To the Economic Development and Changing their Position in Indonesia R S C W

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ELEVANCE OF

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OCIAL

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APITAL OF

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OMEN

To the Economic Development

and Changing their Position in Indonesia

Student Name:

Denise Eichhorn

Institutions:

Newcastle University

University of Groningen

Student Numbers: 140608320

S2857405

Courses:

NBS8199

EBM091.A25

Dissertation (Dual Award)

Master Thesis IB&M

Supervisors:

Dr. Stefanie Reissner

Dr. B.J.W. Pennink

Due date:

February 8

th

2016

Submission date: January 31

th

2016

A

B S T R A C T

This paper is a contribution to the social capital development of female entrepreneurs in Indonesia. The purpose is to derive theoretical knowledge of the specific situation of women and also to give practical recommendation for policies. The research is based on the social network theories by Putnam and Bourdieu as well as considering the specific Indonesian context, in which women are not seen as equal to men and have to fulfill different responsibilities within the household.

Literature suggests not a lot is known by researchers and practitioners about the influences of social capital of Indonesian female entrepreneurs because past research has focused on male networks or on setting in more Western developed environments. The academic gap compromises which kind of ties (bonding, bridging and linking) are more helpful: First for engaging in entrepreneurial activities and contributing to local economic development. And second which kind of ties can change the position of women resulting in a contribution to local social development and third how women can extend their networks.

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C K N O W L E D G E M E N T S

The author would like to thank supervisor Dr. Stefanie Reissner and Dr. Bartjan J. W. Pennink for sharing expertise, valuable guidance and encouragement by providing feedback, suggestions and inspiration. The author would like to thank all the interviewees who participated in this research for their time and the insight on entrepreneurship in Indonesia. The author will never forget the support of family and friends who supported and reassured the author in the work of the project, no matter if they were close or far away.

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E C L A R A T I O N O F

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R I G I N A L I T Y

I declare that the text and the work presented in this document is original and that no sources other than those mentioned in the text and its references have been used in creating it.

The Newcastle University Business School and the Faculty of Economics and Business of the University of Groningen are responsible solely for the supervision of completion of the work, not for the contents.

Signature:

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A B L E O F

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O N T E N T

Abstract ... 2

Acknowledgements ... 3

Introduction ... 6

Research Setting: Indonesia ... 6

Research Questions ... 8

Approach & theoretical foundations ... 9

Contribution ... 13

Structure ... 15

Literature Review on influences of Social Capital ... 17

Social Capital ... 17

Local Economic Development through Entrepreneurship ... 20

Social Development through Changing the Position of Women ... 21

Indonesian Context and Culture ... 24

Gotong Royong ... 24

Islamic religion ... 25

Participation of Women in the Informal Economy ... 27

Methodology ... 29

Research Philosophy & Methodology ... 29

Data collection ... 30

Data Analysis ... 33

Ethical Consideration ... 35

Limitations ... 36

Findings ... 37

Social Capital: Information and Motivation ... 38

Social Development through Changing the Position ... 43

Development and positive Influences ... 45

Summary of Findings ... 47

Conclusion ... 50

Policy Recommendations ... 52

Direction for future research ... 55

Bibliography ... 56

Appendices ... 64

APPENDIX I: Interview Guides ... 64

APPENDIX II: Table Of Themes Derived From Cut Codes ... 68

APPENDIX III: Project Information Sheet for local Women ... 76

APPENDIX IV: Consent Form ... 78

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N T R O D U C T I O N

Being capable of building up networks has proven to be an essential skill for managers in the globally connected business world, and studies have shown positive effects of networks on firm growth and its performance (Watson, 2007). The ability to build and maintain networks is especially important for entrepreneurs or managers of new ventures (Li & Zhang, 2007). Networks consist of connections between people that allow them to exchange resources and information which supports and facilities the business activities. That research focused on businesses in stable economic settings and tended to investigate privileged or well-educated persons, who built networks with persons who are most alike as themselves. Now even networks can also be seen as intangible assets that can support people who miss other resources and live in less stable economic settings that are hardly developed.

For setting the scene of this research, first the specific conditions in Indonesia and why it is interesting and essential to conduct this research in Indonesia will be discussed. Then specifying the research gap will lead to the research question, and an introduction of the theories on social capital will lead to a specific formulation of the three research questions. The contribution of this research will show why answering the questions is important and valuable to the research about local economic and social development.

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ESEARCH

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ETTING

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NDONESIA

projects focusing on women and should go hand-in-hand with the social development. This research can contribute to ongoing and future projects by showing ways how women can develop networks themselves. The country is characterized by various ethnical groups and this multiversity can sometimes lead to tensions or even to conflicts between groups. By social development of women the tensions could decrease and in this work it is hoped to contribute to this as well. Another aspect that highlights the social development along with economic development is the disadvantaged position of many women in Indonesia, being secondary compared to men. There is high discrimination of females when it comes to employment, salary, access to resources and assets or protection against violence (SIGI, 2015). Therefore focusing on women in a study and concentrating on their engagement in networks can offer valuable clues about how networking can contribute not only to entrepreneurial activities but also the improvement of the position of women and even reducing social tension caused by ethnic diversity.

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ESEARCH

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UESTIONS

Ideas of connecting with helpful persons as important assets for setting up business can be transferred to a context, in which tangible assets are harder to access for persons and where social differences in status lead to thinking in classes as it is the case in Indonesia. Although in this kind of economically developing environment it seems more difficult to build ties between people of rural communities and persons in powerful positions, these connections can be rewarding for the development of the local community from an economic but also from a social perspective. Literature proves the relevance of networking but before local communities can profit from their network, they first need to build it and develop ties to the “right” persons. In the specific context of local development projects in Indonesia Wolfard (2009) states the importance of social contacts especially for the long-term performance of projects. Since networks consist of various different individuals, there might be different connections (dimensions of social capital) that are more supportive than others, or some ties might be even harmful for economic development (knowing the “wrong” people). Developing networks then means creating more ties with the right helpful or supporting person and avoiding creating relations with the wrong persons. This results in the following overarching research question:

RQ1.: How do the networks of Indonesian women lead to engaging in

entrepreneurial activities and changing their position in the networks? Since this question considers an economic but also social dimension and as mentioned networks can consist of various different type of actors, the question should be split up into the following two sub-questions:

RQ1.1.: How does social capital influence the engagement in entrepreneurial activities?

