Scholarly article on topic 'Bandung as Service City in Indonesia: Role of Academician, Business, and Community'

Bandung as Service City in Indonesia: Role of Academician, Business, and Community Academic research paper on "Economics and business"

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Abstract of research paper on Economics and business, author of scientific article — Achmad Ghazali, Lenny Martini

Abstract Bandung, the capital city of West Java, province in Indonesia, the country's third largest city, has the vision to be a service city that cleans, prosperous, obedient and friendly. Using the triple helix framework built by Etzkowitz and Leydesdoff (2000), this research aims to elaborate the role of academician, business, and government in Bandung to support the local government to reach its vision as service city in Indonesia. The paper investigated the nature, relative scale, and contribution of each party in accordance with vision, mission and strategic goals of Bandung. It also explored the capabilities required by the society to derive value from the collaboration of each party. Analysis of all data both primary and secondary will result in a form of conceptual model and will be discussed in this study. The empirical result will become a useful model foundation for the government of Bandung, also for the central government of Indonesia.

Academic research paper on topic "Bandung as Service City in Indonesia: Role of Academician, Business, and Community"

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Procedía - Social and Behavioral Sciences 52 (2012) 317 - 324

10th Triple Helix Conference 2012

Bandung as Service City in Indonesia: Role of Academician,

Business, and Community

Achmad Ghazalia*, Lenny Martinia

aSchool of Business and Management, Institut Teknologi Bandung, Jl.. Ganesha No 10, Bandung 40132, Indonesia

Abstract

Bandung, the capital city of West Java, province in Indonesia, the country's third largest city, has the vision to be a service city that cleans, prosperous, obedient and friendly. Using the triple helix framework built by Etzkowitz and Leydesdoff (2000), this research aims to elaborate the role of academician, business, and government in Bandung to support the local government to reach its vision as service city in Indonesia. The paper investigated the nature, relative scale, and contribution of each party in accordance with vision, mission and strategic goals of Bandung. It also explored the capabilities required by the society to derive value from the collaboration of each party. Analysis of all data both primary and secondary will result in a form of conceptual model and will be discussed in this study. The empirical result will become a useful model foundation for the government of Bandung, also for the central government of Indonesia.

© 2012 The Authors. Published by Elsevier B.V. Selection and/or peer-reviewunder responsibility of Institut Teknologi Bandung Keywords: Service city; Triple-Helix; Quadro Helix;Bandung-Indonesia

1. Introduction

The growing notion of service based-economy compares with resource based-economy has triggered countries to develop concept of service cities, especially for those whose areas do not have strategic natural resources such as oil, gas, mineral and forest. Toronto, Canada, has been one successful city, which adapts this concept to develop its local economy (Robertson & Ball, 2002; Todd, n.a.). In Indonesia, the concept of developing service cities also implemented in several cities, including Jakarta, Bandung, Pekanbaru, Medan, and Magelang—as the

* Corresponding author. Tel.: +62 22 2531923; fax: +62 22 510314. E-mail address: achmadghazali@sbm-itb.ac.id

1877-0428 © 2012 The Authors. Published by Elsevier B.V. Selection and/or peer-review under responsibility of Institut Teknologi Bandung doi: 10.1016/j.sbspro.2012.09.469

city that full of potential (Evers, 2012). Local government of Bandung also decided to put the vision to be service city and develop mission and strategic plans to achieve the vision (Soemardi & Radjawali, 2004).

Borrowing the triple helix concept (Etzkowitz, 2003; Etzkowitz & Leydesdorff, 2000; Leydesdorff & Etzkowitz, 1996, 1998), collaboration among academia, business and government that has been the key of successful implementation of knowledge based-economy, this paper aim (i) to mapping the role of each party and (ii) to make awareness of their roles, so then each party may take action in accelerating Bandung as service city.

