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How Investing in Social Enterprises in Indonesia Benefits Business and Society

26 August 2022

By

Lisen Wiren

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4 min read

Many corporations, large and small, are setting themselves ambitious goals to become more people and planet friendly. Investing in social enterprises that drive social and environmental solutions in local markets is a powerful way to achieve this. Especially when funding is coupled with knowledge-sharing and tailored business development, both corporates and social enterprises benefit, as a recently launched accelerator programme in Indonesia shows. How? We are happy to share some best practices.

Closely working with our local partner

The Indonesia accelerator programme is a co-created initiative by IKEA Social Entrepreneurship, the company within Inter IKEA that supports local enterprises with a people and planet mission around the globe, and our local partner, Instellar Indonesia. This purpose-driven company helps to build impactful, sustainable, and scalable businesses.

Indonesia is the largest economy in Southeast Asia, but the country’s strong economic growth has  had limited benefits to people living in rural and marginalised communities. They experience poverty, limited access to basic services and poor health, while waste and air pollution affect their daily living environment. Covid-19 has only worsened this situation.

Social enterprises increasing inclusion and sustainability

As in many countries, social enterprises are a key source of employment and sustainable development in Indonesia. Especially in non-urban areas, they boost local economies with innovative approaches to solve social and environmental challenges that many people face day by day. By providing business support, networking opportunities and access to funding to ten social enterprises, the accelerator programme enables them to scale their impact and increase equality, inclusion and sustainability.

At the same time, IKEA learns important lessons from these innovators, contributing to our mission to become a more sustainable and inclusive business.

Carefully chosen selection criteria

So how does this this co-created accelerator programme strengthen the social entrepreneurship ecosystem in Indonesia while at the same time, enriching our corporate journey towards sustainability? It all starts with carefully defining the selection criteria for onboarding the programme.

With our partner Instellar and in close collaboration with IKEA Indonesia we made sure that the selected enterprises reflect key topics that are aligned with our social mission and business values. They are active in different sectors, with a focus on environmental sustainability, agriculture, and circular economy. These are, at the same time, key areas that can spark local economic development across Indonesia.

Scalability was another key criterium. We looked for business models that not only represent the sweet spot between social and environmental solutions, but have a real capacity to grow and expand to underserved areas outside Java and the main cities.

Benefits to the business community

From our experience in co-created programmes in other regions we know that network building is one of the most valuable aspects of any business accelerator. The Indonesia programme takes this insight to the next level. From the start, our partner Instellar has dedicated a lot of energy into creating networking opportunities for the supported social enterprises. Just several months into the programme, different entrepreneurs had already teamed up with their peers, creating short-term and long-term alliances.

The wider business community also benefits. One of the participating start-ups which focuses on environmentally friendly packaging, has taken the initiative to organise a sustainability summit to be held on 10 September 2022, where other enterprises in the cohort contribute with goods and services. Interested eco-innovators are invited to engage with fellow sustainability-minded people and organisations.

Bringing back valuable learnings

Tailor-made support is another ingredient for success. Based on an initial diagnosis of each social enterprise, we were able to roll out a plan to tackle the bottlenecks that have been identified: whether they are related to marketing, legal issues, finance or any other area of improvement.

The programme delivers this tailored support through learning modules, masterclasses and mentoring. IKEA co-workers act as mentors to the entrepreneurs, sharing their knowledge and IKEA business values. This is not a one-way street, however. Mutual learning is high on our agenda. The Indonesia accelerator brings innovation back to IKEA and gives us valuable insights about social impact in our markets.

Solutions that inspire innovation

These insights inspire different business areas. Introducing nature-based glue for furniture production, high efficiency in last-mile delivery, or integrating refugees in the workplace are just a few examples of solutions provided by the local innovators that we can learn from.

Collaborating with the supported entrepreneurs as business partners is not a programme goal per se, but is always an option. Preparing the supported social enterprises to do business with corporates and facilitating their access to these companies is a highly valued component of the accelerator.

Making a meaningful contribution

As mentors, our IKEA co-workers are close allies to the social entrepreneurs. This enables them to introduce their new understanding about how to do our business better directly into their work.

And, maybe even more important: it makes them feel proud. While supporting entrepreneurs to grow their business, they have found a meaningful way to contribute to positive change for people and the economy in Indonesia.

Interested to learn more? Follow our website: www.ikeasocialentrepreneurship.org and the Instellar Instagram account @iseaccelerator for the latest news on the Indonesia Accelerator programme.

References

A. Environmental Stewardship
To protect the environment, we organize programmes like mangrove nursery and Reforestation, Coastal and River Clean-Up, Community Based Environmental Solid Waste Management, Environmental IEC Campaign and Eco-Academy

B. Food Security and Sustainable Livelihood
To ensure a sustainable livelihood for the community, eco-tourism include Buhatan River Cruise Visitor Center Buhatan River Mangrove Boardwalk are run by the community. Others include Organic Vegetable and Root crops Farming, Vegetable and Root crops Chips and by-products Processing and establishing a Zero waste store.

C. Empowered Communities
To empower the community, we provide product and Agri-Enterprise Development Training, Immersion and Learnings Exchange Program, Earth Warrior Training and Community Based Social Entrepreneurship Training

Author

Lisen Wiren

Programme Manager at IKEA Social Entrepreneurship (ISE)

Lisen Wiren is programme manager for IKEA Social Entrepreneurship (ISE). She has 15+ years of experience in sustainability and social impact, working in the private sector, NGOs and with social entrepreneurship. Passionate and driven, eager to learn and with a positive can-do spirit, Lisen has always focused on promoting better livelihoods for people who need it the most. Before joining the ISE team, she worked for IKEA focusing on human rights and labour migration in Southeast Asia, sustainability and range development, and was sustainability manager for IKEA the Netherlands.

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We see social investment as a continuum that encompasses everything from philanthropy and venture philanthropy to impact investing, CSR and sustainable investment. We call this the “Continuum of Capital”.

We see social investment as a continuum that encompasses everything from philanthropy and venture philanthropy to impact investing, CSR and sustainable investment. We call this the “Continuum of Capital”.

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