RQ1.2.: How does social capital influence the position of women?

have been able to successfully use their social capital for social and economic advancements and have been looking for the right persons to enrich their networks.

RQ1.3.: How can Indonesian women be encouraged to build up ties to enrich their networks in order to make social and economic advances?

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PPROACH

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THEORETICAL FOUNDATIONS

As mentioned, there are three different dimensions of social capital (= ties) between actors that can be distinguished within a network:

(1) Bonding social capital is very strong and gives families and communities a sense of identity and common purpose. They see themselves as being similar and the trusting relations have been built over a long time.

(2) Bridging social capital is weaker but the ties cross various social gaps such a religion, class, gender, etc. The networks are inclusive to outsiders. The relations are characterized by respect and mutuality between people that are aware that they differ in some socio-demographic sense or their social identity. The individuals are more or less equal in terms of their status and power. Bridging can be understood as a horizontal metaphor.

(3) Linking social capital connects people of different positions in authority or influence and can give communities access to formal institutions. To clearly distinguish it from bridging social capital Szreter & Woolcock (2003) define it as “norms of respect and networks of trusting relationships between people who are interacting across explicit, formal or institutionalized power or authority gradients in society” (Szreter & Woolcock, 2003, p. 6). The vertical ties of linking social capital cross power differential and connect people from local communities with for example bankers, law enforcement officers, social workers or health care providers. Those ties are respectful and trusting to the representative of the formal institutions. Many of the public and private services can only be delivered through on-going face-to-face interaction (e.g. classroom teaching, general practice medicine, and agricultural extension)

form of power within the culture as a domain of practice (“habitus”) towards which perception converge and which should not be questioned or challenged by individuals. For example gestures of giving and kindness (including marriage) can be a form of domination as “symbolic violence” because it binds the receiver to the other person through feelings of trust and obligation (Rankin, 2002). Social change is only possible if the dominated groups recognize their actual domination by a human construction and “awake” to form alternative values by challenging the ones taken for-granted. “It is only when the dominated have the material and symbolic means of rejecting the definition of the real that is imposed on them through logical structures reproducing the social structures (i.e. the state of the power relations) and to lift the (institutionalized or internalized) censorships which it implies, i.e. when social classifications become the object and instrument of class struggle,…” (Bourdieu, 1977, p. 169). In countries (for example Indonesia) where women are not considered equal to men, they can be considered as a different social class that is dominated by the male values and habits (as examples given by Bourdieu show).

assume that there are ties that are not beneficial for the persons and have negative influence on business activities while the same person has ties supporting entrepreneurship. This leads to specifying the first two sub-questions into:

RQ1.1.: How do different ties (bonding, bridging, linking) influence the engagement in entrepreneurial activities?

RQ1.2.: How do different ties (bonding, bridging, linking) influence the position of women?

Figure 1.1: Model of research questions, causal connections and levels of investigations (Source: Own illustration)

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ONTRIBUTION

Part of the tasks of a Local Economic Resource Development (LERD) team is to establish contact between different stakeholders since the network models suggests that cluster of businesses, households, technical assistance, organizations etc. can benefit from skills and presence of each other. The findings of Wolfard (2009) suggest that projects perform better on a long-term scale if all actors stay actively involved in the networks that were created. But so far there has been no explanation why those networks were helpful and still support the people involved even when the projects are completed. For answering this question, as the literature shows, different kind of ties have to be

Social Capital

Linking Bridging Bonding Local Economic Development Engagement in Entrepreneurial Activities Individual Level Community Level Social Development Position of Women

RQ1.1.: How do different ties influence the

engagement in entrepreneurial activities?

RQ1.2.: How do different ties influence

the position of women?

Define Influence of different kind of ties: Positive or negative?

RQ1.3.: How can Indonesian women be

encouraged to build up ties to enrich their networks?

considered. A focus on female network participants can give insight for a disadvantaged group of people. Women have shown to have strong ties within the community and kinship especially in low-income groups. That proves that women do built social connections in their community. But does not mean that they develop networks which include various interconnections between the actors. Besides that their ties do not necessarily lead to gaining control over resources or improving their quality of life. It also has to be studied if the changes on the individual level also have effects on the community level, in specific how findings are related to development in an economic as well as social aspect. Molyneux (2002) points out that much of the literature has ignored gender relations and is mainly focused on the men’s networks which leaves women disadvantaged in research.

We hope to contribute to knowledge on which kind of ties within a network are important/ supportive for women, how those ties can lead to entrepreneurial activities of the woman or a change of her position in the social network. Another aspect that has to be considered simultaneously is that studying networks and different kinds of ties from a female gender perspective should also support refining policy approaches to poverty alleviation, increasing social integration and sharing social welfare effectively (Molyneux, 2002).