2. Background

2.1. Service Based Economies

Service management and strategies have developed in response to the tremendous growth of service industries, resulting their increased importance to the economies (Zeithaml, Bitner, & Gremler, 2008). Service based economy represents how countries developed their income through service industries, which are not much exploit natural resources, contribute on knowledge and innovation, and focus on how to deliver the added value to the customer. The Gross Domestic Product (GDP) attributed to services is increasing worldwide, as seen in Table 1.

Table 1 Percent of GDP Attributed to Services (CIA., 2012)

Country Percent of GDP Attributed to Services

Indonesia 38.1

Thailand 52.7

Singapore 73.4

Malaysia 48

South Korea 58.2

China 43.1

Japan 71.6

United States 79.6

United Kingdom 77.8

Australia 75

New Zealand 70.7

As we can see from the table above, all developed countries—Japan, United States, United Kingdom, Australia, New Zealand, and Singapore-has high percentage of GDP that attributed to services. For Indonesia itself, we are still left behind in endorsing service sector to generate GDP, this situation confirmed how the emerging country like Indonesia still exploiting their resources instead focus more on knowledge, innovation, or service based economy (Guillen, 2000). Besides of GDP, the growing number of service industry also contributed in the number of people that working in those areas. It means, besides the economic growth, the government needs to formulate their policy to accommodate that workforce-in terms of policy, politic, social, and education-to become the (human) capital of the nation. The policy and political will from government may create conducive environment for the growth of service industry. The social aspect of service industry is to prevent social gap between the richer and the poor. And the education process is required to create the workforce- with competence, knowledge, and skill-and then become added value in the business.

The role of Business and Academic is also important in creating service industry. Business as the player in industry has to apply the concept of service (customer focus, efficiency, and innovation) in their daily basis

(Kandampully, 2002). And the academic should support government and business by providing the education for the future service industry workforce and also the research that use in formulating the strategy and policy in service industry (Chesbrough & Spohrer, 2006).

2.2. Service City Mix

The concept of service city mix actually derives from the concept of creative city. The term of creative and service sector in Indonesia is usually interchangeable. However, in this paper we use term service, which is more relevant with the vision of Bandung as service city. Several publications have mention about service city mix, as the element of service that provided by the city to satisfy the customer or people who come to the city (Clarke, 2005; Eichhorn, Buhalis, & Darcy, 2010; Wu, 2005). In general, there are three elements in service city mix, which are amenities, attraction, and ancillary. We developed the survey questionnaire based on those three elements.

Amenities or the facility of service are view as the infrastructure that required for supporting people activities in that city. For example, the infrastructure for public places in the city is public transportation. Public transportation is necessary to help people to visit those public places. In more detail about public transportation, the service quality that being concern are on time schedule, number of transportation that available, the variation of public transportation, safety, clean, and affordable price of public transportation. The other example of amenities is information center. People need information center that provides complete information about the city and strategic places in the city. That information may help them to schedule and prepare their activities in the city.

The infrastructure and information center may be useful, if the city offer so many attractions or events that interest the visitors. Well plan (schedule) of events and attraction will attract the people to come to the city. For example, if prospected visitor knows about those schedules of attractions and events in year 2012, they could make early preparation for their visit. Singapore Great Sale is one example of Singapore city positioning to attract the visitor for coming to Singapore every mid year.

Ancillary service (supporting/additional service) is the reflection of service city that able to provide the solution for their visitor. The characteristic of service city with full ancillary service by provides accurate information regarding number of events that happened in that city. Singapore is not only attract the company, institution, and government to promote their products in this city, but also the provide all relevant information that may help the company or other institution to understand the situation of Singapore and then come to Singapore for investing-or for future investor, those information may help them for their decision to come to Singapore.

The critical point that we could learn from the concept of service city is every city that already has infrastructure and system of service still need positioning strategy. Positioning strategy create the city with specialty and uniqueness that may attract their visitors.

