneurship seems to be another way of thinking that can solve complex social problems that occur in Indonesia.

Originally considered a "non-profit" activity (including philanthropic activities), social entrepreneurship is now shifting to business-oriented activities (the activities of entrepreneurial private enterprises). The legendary success of Grameen Bank and Grameen Phone in Bangladesh is an example of a change of direction in the delivery of social entrepreneurship programs. This is an incentive for the business world to engage in social entrepreneurship activities because it can generate economic benefits.

The complexity of social problems faced in Indonesia has encouraged the growth of various social entrepreneur communities, two of which are the Indonesian Social Entrepreneurs Association (AKSI) and its equivalent in Indonesia.

Below are brief profiles of the two communities. national progress. Setara Indonesia Foundation helps SMEs and cooperatives to access these opportunities and opportunities, thus enabling them to grow and develop. Indonesia Setara's main focus is on building capacity and network. Indonesia Setara opens access to education, access to capital, access to resources and networks.

Through this movement initiated by Sandiaga Uno, people are expected to have a fighting spirit to change their lives, starting from themselves, their families, communities and communities.

The Indonesian Equality Movement focuses on empowering MSMEs. This is the main key to increasing the chances of a country 'survival'. Indonesia Setara also actively visits universities and organizations as a direct 'involvement' to invite people to make changes towards equality.

Indonesian Social Entrepreneurs Association (AKSI)

AKSI is a forum or organization that attracts social entrepreneurs from all over Indonesia with a vision to create an environment conducive to the growth of social entrepreneurs in Indonesia. The ACTION missions are:

1. Creating an environment conducive to the growth of social entrepreneurship in Indonesia.

2. Promote sustainable social entrepreneurship through capacity building services.

3. Strengthen engagement and engagement in the social sector by networking with various stakeholders at the national, regional, and international levels, both in the field of social entrepreneurship and across sectors.

AKSI is a social enterprise group that aims to build sustainable community empowerment through innovation in the social field.

AKSI was born out of concern over the situation of Indonesian society which faces many social problems such as poverty and environmental destruction. Some of the programs owned by AKSI include strengthening membership, strengthening the entrepreneurial movement in Indonesia, and strengthening institutional associations.

AKSI is also actively developing social entrepreneurship and traveling to remote areas to help solve social problems there.

Social Entrepreneurship Awareness in Indonesia

With the emergence of the social entrepreneurship community in Indonesia, the awareness of social entrepreneurship by various stakeholders has become real.

This endorsement is also reflected in the disbursement of funds contested by various social entrepreneurs through various projects proposed by social enterprise associations. The funds are not provided exclusively by the government, but the government has the right to ensure the interests of the recipients of the funds. This is to ensure that the funds are not misused by the recipient. Social entrepreneurs who receive grants will of course work on projects that benefit their communities.

Create jobs, reduce homelessness, and improve the environment. The government then reviewed the funds spent.

The government will review the benefits received from the project subject.

Awareness of the existence of social entrepreneurship in Indonesia was further strengthened by the announcement of the Social Entrepreneurship Award organized by a number of institutions, including the consulting firm Ernst and Young. Ernst and Young have expanded the types of awards they offer by establishing social entrepreneurship as one of their award categories. In addition, there is also the Ksara Swadaya Award initiated by the Bina Swadaya Foundation, the Ksara Swadaya Award is given to business people, motivators, awards to groups, writers and the media. Entrepreneurship.

Many organizations have tried to build social entrepreneurship around the world, such as Ashoka Fellows.

Social Entrepreneurship Actors in Indonesia

The field of Social Entrepreneurship is based on a broader field: Entrepreneurship.

Entrepreneurship is developed using empirical data from the business world. Many entrepreneurial coaching initiatives are useful as a reference for fostering social entrepreneurs.

Pursuing the world of social entrepreneurship requires a high commitment and willingness to sacrifice everything from money, time and never giving up. And Indonesia is fortunate to have enough social entrepreneurs to support the growth of social enterprises in the community. Below are examples of groups and individuals involved in social entrepreneurship in Indonesia that have won various awards.

Tunas Mekar Women's Farmer Group: One of the Simantri administrators who has been very successful in boosting the economy of farmers who are members of the Integrated Farmer System (Simantri). Through our experiments and the results of various searches on the Internet, we have produced various by-products of Ettawa goat milk, including bars, liquid soap, and goat's milk crackers. At that time I was not satisfied and started trying to make body scrubs and hand body lotions from goat's milk. All of these products are combined with various agricultural products including papaya, aloe vera, chocolate, coffee, lemongrass, mengkudu, and strawberries. Marketing of these various products spread throughout Bali, from Banyuwangi to Malang. The market share is still very open due to the ever-increasing demand.