Figure 1.2: Excerpt of Multi-level, multi-actor model for local economic development, Source: Pennink, 2014, http://bjwpennink.wix.com/ledmodel#!model/cjg9 Retrieved: 18.12.2015

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TRUCTURE

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I T E R A T U R E

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O C I A L

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A P I T A L

The topic of female entrepreneurs in developing countries and their social capital has been mostly neglected in the literature (Molyneux, 2002). The following review of literature intends to give an indication of the topics that are sufficiently and reliably represented to build up the framework for the conducted field work. Social capital as theoretical foundation for this research was already explained earlier so the literature review will first give a recapture on social capital and give an overview on how different kind of ties can be distinguished. Then, the term of local economic development should be considered, subsequently how social capital is connected to it via entrepreneurship. Besides, regardless whether a social network leads to entrepreneurial activities or not, different kind of ties within the network can also have a positive or negative influence on the position of the woman and her power to be self-determined. In a community in which women gain more power over time and take more central position, social development can be considered as ongoing and successful which can be measured by various indicators. The general link between social capital and the position of women is discussed and how social development can also mean being more inclusive.

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OCIAL

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APITAL

Ahmad, & Gill, 2012). Besides, some authors state that bridging social capital is more likely to generate positive externalities and can “get members ahead” through crosscutting ties (Coffé & Geys, 2007). “Linking capital” can be a substantial support for enterprise advancement. Its absence, combined with insufficient institutions, can hinder development progress (Turner, 2007). Nonetheless no studies could be found considering its effects on social development from a gender perspective. Furthermore although it might have positive effects on welfare, it can also be abused for negative purposes as for example nepotism, corruption, and suppression that differ in how they affect men and women (Szreter & Woolcock, 2003). In empirical work it is important to separate the effects of bonding, bridging and linking social capital are expected to have on economic and on social phenomena (Coffé & Geys, 2007). The level of the individual person, the different type of ties can support or discourage the entrepreneurial activities of the women, which on the other hand are one determinant of the local economic development (Pennink, 2014).

Bonding Social Capital Bridging Social Capital Linking Social Capital

Strength1 Stronger ties Weaker ties Weaker ties

Relation2 Trusting relations have been built over a long time

Relations of respect and mutuality

Norms of respect and networks of trusting relationships

Between2 People who see themselves as being similar

People who know that they are not alike in some socio-demographic or social identity sense

People who are inter-acting across explicit, formal or institutiona-lized power or authority gradients in society Function Gives communities a

sense of identity and common purpose

Social interaction and economic exchange across the social identity boundaries

Accessing public and private services that can only be delivered through on-going face-to-face interaction Examples Mother or Father,

Brothers and sisters or other close relatives, child hood friends

Traders seeking counterparts in overseas markets, participants in artistic activities, professionals at conferences Bankers, law enforcement officers, social workers or health care providers

In one word3 Family Friends of friends Elected leader

Metaphor3 Horizontal Horizontal Vertical

Sources 1 Granovetter, 1973

2

Szreter & Woolcock, 2003, p. 5-6

3

Aldrich, 2011, p. 10-11

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OCAL

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CONOMIC

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EVELOPMENT THROUGH

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NTREPRENEURSHIP

Local economic development is a process in which partnering between the local stakeholders is encouraged and facilitated. The local resources should be used competitively by designing and implementing joint strategies that will create jobs and sustainable economic activities (Canzanelli, 2001). Working together jointly gives new roles to stakeholders, such as the public sector or local universities. It is important to consider the local level of the projects in which they are embedded. Of cause different stakeholders will bring along different interest in for example a particular project involving a local community which only emphasizes the importance of active communication involving all parties. Following the model by Pennink (2014), human coordination of entrepreneurial activities influences empowerment and bridging social capital, which is connected to entrepreneurial activities, the role of outside actors and local leaders. The activities on the local level determine the quality of life of local people and also the return on investment for entrepreneurs, entrepreneur groups or Multi-National Corporations. Since networks not only consist of bridging ties, but also bonding and linking ties, these ties might also contribute to (or might hinder) the engagement of individual female persons in entrepreneurial activities, which if present can contribute to the economic development.

Engaging in entrepreneurial activities includes all actions related to engaging in start-up enterprises. Start-up enterprises are formed by entrepreneurs or groups of people with the propensity to engage in start-up enterprises and its execution with the aim of generating profits. Entrepreneurship is important for local people in Indonesia because it organizes economic activity in the communities and offers the basis for the local economic development. Of cause there is no guarantee that starting a business will create profits and income for the founder. Nevertheless even if their business does not survive for long, it is a respectable source of work for many Indonesian people.

Other studies focus on entrepreneurs as units of analysis, for example how entrepreneurial networks are developed and used by female entrepreneurs in Bangladesh, and how a third party can stimulate and encourage network development (Maas, et al., 2014). Paul et al. (2013) show that rural Malay herbal entrepreneurs are comparable disadvantaged because they miss networking skills, which emphasizes the value of social networking in entrepreneurship. These examples of research projects show the importance of networking in rural, less developed areas and make connections how improving networks can improve the livelihoods of people involved.

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OCIAL

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HANGING THE

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OSITION

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OMEN

“Social Development promotes inclusion, cohesion, resilience, citizen security and accountability as the operational principles that define socially sustainable development. […] Social Development includes the poor and excluded in the development process and translates the complex relationships between societies, states and communities into operations.” (The World Bank, 2015). For economic development to be sustainable, the development should also diminish social inequalities and constraints in the communities. The relative position of women compared to men and their power in for example decision taking in households, can be an indicator of social change within a community. Social capital influences the self-perception of women, which can be both: positive (encouraging) and negative (intimidating). Knowing important persons can give the women a more important position in an existing network (Rankin, 2002). Therefore the different dimensions of social capital can lead to a change of the position of women and this can contribute to the communities they live in, improving the quality of life and advancing social development.

example if women are excluded from political party meetings. Living in a community in which women are not allowed to some reunions or meetings would be a strong restriction for accumulating social capital, and would push women to the outside of the social network.

