The Developing Micro-Urban Economic Sector in Indonesia: A Study of Business Mechanisms and Social Security Nets

Along with the rapid growth of mega cities in Asia, a continuous built-up of urban areas is visible in Indonesia. Urbanisation in Indonesia has been significantly increasing between 1920 and 1990, as census data shows. It is estimated that by 2020 just about half (55.3 %) of the Indonesian population will be living in urban areas (Sukamdi, 1996). The major factors of urbanisation in the region were regional reclassification, natural increase and rural-urban migration.
In the wake of this regional development a significant change of urban employment occurred. Namely unemployment and underemployment became problems which have been addressed by the Indonesian Government. The most prominent feature of urban areas in Indonesia is the complexity of small-scale enterprises, such as street hawkers, including the strong linkages they have with rural and peri-urban areas. These linkages blur the distinction between “rural” and “urban“. A series of problematic issues is interwined with the growth of the phenomenon of street hawkers. Issues of their existence in macro economic development, issues of urban social environment, business location, business operation et cetera. Who benefits from street vendors? Are there potentials in this sector that could be empowered? What mode of operandi do they have and which business mechanism do they use?

The research focuses on four main objectives. (1) To analyse the nature of business mechanisms among urban street vendors, especially the issue of business networking and capacity building with other institutions, (2) to understand social security networks and the way they develop their business, (3) to disclose the growth of the sector both vertically, in terms of level of business, and regionally in terms of spatial geographic expansion, and (4) to get to know the best way of giving intervention and policy in the future in order to empower the sector.

To fit the circumstances the research has been conducted using retrospective cross-sectional methods; a combination of several qualitative methods such as Delphi studies, observation, ethnographic-qualitative methods, supported by a structured field survey. It is essential to combine qualitative and quantitative methods in this research design in order to obtain knowledge about the subjective experiences of street vendors as well as data on social, demographic and economic aspects. The research has been undertaken in two major phases. The first phase was characterized by observation, socialisation and Delphi study through experts who have already conducted similar previous research. The second phase was a combination of qualitative research tools, including in-depth interviews, with quantitative research tools, like structured questionnaires.