Selected Speaker for IDF 2019: Febe Amelia Proposes Social Procurement to Enhance the Impact of Social Enterprises

Febe Amelia

The trend of growing social enterprises must face the challenges of business development and sustainability of the desired social impact. A selected speaker for IDF 2019, Febe Amelia Haryanto, said that these challenges include issues of funding, resources, cash flow, and lack of awareness on social enterprise. In her research entitled “Leveraging Social Procurement through Social Enterprises to Create Social Impact,” Febe proposes creating a social procurement scheme as a solution to address the challenges of social enterprises.

 

“Government uses a large amount of funds for procurement, and it actually holds a unique and massive opportunity to create social impact and achieve sustainable development if spent on social enterprises, even a small part of it,” explained Febe, a graduate of Master of Commerce, Global Sustainability & Social Enterprise, UNSW Business School Sydney.

 

Febe pays special attention to empowerment and social development issues. During her study at UNSW, Febe worked at Lyka Pet Food, a start-up for pet foods in Australia. Febe also worked in a number of non-profit sectors. In 2016, she co-initiated a youth entrepreneurship boot camp for vocational students after winning the Engagement Innovation Fund award from the Foreign Affairs Department of the United States of America.

 

Learning More about Social Procurement

 

In her research on social procurement, Febe explains the difference between social procurement and regular procurement. Social procurement, according to Febe, refers to a procurement process that considers the social impact aspect of the procurement. This can be related to the desired sustainable social impact. For example, linking it to the 8^th Sustainable Development Goal (SDG), namely promoting inclusive and sustainable economic growth, employment, and decent work for all.

 

“If social procurement intends to achieve this, and specifically targets people with disabilities, then one of its forms can be goods and services procurement through social enterprises that intentionally empower or partner with persons with disabilities to generate the desired products,” explained Febe.

 

In this research, Febe found the fact that many social enterprises are hindered in distributing their products by way of Business to Business (B-to-B).

 

“It means distributing products to other business actors (companies) and the government. Generally, it is because the current procurement process still upholds the value-for-money principle, emphasising heavily on price or cost and quality aspects,” said Febe. 

 

Some of the procurements highlight the aspect of track record. This evaluation factor surely does not favour social enterprises that have only started. It means that the social impact aspect has yet to be considered.

 

Febe also interviewed a company that has conducted social procurement. From this interview, it was found that many companies were looking for ways to create social impact through their supply chain. But, they were having difficulties in finding data on the existence of social enterprises and their products.

 

According to Febe, social procurement platforms can help companies wanting to create a social impact by purchasing goods and services from social enterprises in their procurement process.

 

 

The Government’s Role in Social Procurement                

Last year, the Government’s Goods/Services Procurement Policy Agency (LKPP) formulated the new government’s goods/services procurement regulation through the Presidential Regulation Number 16 Year 2018 concerning Government’s Goods/Services Procurement. This Law replaced the Government Regulation Number 54 Year 2010 along with all of its amendments.

 

“This step deserves to be appreciated, because Article 68 of this new Presidential Regulation mentions that goods and services procurement needs to consider sustainability aspects, including economic, social, and environmental aspects,” said Febe.

 

However, Febe thinks this is not enough to promote the implementation of social procurement. Febe mentions several stages that the government can do to develop social procurement.

 

First, making a social procurement policy and framework that includes when and how can social procurement be implemented. Next, it is necessary to identify what fields in which the procurement can be turned into social procurement according to the ongoing government’s development target areas, including the industrial sector, which can engage numerous social enterprises.

 

Second, giving space for social enterprises, which means the government needs to regulate the scope of social enterprises and provide the support required to develop their quality and capacity.

 

“In several countries, these efforts include granting social enterprise certifications to provide credibility and establishing a social procurement platform that can be accessed by both the government and private sector, cooperating with non-government organisations that support social enterprises,” said Febe.

 

Third, establishing a social procurement culture. This stage can be done by disseminating the importance of social procurement and its implementation on procurement actors. The government also needs to find champions to promote changes from within and document good practices.

 

 

Steps from Social Enterprises in Welcoming Social Procurement

If the government, with the support of private companies, is beginning to develop social procurement, social enterprises need to prepare themselves. They must continue to monitor the social impact they desire through honest and professional business. According to Febe, currently the term social enterprise sounds sexier; thus, many companies are labeling themselves as social enterprises. This is due to the unclear regulation regarding this matter in Indonesia.

 

“So, businesses that from the get-go were truly established with a spirit of creating social impact need to ensure the sustainability and extent of such social impact,” said Febe.

 

Furthermore, they must not only maintain their social impact but also ensure their business sustainability. Social enterprises must preserve the quality of their products and services.

 

“This will convince business actors or the government that is conducting the procurement of the social impact created by their social procurement,” added Febe.

 

Febe presented her work in the Ideas and Innovations Marketplace: Co-creating and Collaborating session on the Indonesia Development Forum (IDF) 2019, July 22, 2019. Febe’s presentation was a part of Subtheme 6 of IDF 2019, entitled Fostering Social Enterprises, specifically on strategies to create supporting ecosystem, including policy and regulatory environment, to promote the growth of social enterprises. This subtheme is a part of the main theme of IDF 2019:  “Mission Possible: Seizing the Opportunities for Future Work to Drive Inclusive Growth.”