Thieme & Siegmann (2010) argue that the bridging social capital that comes from the extra-household networks of women can potentially lead to collective action and to resistance against masculine domination. Therefore the position of women can be supported because of the association with like-minded women outside their bonding network of their kinship. This does not mean that all Indonesian women are suppressed by their family or dominant husband, solely it should emphasize considering social habbits for improving equality. A study by Kim & Sherraden (2014) about the impact of gender and social networks on Microenterprise Business Performance showed that women’s social networks are more likely to consists of kin and female neighbors (bonding capital) and that “male entrepreneurs put more effort into both social and professional clubs and societies, and that women spend less time developing new contacts and have less frequent contacts with their network members than do men” (Kim & Sherraden, 2014, p. 53). This means that male entrepreneurs have more diversified networks on which they can rely for support and potentially more and different sources for information which are no accessable for women.

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N D O N E S I A N

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O N T E X T A N D

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U L T U R E

Indonesia is a diverse country and the society consists of various ethnic groups (Javanese 40%, Sundanese 16%, Malay 4%, Batak 4%, Madurese 3%, Betawi 3%, Minangkabau 3%, Balinese 2%, Chinese 1%, … other 15% (Central Intelligence Agency, 2015)). Therefore it is difficult to speak of one Indonesian culture, generalizing on different groups and religions is problematic. But the term ‘Gotong Royong’ is considered to be identically understood and even unifying the country. Itwill therefore be explained as unique aspect of the social life in Indonesia. Besides considering that 87.2 % of the population are Muslims and that Indonesia is considered as the biggest Islamic country on the world (Central Intelligence Agency, 2015), this particular aspect should be considered focusing on what that religion means to female people. Besides there are many women working in the “black market”, and particular many female entrepreneurs do not make their business official for reasons connected to the Islamic religion and traditions assuming that the female workplace is the household.

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OTONG

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that various provinces have in common. Its cultural tradition ranges over many domains of social life (Bowen, 1986). It is rooted in the day-to-day life. Studies have shown that it encourages communities to involve in disaster recovery programs which can help them to build capacities that the government is lacking to overcome natural disasters, like the earthquake in Yogyakarta in 2006. Women also participated actively in the mentioned disaster recovery programs providing free food for people working on rebuilding houses, which made them even more important than the material and voluntary labor (Kusumasari & Alam, 2012). This form of social capital is based on bonding ties within a network, but the atmosphere created by a natural disaster allows makes communities connect with other networks. Since the affected people share pain, loss and disruption, Gotong Royong leads to collective cooperation that temporarily bridges between different ethnic groups in order to meet the urgent needs and to begin with the reconstruction of the area In this way it contributes to the social development.

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SLAMIC RELIGION

This section will focus on the Islamic religion and its context in Indonesia. First, the majority of Indonesian Women are considered to be Muslims and second because the Islamic ideology has been rising in the Indonesian political context which has made politics become less sensitive to gender (Candraningrum, 2015).

This order was followed by a democratic movement (“Reformasi” politics) which according to the opinion of Suryakusuma (2012) has become a predominantly Islamic social construction. The “Reformasi” politics allowed for stronger influence of religion on politics. An Islamic centered law might be appropriate for pure Muslim countries, but as mentioned Indonesia is a very diverse country with regions that can be predominantly Christian or Hindu. Considering the political environment, the conditions for women to participate actively have increased in the recent years. Some women emerged as local leaders leading to greater expectation for considering the specific female needs but Dewi (2015) points out that a significant factor that empowered those women were familial ties originating from male relatives (father, step-father, brothers) who also held powerful political and/or economical positions.

Many Indonesian Muslim women are becoming more pious and their agency is central to all aspects of Islamic life in Indonesia. For example older women have increased their piety because they believe that their concerns for social issues (e.g. corruption or rising crime rates) can be solved by strengthening the society through religious knowledge (Blackburn, 2011). A younger generation of women in Indonesia seek a modern form of Islam that supports their careers as professional women and they find spiritual and practical advice in Islamic magazines. Moderate interpretation of the Islamic religion points out that a harmony can be achieved between the religion, democracy and gender equality for which Indonesia is considered to be pioneering and unique compared to other Islamic countries. There are feminists within the Islamic organizations who struggle to link religion to women’s rights but also very conservative groups who are responsible for the reinforcement of male domination in religion. For example the Indonesia Marriage Law regards only men as heads of households. Traditionally Indonesian women have always contributed to their families but their contribution both inside and outside the home is or was often ignored (Tambunan, 2011).

(Srimulyani, 2011). These examples show that the effects of Islamic religion can also affect people, who follow a different religion, their networks and how they socialize in Indonesia.

A survey of 180 women entrepreneurs in Bahrein (an Islamic country) showed the influence of Islam on female entrepreneurship. The authors point out that the conservative Islamic cultures can constrain female mobility and a woman’s ability to interact with people outside the home. The survey confirmed that women to be successful entrepreneurs, women need the support of their family as non-traditional sources of financing and for instructions in decisions (McIntosh & Islam, 2010). Grine et al. (2015) showed in a small scale empirical study in Malaysia that religious rituals helped Muslim women entrepreneurs to succeed in decision-making and overall entrepreneurship. Besides their spirituality made them prioritize the needs of their family as the Islam command them to take care for their family, their employees and the wider community, which made their business more social responsible (Grine, et al., 2015).

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ARTICIPATION OF

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OMEN IN THE

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NFORMAL

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CONOMY

The men maintain their position as the main bread earners for their family. Although the female participation in the economy is rising. But since many of the women are active in the informal activities their employment is unstable und not registered (Forshee, 2006). This includes many activities in farming and all household activities for which the woman is seen as responsible. “While men maintain a public image, women produce social reality within or between households” (Forshee, 2006, p. 165) Indonesian women enjoy less freedom in movements than men. Since they devote most of their attention to their families, their primary social connections are kinship or neighbors in their community. Following a survey by Babitt, Brown and Mazaheri (2015) conducted in different regions in Indonesia, female entrepreneurs preferred to formalize their business when they were married and have just started their firms. The authors pointed out various factors that influence the decision to engage in the informal sector instead of registering their business, such as:

 the proximity to the families home and

 the advantage of evading regulation and taxation.