On the other hand, by-products such as bio-urine, biogas, and fertilizers are effective as long as kapokutan members make the most of them. Fertilizers and biourine are used by farmers in managing the Robusta coffee plant covering an area of 110 hectares which is one of the region's leading agricultural products. Passion, hard work, perseverance, innovation and creativity, as well as an entrepreneurial spirit are the keys to the success of the Integrated Agriculture System (Simantri) in Bali.

2. Srini Maria: Ibu Buncis Merapi The concept developed by Srini is to apply the planting pattern method to farmers, especially female farmers in Sengi Village, Magelang. Because Sengi Village is a village that is very close to Mount Merapi, the area is often called the KRB III area, and the Sengi area is ± 8 km from the top of Mount Merapi, so it is a disaster-prone area. The livelihoods of the people in Sengi Village include agriculture, plantations, animal husbandry and trade, some are self-employed and working.

The following is the business development that Srini has done with her group members: She planted peanut bushes on an area of 00 square meters.

From this area, exports can be started by sending 25-30 kilograms (kg) of red beans to Singapore through Pitoyo, a farmer and vegetable collector from Semarang Regency.

- With the development of exports, the number of members increased to 2 members. Its members are not only from Gowok Ringin Hamlet, but also from two neighboring settlements, Gowok Sablan Hamlet and Gowok Pos Hamlet, as well as Trogorele Village in Boyolali.

The planting area of Merapi Asri Group soybeans reaches 1 hectare.

- Pioneer in the cultivation of beets for export. Beetroot, which is said to strengthen blood, treat diabetes, and is used for natural food coloring, among other things, will be exported to Singapore at an order value of Rs.. 000.

In this activity, the impact on the selling price of chickpeas for export is much higher than in the domestic market. In addition to exports, Merapi Asri Group continues to cooperate with vegetable collectors in Semarang Province to help distribute red beans in the local market. The social entrepreneurship started by Srini encourages women and all farmers to stay ahead of the market development. Therefore, farmers are not always affected by the price of vegetables in the local market.

3. Baban Sarbana: Connecting orphans with the world through online networking for a brighter future Baban Sarbana is the founder of the Foundation for Beneficial Science Learning (ILNA). 

This foundation started Pondok Yatim Mandiri since March 2010 with a social movement called YatimOnline. YatimOnline has been awarded as Aksi Inspiratif KlikHati Award 2010, Ten Outstanding Young Person 2012 from Junior Chamber International – Indonesia, Episode "The Champion" in BChannel TV, Indonesia Changemakers

Forum, partnering with Dompet Dhuafa for the "Glorify Orphans" program,

partnered with BAZNAS for the establishment of Ciapus Smart Home. The focus of YatimOnline's activities is in the fields of education, economics and health.

-In the Field of Education, YatimOnline established Ciapus Smart Home, Raudhatul Athfal An- Nahlya (children's education), and Village Library;  In addition to providing scholarships to outstanding students.  In the health sector, routinely carry out the Dhuafa Orphan Family Doctor program, which is a free health service to residents which is carried out every 3 months and RUTIL In the economic sector, forming a Business Group called Yatim Dhuafa, which is a micro finance startup institution that provides loans for Mothers of Yatim Dhuafa who have a business that is already running and needs capital assistance,  Taruna Wirausaha, work/business opportunities for children who want to increase their income and start Sedawai (Indonesian Entrepreneurial Village School).

Elang Gumilang : Subsidized Simple Home Ownership Credit (KPRS)

This young man born in 1985 tried to seize opportunities in the property business while helping the lower middle class of the economy to own a house. As a student of Bogor Agricultural University, Elang is the president of Elang Group, a group of house builders.

In 2007, Elang partnered with Bank Tabungan Negara (BTN) to provide Subsidized Basic Home Ownership Loans (KPRS) to those with a monthly income of less than Rp 2.5 million. Prices start at Rp 25 million (type 21/60), 5% p.a. to Rp 55 million (type 36/72) for 7.5% p.a. Prices range from Rp25,000 to Rp90,000 per month. The opening project of Griya Salak Endah housing complex was a success with more than 50 houses sold. The buyers are workers, dealers, tire mechanics and teachers.

Winner of Indonesia's Best Independent Young Entrepreneur Award in 2007, he was inspired to provide affordable housing for 'little people' who have trouble buying it.

Fajri Mulya Iresha: Zero Waste Indonesia, When Indonesia Targets Zero Waste From educating the public about organic and non-organic waste collection to promoting waste banks around Depok.

And Fajri's concern for the scavengers and marginalized people who participated in this empowerment. The presence of Zero Waste Indonesia in one of the national banks in Indonesia has succeeded in promoting around 25 waste banks, each containing around 30 families, with a total of 500 to 500 waste banks followed by 750 people. Zero Waste empowers employees from scavengers, unemployed youth and drug user backgrounds, and to date, Fajri has generated 200 kg of plastic waste per day and has an average sales per unit of 30 million.