2.3. Triple Helix Framework

Triple Helix model (Etzkowitz & Leydesdorff, 2000), introduced 3 (three) dimension of social system, which is Geography, Economy and Knowledge. The primary actor who responsible for the geography dimension is government who rule the area, while for knowledge dimension is academician who create and share knowledge within the area, and actor who responsible for economy dimension are business entities who create economic activities within the area. The product of interaction between these dimensions will create Knowledge

Infrastructure, Political Economy, and Innovation, said to be the competitive advantage for the area. One of the examples of collaboration between those three dimensions in social system is knowledge hub.

Knowledge hub is the system in knowledge network that very highly connected, both internally and externally, with high capability of knowledge sharing, and resulted three function in the communities, which are to generate knowledge, to transfer knowledge to sites of application, and to transmit knowledge to other people (Evers, 2008). Tjakraatmadja, Martini, and Anggoro (2011) investigate the process of knowledge sharing in creative clothing industry in Bandung mention the implementation of knowledge hub. They used triple helix model in defining the knowledge hub in Bandung creative clothing industry (Table 2).

Table 2 Role of Academician, Business, and Government in Knowledge Hub (adopted from Tjakraatmadja, Martini, and Anggoro, 2011)

Function of Knowledge Hub

Triple Helix Model To generate knowledge To transfer knowledge to sites of application To Transmit knowledge to other people through education and training

Academician Role Knowledge creation through research. To define body of knowledge in service industry Become source of knowledge Become trainer and guru in service industry

Business Role Knowledge creation through business experience Receiver of knowledge, implement knowledge in business area, giving feedback to create new knowledge As training participant, giving feedback of training, and also the provider of funds (in term of being the training host)

Government Role Knowledge creation through the process of regulation system Making regulation about knowledge transfer, facilitator, and provider of funds Facilitator and provider of funds

3. Bandung

Bandung, the capital city of West Java province in Indonesia, the country's third largest city with population of 2.5 million in June 2011 and area of 167.45 km2 has the vision to be a service city that cleans, prosperous, obedient and friendly. The city also has six mission to be accomplished which are: 1) Developing qualified human resources that are religious, educated and healthy; 2) Developing fair, tough, healthy economy in order to increase incomes, create jobs and business opportunities; 3) Developing social and cultural city with high conscious and conscientious, which include increased society participation to increase employment, social welfare, family, youth, sport and gender equality; 4) Improving the city planning, which includes maintenance and improvement of infrastructure and facilities to match the dynamics of increased activities of the city by taking into account spatial and environmental carrying capacity of the city; 5) Improve the performance of city government in a professional, effective, efficient, accountable and transparent, which includes government officials and community empowerment; and 6) Developing the financial system of the city, including development financing system by the government, private and public.

In order to accomplish its vision and mission, the city government of Bandung develop strategic programs aligned with each mission statements. Strategic programs to develop qualified and religious human resources are education program in all levels, pre-school, middle, outside school education; science and technology development; Healthy Environment, Healthy Behavior and Community Empowerment; improved health services; Drug Control, Food, and Hazardous Materials; Religious Life Service Improvement; Religious Education Quality Improvement. Strategic programs to develop fair city economy are industry development and business development, fostering trade and business development, cooperative development and business development, small and medium enterprise development, increased city investment, development of tourism marketing, development of tourism products, agribusiness development.

Strategic programs to develop social and cultural city are increased understanding, appreciation, Security, and Religious Harmony Living, women's empowerment, citizen services, youth and sports development, local and cultural art development. Strategic programs to develop city planning are area development of Gedebage, infrastructure and facilities planning, city transportation planning, environment development and control, residential area planning, spatial and land planning, city government asset security and utilization. Strategic program to improve the performance of city government are city planning improvement, law improvement, city government infrastructures and facilities improvement, development of city government apparatus, organization and governance development, quality control improvement, excellent service program, politic participation improvement, inter-regional cooperation development, environment peace and order improvement. Strategic programs to develop the financial system of the city are financing system improvement, performance improvement of regionally owned enterprises, partnership development.