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E T H O D O L O G Y

This section will first explain the research philosophy which is based on the theory that is considered. The ontological perspective of subjectivism and the epistemology of interpretivism then suggest a qualitative methodology and a data selection process with a small sample size identified by a snowball-sampling in different regions of Indonesia. These participants than voluntarily took part in a semi-structured interview dealing with different aspects of social capital, entrepreneurship and the position of women in Indonesia. The data analysis is subsequently also qualitative and a short overview of the identified labels, and their connections is given. Besides this section will also explain how this research followed the ESRC framework and how decision taken in the process lead to limitation for the research.

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ETHODOLOGY

methodology used such as a small sample and to evaluate the collected data in detail to understand the views of many people (Kasi, 2009).

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ATA COLLECTION

The unit of analysis were Indonesian women and their networks in the communities. This lead to data collection on an individual level, which then was interpreted to a more general community level. Of cause an interpretation is prone to misunderstandings especially if dealing with different cultures. But the assessment of social capital has to be done on an individual level for qualitative research. Data was collected from local women and experts involved in community development. The collection of data was done through semi-structured interviews. The advantages of semi-structured interviews are that a dialogue can develop new knowledge. The interviewer can direct the conversation to issues that are relevant to the research. The guide still allows leeway for following up on what seems important to the interviewees or connected to the research in their opinion (Hennink, et al., 2011). Furthermore the aim of this research was to focus on details and to provide accurate descriptions of the way people in a particular culture live, and to gain deeper understanding of Indonesian women in their natural setting for which in-depth interviews are common and appropriate (Rubin & Babbie, 2010).

There were two main participant groups in this research. First, experts (count: 7) in the field were interviewed, who were staff from local universities or working in official administration. They had contact to various local women through their work activities which involved projects in small communities on enhancing agricultural activates or supporting alternative income sources such as tourism. All of them were native Indonesian, achieved higher education (university degrees) but not all were female. Those experts provided an etic perspective on women in the communities and in the findings they are referred to as Participants A#.

resulted in a snowball sampling. This nonprobability sampling is appropriate when targeted participants are difficult to locate. Individuals, on whom data is first collected, are asked to provide information to locate further participants for the research with whom they have contact. This leads to accumulation of subjects suggested by other subjects to which the term ‘snowball’ refers. The disadvantage of this sampling method is that is has a questionable representativeness but it is a “commonly used technique in qualitative research, and in research on minority and opposed populations it is often necessary.” (Rubin & Babbie, 2010, p. 149). Another weakness is that the participants are likely to be from the same social network. But since this study investigates social networks, this can be seen as a positive site effect and Hennink, Hutter, & Bailey (2011) note that in order to tap into several different social, it is beneficial to have several starting points for snowball recruitment networks, which are given by experts from different regions. Furthermore, this method has the advantage that concerns of potential participants can be alleviated by a trusted person who can describe the interview process and potentially increase the participation.

The interviews were conducted in the following four different cities or their suburbs: I. Medan in Sumatra Utara (North Sumatra),

II. Jakarta (Capital City)

III. Bandung in Jawa Barat (West Java) IV. Surabaya in Jawa Timur (East Java)

which made comparing interviews more difficult and demanded for the cutting method in analyzing. The interviews took between 30 to 75 Minutes and were mainly conducted in English. Since some of the women only knew little or no English, a local person assisted in translation when needed. Taking into consideration that Indonesia is a multilingual country with various dialects, translation could only be done by someone local to the place. The interviews were conducted with the help of an interview guide (Appendix I) which covers questions and sub-question on the following 6 topics:

1 General Information,

2 Information and communication, 3 Entrepreneurial Activities, 4 Social Capital,

5 Position of Women, 6 Changes over Time.

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ATA

A

NALYSIS

The analysis of the transcribed interviews followed the common guidelines of textual data analysis as suggested by Hennink, Hutter & Bailey (2001, Chapter 10). In order to identify themes, first one interview at a time was investigated for codes, which then led to emerging of themes (labels) when taking the codes from various interviews into considerations. The coding and labelling of interviews was partly realized before all interviews were accomplished. New themes that emerged, but had not been considered before due to the lack literature on the specific topic, were then integrated in subsequent interviews. For example the Indonesian term ‘Gotong Royong’ (as explained in the literature review) was mentioned explicitly or indirectly in various initial interviews, which then lead to a specific questions in the later interviews. This process originated from the analytical and practical necessity to compare and contrast segments of data from different interviews while maintaining the integrity of each interview. After completing a sufficient number of interview the codes were then searched by topic and subgroups. The processing technique of cutting and sorting helped piling themes together since the semi-structured interviews allowed participants to answer more freely, leading to themes appearing at different instants (Ryan & Bernard, 2003)(See Appendix II for labels of themes and quotations).

Figure 4.1: Topics and labels as results from the analysis Source: Own Illustration Comparison of interviews was done in cross-participants, especially the data from women was analyzing by comparing deductive subgroups to investigate possible differences due to regional or socio-demographic characteristics. Interviews were also compared considering differences between the data retrieved from experts and women, since the codes of these two typologies yielded similar as well as contrasting patterns. The conceptualization of the codes and their labels allowed to get a wider understanding of relationships between various categories (Hennink, Hutter, & Bailey, 2011). The quotations that appear in the section below were selected because they help to provide a rich description and explanation, one of the advantages of using qualitative methods. The theoretical underpinnings show a clear separation between the ideas of social capital in general, local economic development and social development. But as Figure 4.1 also suggests that in reality and in the field work those concepts cannot be cut apart and “investigated” separately since they are dependent or even interdependent on each other.