These results show that saving non-organic waste can increase people's income, and part of the savings proceeds at the Waste Bank will be used to build environmental infrastructure.

Zero Waste Indonesia raises public awareness about the disposal and choice of household waste, empowering scavengers and former marginalized drug users who work at Zero Waste Indonesia to reduce environmental damage caused by plastic waste. problem. Zero Waste Indonesia activities have been introduced in several regions such as Jambi and Pekanbaru. Zero Waste Indonesia's future development plan aims to work with student volunteers to create crafts, recycled works such as bags and decorations from recycled waste. From the above profiles, it is interesting to note that there are similarities in: They are entrepreneurial, creative, innovative, and socially conscious.

The country needs more people like him who can balance business and social activities.

Of course, these social entrepreneurs still have a long way to go to prove that they are true social entrepreneurs.

The role of social entrepreneurship in economic development

The role of social entrepreneurship can be important both internally and externally.

Internally, the role of the social entrepreneur is to break down the level of dependence on others, create confidence and increase the attractiveness of the author. From an outside perspective, entrepreneurship can play a role in providing employment opportunities to people who do not have job opportunities.

In this way, entrepreneurship can help solve or eliminate the unemployment rate and other social problems that have been weighing on people's minds.

Social entrepreneurship also affects economic development because it can provide social values and a creative economy as explained by Santosa (2007):

a. Creating jobs The perceived economic benefit of social entrepreneurship in different countries is the creation of new jobs, which has increased significantly.

Innovating and creating new products or services that people need.

Innovation and creation of social services that have not been taken care of by the state can be carried out by social enterprise groups, for example: countering HIV and drugs, eradicating illiteracy, malnutrition. Often the standards of services provided by the government fail because they are too rigid to meet the standards that have been set. On the other hand, social entrepreneurs get away with it because it's done with dedication and deviating from the social mission.

c. Become Social Capital

Social capital, which consists of shared values, trust, and collaborative culture, is the most important form of capital that can be created by social entrepreneurs (Leadbeater in Santosa, 2007). The social capital cycle begins with social entrepreneurs first accumulating social capital. In addition, a growing network of trust and cooperation is built so that physical development, financial aspects and the availability of human resources are built. When business units (organizational capital) are formed and when social enterprises begin to profit, more social space is built. Below is a description of the "virtues of social capital" put forward by Leadbeater in Santosa (2007). d. Increased equity

One of the goals of economic development is the realization of equity and justice in the welfare of society.

Through social entrepreneurship, the goal was realized, because those entrepreneurs who initially thought only about the maximum profit, then began to think about the distribution of income in order to achieve sustainable economic development. The success of the Grameen Bank is a testament to this superiority. Study

Nega (2013) on the impact of social entrepreneurship on economic development in Africa concludes that social entrepreneurship plays an important role in development, where social entrepreneurship promotes the development of society among different groups of people who can promote development.

In addition, social entrepreneurship promotes problem solving that creatively develops the skills of society.

Social entrepreneurs play an important role in promoting initiatives from different sectors (government, society and enterprises) to meet the economic and social challenges of the region and local communities (Squazzoni, 2008).

Cross-sectoral initiatives are needed to increase the capacity of regions or communities to organize innovative solutions to socioeconomic problems beyond the borders of state markets and institutions.

CONCLUSION

Social entrepreneurship is a form of business that aims to help society. Social entrepreneurship can be a form of social enterprise, but not all social enterprises are forms of social enterprise.

Social entrepreneurship is an innovative initiative (financial or non-financial, profitable or non-profit). Social entrepreneurship sees the problem as an opportunity to form new business models that benefit the surrounding community. The result to be achieved is not material profit or customer satisfaction, but how the ideas conveyed can have a good impact on society.

Indonesia's economic development still leaves many social and environmental problems. And of course, the role of local communities is needed to help the government overcome many of these problems. The role of the surrounding community that can be done is the implementation of social entrepreneurship, namely doing business that can help social problems.

Social entrepreneurship today is an interesting phenomenon because it has many differences from traditional entrepreneurship. While traditional entrepreneurship focuses more on material income and only on customer satisfaction, social entrepreneurship involves a variety of sciences in development and practice in the field.

Although many people think that social entrepreneurship is just a social activity, social entrepreneurship is basically a business. As a company, social entrepreneurship is inseparable from the rules of business life in general, and social entrepreneurship also requires measuring tools to attract investors for business development. Further research and studies can use computer methodologies that combine the interests of social entrepreneurs and investors through Social Return on Investment (SROI). While SROI allows social entrepreneurs and investors to define several parameters which are then quantified as components of investment calculations.

Financial and institutional sustainability has always been the biggest challenge of social entrepreneurship. Social entrepreneurship can develop two alternative partnerships, namely partnerships with public institutions and partnerships with the business world.