Other than conducting strategic programs to serve its 7.4 million resident, the city government of Bandung has also the obligation to serve its more than 4 million-a-year visitors (3,5% among them are international tourists) to achieve its vision as service city. Excellence services should be offered by the city in form of business service, infrastructure, education, public administration, personal and social services and trading services).

In business sectors, several big company placed their head office in Bandung like PT Telecommunication Indonesia, Tbk., PT Pos Indonesia, PT LEN (Lembaga Energi Nasional/ Energy National Agency) with research area: transportation, defense and control, renewable energy, navigation and telecommunication), PINDAD (Perusahaan Industri Angkatan Darat), manufacturing industry specializing in military and commercial products, PT Dirgantara Indonesia (formerly IPTN/Industri Pesawat Terbang Nusantara, National Aeroplane Industry). In science and technology sector, Bandung has several prominent research company like LIPI (Lembaga Ilmu Pengetahuan Indonesia/The Indonesian Institute of Science), BATAN (Badan Tenaga Nuklir Nasional/The National Nuclear Energy Agency). While in Finance and Banking industry, almost every bank that operates in Indonesia place its major branch in Bandung. Reasons for this placement is because Bandung is close to Jakarta, the capital city of Indonesia with a very good infrastructure access (2 hour via toll road).

Supporting this strategic location is the fact that Bandung has many travel transportation business that available to serve people who need to go to Jakarta or other city for almost 24 hours a day, including public bus that available to drive people from Bandung to international airport in Jakarta. In the view of transportation, Bandung could be seen as satellite city that connect the southern Java areas to Jakarta and international flight. For inside city transportation, the city government of Bandung has provide 66 routes of city public transportation that serve passenger all over Bandung for 24 hours, added with public bus with 2 routes. There are more than 1400 taxi from 11 different companies that also available to serve local and international passengers who want to travel in Bandung.

Within the formal education area, Bandung has 340 kindergartens, 871 elementary schools, 131 junior high schools, 67 senior high schools and 142 higher education institutions. Bandung has 3 prominent public university: Institut Teknologi Bandung (ITB), Universitas Padjadjaran and Universitas Pendidikan Indonesia (UPI) that attract students from all over Indonesia to study in Bandung.

In health sector, Bandung has 1 center hospital, 16 general hospital, 68 community health centers, and 306 pharmacists. Bandung also has complete sports facilities and sport club such as soccer fields, futsal, tennis court, athletic fields, badminton court, volley and basketball court, swimming and polo pool, squash court, table tennis facilities, golf fields, racecourse, softball fields, hockey fields, boxing ring, anggar facilities, archery facilities, bowling and billiard pool halls.

Tourism sectors, being the biggest contributor for Bandung regional income is growing higher every year. Bandung supported this sector in accordance to its vision of being a dignified service city. Bandung has 353 rooms of youth hostels, 3.492 rooms of star hotels, 2.810 rooms of non-star hotel, more than 400 restaurants, and many entertainments and tourism venues. The government had emphasized the improvement of MICE sector (Meeting, Incentive, Conference, Exhibition), also the revitalization of city tourism objects. In industrial sectors, Bandung has the advantage of supply of quality worker with competitive wages. Several industry that grew well in Bandung are: manufacture of leather clothing and food, raw materials of chemical industry, general craft industry, trading industry, metal and electronics industry, goods and service trading industry, textile industry, metal industry, chemical, pulp and paper industry, forestry and agro industry, other electronics industry.

4. The Survey

To understand the condition of Bandung as service city, we conducted a survey (n=46), and the detail of respondent explained in table 3.