Information

Female entrepreneurs Networking

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THICAL

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ONSIDERATION

The ESRC framework for Research Ethics (Economic and Social Research Council, 2015) was followed in this research because it is dealing with very sensitive information of individual persons and the field work was conducted in country different than the origin of the researcher. First the interviews were voluntary so participants were not forced or pressured to take part. Second, in order to minimize potential harm to participants and researchers the questions were carefully selected to not violate the privacy of the participants. Only small samples were conducted in selected regions so that not many persons of the same networks would be involved.

Another principle of ethical research following the ESRC framework is that participants were given appropriate information about the purpose, methods and intended use of the research in the Project Information Sheet (Appendix III). This included general information about the project and its purpose, informing participants that participation is voluntary, data will be treated confidential, that they will remain fully anonymous and that they are allowed to skip questions without giving a reason (Thomas, 2004). Before asking for consent, participants were asked whether they had any questions or wished to contact the universities for further information. Experts were asked for written consent (Appendix IV) since they received higher education. For local women it was decided to aim for oral consent because written consent was considered as inappropriate by some people in Indonesia for political/historical reasons.1 After conducting the interview, the participants were debriefed verbally to prevent confusion or irritations after taking part in the study (Hennink, et al., 2011) (Appendix V).

This research was reviewed and approved by the ethical committee prior to any field work to assure transparency and to ensure recognized standards of integrity are met. Last but not least, the research was independent and there were no conflicts of interest from the side of the researcher or any party involved.

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IMITATIONS

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In order to demonstrate that the results of the interviews are consistent with comparable research this chapter starts with the cross confirmation with similar data which also gives important characteristics about the participants. The next sections explains how Indonesian women are perceived in their culture and that Information is shared openly which is supported by their culture of ‘Gotong Royong’. The engagement in entrepreneurial activities is supported by participating in group activities and the group member have increased opportunities to build their bridging and also linking social capital. The interviews also showed that there is little contact to persons of higher status, so linking social capital is missing and personal contact is important for establishing trusting relationships.

For changing the position of women it is important to consider that the close family ties are a precondition for engaging in entrepreneurship and a ‘double burden’ of being a housewife and working at the same time is becoming more common. Since this change is still ongoing and slow the options of setting up a business or increasing their networks with the help of the internet should be discussed since it also takes account of the possible restrictions by the Islamic religion and why women tend to avoid registering their business.

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The answers from the interviews reconfirm the results of Tambunan’s research (2011) which shows the following three important points which were all confirmed by the data of the interviews.

 First female entrepreneurs rely on money from relatives (bonding social capital) rather than formal lenders (linking social capital).

 Second the traditional, customary, cultural or religious expectations limit opportunities for women’s entrepreneurship.

in accordance with the data form the Indonesian National Agency of statistics (Tambunan, 2011).

A survey that intended to identify social economic challenges facing women business owners in Indonesia surveyed 102 Indonesian female entrepreneurs and their identified patterns are similar to the ones identified in this research. As a source of inspiration for business 77 % of respondents indicated other family members or friends and that in most cases someone else (father, brother or husband) in the family was already an entrepreneur, which was also stated by participants in this research. Hani, Rachmani, Setyaningsih & Putri (2012) point out that in Indonesia the family is traditionally the primary emotional and financial support which encourages women to “perceive themselves as dynamic enough to balance family and professional careers better than in corresponding western societies”. (Hani, et al., 2012, p. 284). Holding and even enjoying this balance between family responsibilities and entrepreneurial activities was confirmed by the participants showing strong bonding social capital. Considering the benefits for the community Participant A5 said that “There is a sense of giving back to the community from most people in the entrepreneurial women group.” Although the religion of the members in this particular group to which Participant A5 refers was not assessed, the quote still shows a general sense of Indonesian women whose Islamic spirituality (if they are Muslims) requests them to take care of their employees and the wider community cohering the results of a study in Malaysia (Grine, et al., 2015).

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NFORMATION AND

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OTIVATION

“One of the main problems is that it is in the minds that women can rely on husband, which makes them unconfident” Participant A5. This statement summarizes the issue about the self-perception of Indonesian women: they do not lack education or information but they miss confidence in their abilities. Other participants state that they saw themselves as equals to men, but it has to be considered as being active entrepreneurs they are probably more self-confident that their peers (Nawangpalupi, et al., 2015). The GEM data (2014) also shows that women and male early-stage entrepreneurs have similar levels of fear of failure.

The theory already suggested, the Indonesian culture is fundamentally based on helping each other without expecting an advantage for oneself. Participant B6 “In Indonesia, we are really team based” or Participant B7 “We help to help each other, to help our community”. Many participants also mentioned Gotong Royong as a part of the “culture of helping” (Participant A2) and “about working together” (Participant A6) towards a common goal. The perception of Gotong Royong as general wisdom might be connected as only present in villages (e.g. Participant B2 “villages people help each other”) but as it is deeply rooted in the culture, the general idea of “mutual cooperation and social gathering” can be seen as a central part of Indonesian specific social capital. What characterizes Gotong Royong is that differences in status or hierarchy do not matter for helping each other, which means that it applies to bonding, bridging and linking social capital. So if a group can develop a community sense, the input that each member has in aspects as for example knowledge, skills, resources, does not matter for what they can get out as benefits from the membership. Said in simple words: Gotong Royong is about giving without receiving or expectation to receive.

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double burden (Forshee, 2006). This multitasking role can only be accomplished with the full support of her family, for example with parents taking care of the children while the woman is working. For founding an enterprise the women rely on close relatives. Not only do they trust advice from family members more but especially financial support is provided by the family.

The bridging capital of Indonesian women is less active in the founding phase of becoming an entrepreneur. An Indonesian woman would only ask a person for advice or help if she feels a close connection to that person of expertise. Knowing other persons that have already started their business can be helpful to rely on their expertise, but again, for having enough trust to be able to use that capital it is more common that those people also belong to their bonding capital (family members) than that they come from different income groups or religions.

The Indonesian government initiated small group with the purpose that people that work in similar fields can meet and share information, for example StartupBandung, or sorghum agriculture group in Surabaya, Barrista group, etc. People join those groups and weekly / monthly meetings once they have set up their business. Groups in which people with similar entrepreneurial activities meet had for most members the advantage of sharing information, and the experience of others, as for example Participants B4 formulated it: “The question that everyone has on his mind is: what is the best thing to do if we have the business, and what is the best thing not to do.” One might reckon that this could lead to jealousy or even competitive thoughts about giving away valuable information but the members rather saw it as mutual giving and the group also helped them to avoid competition which confirms high levels of trust and respect within the groups and worthy bridging capital (Szreter & Woolcock, 2003).

benefits between the universities teaching important skills to local women and in return the group activities, would support them in their research activities as Canzanelli (2001) suggested that joint strategies have to be established to achieve sustainable development. Meeting other women that are active and have similar task in combing work and household can be reassuring and can increase the confidence of women as also suggested by Thieme & Siegmann (2010) of the importance of extra-household networks to fight male domination as it is explained further below. Summarizing, the engagement in entrepreneurial activates has various effects (see Figure 5.1):

 Bonding social capital is reassured, bridging and possibly linking social capital can be built up easier if they join groups related to their business activities  The engagement gives the woman confidence to improve her position as being

more valued by the family and more present within the community network  The peaceful exchange of information in groups that show high levels of ethnic

or religious diversity can be considered as contribution to social development  The local economic development is advancing if the women run successful

business (as all participants confirmed they did)

Figure 5.1: Excerpt of Model of Findings (Source: Own Illustration)

The various effects of engaging in entrepreneurial activities also show that the topics that were identified from the data of the interviews (see Figure 4.1) influence all different dimensions of social capital. In order to consider their connections the same topic can account for influences on the social as well as economic level.

Getting advice specifically on how to open a business was difficult because most participants answered they would ask people in their community, most times bonding social capital. Contact to lawyers or persons familiar with the law is uncommon for female Indonesian entrepreneurs, and Participant A2 points out that this is even more difficult for people from villages. As Participant A6 mentioned in the interview, there are many programs from the government that support especially women in their entrepreneurial activities (for example refunding costs of visiting exhibitions), but information about those support opportunities do not reach the women, which implies linking social capital.

The following table summarizes the points made in this subchapter:

Social Capital Bonding Bridging Linking

Influence for becoming an entrepreneur

Source of financial capital, knowledge and emotional support Inspiration and sometimes knowledge Not existent Influence for being an entrepreneurs

Support and reassurance of business activities

Knowledge exchange, extending to more diversified networks

Can be built with the help of groups

Economic effect

Higher family income to spent

Advices and support from group can increase profits

Programs do not reach women

Table 5.1: Influences of different ties (Economic Perspective)

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OSITION

The emic perspective can be shown by the quote of Participant B8 “Women are always multitasking. The family also supports many of my activities.” The epic perspective as Participant A7 says “Time has to be managed, because women have various task”. The traditional role is taken for granted by the female entrepreneurs and the priority for family can lead to restrictions for work. This reconfirms how family duties can lead to engagement in the informal sector and the importance of considering the different needs of female entrepreneurs in the policies (Babbitt, et al., 2015). The priority is to be a dedicated mother and wife, and taking up work beside their primary role made them feel more dedicated as a family member since they were able to contribute to the composed income (Bachelet, 2012). So the bonding capital as a precondition for entrepreneurship is also a precondition for changing their position and being more central in the community has to go along with being respected and valued by the own family.

As suggested by Grootaert et al. (2004) networks should be diverse in the kind of ties they have to lead to higher levels of support when setting up a business. Therefore the members of the networks need to possess high levels of tolerance concerning the acceptance of differences between each other. The interviews showed that Indonesian people develop a feeling of one community despite differences and “once you built up contact it doesn’t matter anymore” (Participant B6). The groups are united by the same interest, and conflicts rarely ever show in those groups, which leads to high bridging potential between different ethnic groups and religions.2 The general tolerance and acceptance of differences makes the Indonesian culture very unique and it means that potentially networks can have many different kind of ties without eroding. On top of that a higher exchange between different ethnic groups without conflicts contributes to the social development of the community.

Inspirational persons for women are rarely found among high position in companies or the politics of Indonesia. The interviews suggested that Indonesian women from the past are still role models, for example Ibu Kartini3. There are two issues related to the linking capital of women that limit women in using linking capital as mentioned above which

2

As a side note a comment from Participant B5 should be mentioned: “But at some activities I cannot join, for example they have their weekly Muslim prayer which they do together” (She was a Christian in a group for entrepreneurs for Muslim fashion)

also affect their position. First there is little trust in and towards the government of Indonesia and second most times contact between officials and local women is missing. This matches with the theories of Bourdieu (1977) that in order to become aware of a domination, there has to be an outside inspiration for challenging the taken-for-granted values, which could be achieved by finding inspiration in linking capital as elected leaders but that kind of inspiration for social development is missing for Indonesian women.