Table 3 Detail of Respondent

Category Sub Category Percentage

Sex Male 51

Female 49

Age < 21 years old 18.4

21-30 years old 51

31-40 years old 26.5

>40 years old 4

Occupation Lecture and students 58.1

Government employee 9.3

Public employee 23.3

Entrepreneur 7

Housewife 2.4

Longest stay in Bandung < 5 years 57.1

5-10 years 10.4

11-20 years 29.2

21-30 years 22.9

> 30 years 10.4

As we can see from the table 3, the number of male and female respondent is quite similar. The majority of respondent is between 21 to 30 years old, and mostly their occupation is coming from academician (both lecture and students). However, the other occupation that represents the concept of triple helix also captured as respondent in this survey (Government employee and Public employee). And the majority of respondents are less than five years in term of staying in Bandung.

5. Survey Result

The results from the survey show several concerns regarding the readiness of Bandung to become an excellent service city. Here are some results from the survey:

• In term of supporting factor for realizing Bandung as service city, the majority of respondents choose the prospect of the market (52.5%) and access to the market & source for raw material (22.5%) as the supporting factor. In the other hand, government policy & law (33.3%) and tax retribution (15.4%) were still poor in Bandung. This results shows the business opportunity in Bandung is very promising, however the role of government, especially in term of policy and tax, is need to improve.

• The infrastructures in Bandung that appeal the respondent are heritage building (18.4%), City Park (15.8%), and station (both airport and train station are 10.5%). In the other hand, the road included its service (60.4%) and waste management (18.4%) is the worst infrastructure they felt in Bandung. This situation may be an opportunity for collaboration between academician and government to solve those problems.

• In transportation question, the respondents felt Bandung has good service for intercity transportation like train and airport (32.4%) and also the gas station is spreading across the city (16.2). The one that they concerned is about the transportation inside the city (62.2%) and the parking that available at CBD (32.4%). Those two problems actually have been the issue from the eighties, and to solve this problem, the collaboration between local business transportation and government is required.

• The respondent felt positive toward the infrastructure for Internet in Bandung (22.9%), but they still felt lack of public telephone in Bandung (52.8%). Since the one that provided public telephone in Indonesia still dominated by government, therefore this problem is government homework to improve the access of public telephone in Bandung.

• The respondent survey regarding the worship place in Bandung is quite satisfy, the results show they felt the worship place in Bandung is very good (23.5%), good (35.3%), and sufficient (35.3%). Those number represent Bandung has provided their local and visitor good access to the place for worshiping.

• In relation with health services, respondents felt positive towards the availability of hospital (47.1%) and pharmacy (38.2%). However, the health insurance (51.5%)-in term of coverage, accessibility, and availability-still poor in Bandung.

• In academic services, the respondents shows high appreciation with the number of higher education (71.8%) that available in Bandung, this situation reflected Bandung as the option for students to continue their higher education. In the other side, the respondents felt Bandung still lack of public library (53.1%) and museum (31.3%), those situation may be an opportunity for collaboration between academician, business, and government.

• The tourism services are very good in Bandung in term of culinary services (72.7%), however the respondent felt Bandung is very lack of tourism information center (81.8%). Once again, this is an opportunity for collaboration between government, business, and academician.

• The retail services, Bandung is very strong in the availability of factory outlet (63.6%) but the respondent felt Bandung is very weak in providing art market (69.7%). Business may see 'developing art market' as an opportunity in Bandung.

6. Discussion

The results from the survey show a lot of great potential In Bandung as service city, however there are also several number of services in Bandung that need improvement. The concept of triple helix is appropriate in improving service facilities in Bandung. As we mention earlier, the collaboration between academician, business,

and government may be an opportunity to make high standard of service in Bandung. The knowledge hub may be a starting point of that collaboration, by provided knowledge and how to implement it to all stakeholders in service industry in Bandung. The academician may provide research, training, public lecture, and consultation project in certain areas that need improvement. The business may provide their business entities and their economic contribution to certain areas. And the government may provide specialize unit in those area (that need improvement) with certain strategic program and policies. Those contributions should be a result from collaboration between academician, business, and government. Thus, the improvement for certain areas in realizing Bandung as service city may be created as an integrated system and at the end the outcome become effective and efficient.

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