The following table summarizes the points made in this subchapter:

Social Capital Bonding Bridging Linking

Influence to changes in the position

Source of emotional support and confidence

Inspiration and

emotional reassurance

Can lift women up and facilitate the change of the position

Social effects Higher tolerance towards changes in the society

Diversified networks support social

development

Increase equality

Table 5.2: Influences of different ties (Social Perspective)

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For social capital the place of socializing is important because in public places it is more possible to meet someone unknown or little known. As stated by various participants, Indonesian women rather socialize by visiting the houses of family members (Thieme & Siegmann, 2010). Participant A7 who also owns a business points out that she meets “family always at home, for friends and especially business contacts I prefer public places because it is more professional”. This shows that women who set up business activities might also have to consider different place to meet contacts if they start building up relationships outside their bonding capital.

reconfirms the critics that the government has to actively work on improving the personal contact (Candraningrum, 2015). Traditionally Indonesian women rely on their family members as first source of information and resources, which are ties that are naturally given, so do not need to be built and only little efforts to be maintained. In a way women are not accustomed to building relationship with people outside their bonding capital. The government and universities have to be aware of the fact that Indonesian women tend to be a bit “lazy” when it comes to building up their networks as well as that women have to realize that building social capital (especially bridging and linking) has to be considered as part of their work as entrepreneurs.

Some women said that they would traditionally (and in a conservative Islamic marriage) have to ask their husband for permission if they want to socialize with other people. This means that the decision power of the husbands can also influence the ability of wives to build social capital. In Islamic tradition they are dependent on the husband to be introduced to strangers (Hasan & Fatima, 2012). This shows an interesting reverse influence of how an increase in income thanks to entrepreneurial activities can lead to increases in decision power, which then allow the woman to build further reaching networks, especially outside of bonding ties. This means that some women first must have an income that changes their position and then they have the “power” to build bridging and linking ties on their own. Since these changes are on the individual level, the data of the interview do not allow making generalization on the community level, so interrelations between social development and economic development were not investigated even though they might be present.

Instagram), which allowed her to address family and friends in the first place and then spread to wider circles of connections while requiring little financial input.

Another study concerning social media and female entrepreneurship was conducted in Pakistan by Hasan & Fatima (2012). They point out that social media can be a significant marketing tool in reaching a wider circle of local customer due to higher cost efficiencies and networking opportunities. Besides, since the Islamic culture denies some women to leave their homes, the internet offers the opportunity to operate a business while being at home (Hasan & Fatima, 2012). This idea was also suggested by Participant A6: “The internet is a good option and also combine work with household tasks is easier”.

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INDINGS

Given the considerations of the position of Indonesian women at the moment of research, the findings show the following model for the contributions of social capital to local economic and social development:

Research had not considered linking capital in a developing context at the moment of investigation and this research showed it was often missing. The bonding social capital turned out to be a precondition which is a distinctive finding and might be due to the specific Indonesian context. Bridging social capital was found to be supportive. All kinds of ties influence engagement in entrepreneurial activates, which increase the local economic development in the community. The business activities of women also tend to increase the social capital (a bi-directional relation) and improve their position as well as contributing to social development. The social capital influences the position of a woman, and by building up social capital her position will become more central in the community and more valued by the family. On the community level a higher number of women being present in the network mean also higher equality between women and men and an increasing social development. As mentioned in the introduction, this research aims to also add to the existing literature on local development. It can be pointed out that women face different struggles in setting up the business, such as the multitask role they have to fulfill which does not apply to men in the same context.

Figure 5.3: Suggested integration of findings in the Multi-level, multi-actor model for local economic development, Source: Pennink, 2014, modified,

http://bjwpennink.wix.com/ledmodel#!model/cjg9 Retrieved: 18.12.2015 Social

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Michelle Bachelet: “It is time to unleash the full potential of women and girls.” (2012, p. 1)

This concluding chapter will first summarize the previous chapters and again point out how the research questions were answered. Furthermore it will give various suggestions how Michelle Bachelet’s demand of unleashing the full potential of women can be fulfilled in the aspects of engaging in entrepreneurial activities and in changing their position by the influences of social capital. Last but not least, directions for future research are proposed that give account to the constraints that this research had.

coding, labeling, cutting and sorting as well as framing. The following illustration as already shown above summarizes what this research has found out.

Figure 6.1: Model of Findings (Source: Own Illustration)

Considering the engagement in entrepreneurial activates on an individual level the bonding social capital was a precondition for women to engage because they depend on the support of their families for any activities. This contrasts from previous research as for example by Thieme & Siegmann (2010). Bridging social capital is supporting the activities of women by giving them information and confidence. Engaging in group activities related to the entrepreneurial activities will increase their contact to persons who are needed resources of information. Linking capital is missing for most women in Indonesia. There are programs available that support female entrepreneurs (Azali, 2015) but this information is rarely given to the persons who could profit most of it. Since this qualitative research showed that there is only little contact between female entrepreneurs and persons of higher and influential positions there are only indication that can be made about whether linking capital is beneficial. Women that did prove to have wider networks including persons of higher positions showed that they can receive valuable

information and advices from them once they have enough trust and courage to ask for advice.

On a community level it showed that if women engage in entrepreneurial activities it is highly likely that they thrive to support their closer network (family) and also to “give back” to the community. This improvement in economic development goes along with advances in the position of Indonesian women in the society and also social development. Their bonding ties value their work with recognition and a woman combining family obligation and work is perceived as very honorable and respectable which gives her self-confidence. The bonding capital is a precondition that a women needs for making advances in changing her position, the family gives her “rear cover”. Bridging capital proved supportive for changes in her position. Meeting women who similarly multi-task family and work reconfirms female entrepreneurs in her family role and can increase her presence outside of homes. Again linking capital is mainly missing to be evaluated but supportive bridging and bonding capital change the position of women in the society and it improves the quality of life. Women do not only help themselves by making use of their social capital but through building more social capital especially through increasing their networks as part of their entrepreneurial activities. They also contribute to the development of their community.

As the Figure 6.1 demonstrates, the three different kinds of ties have different characteristics in how they influence the women: Bonding social capital is conditioning and affirming, bridging social capital is supporting and linking social capital is missing. But they all affect economic and social development, which also explains why most topics and themes retrieved from the interviews were connected to various kinds of ties and effects of social capital.

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