Batik Solo Industrial Cluster Analysis as Entrepreneurial System: A Viable Co-creation Model Perspective

AbstractThis study diagnoses the issues of viability existed in the depth of Batik Solo industrial cluster. Viable System Model (VSM) in practice would assist the viability investigation process, prescribe, and facilitate the agreed improvements from operation division to policy management as the highest level of the system. Rather than focusing only on the internal factors, as an entrepreneurial system, batik Solo industrial cluster has to gain deeper insight from the external aspects like consumer and market. This study also employs the concept of value co-creation from service science perspective to compliment the powerful internal assessment of the system by VSM with the external one by using a positive collaborative innovation with customers as a third dimension. The concept encourages entrepreneurial system to weight more on the role of customers as the crucial element determining business future performance. The finding is a mapping model of the industry, the roles, and the improvement from viable value co-creation point of view which consist of five functional and complete working organs: (1) operation, (2) coordination, (3) integration, (4) intelligent, and (5) brain. The operation represents the executive systems: firms (Kauman batik cluster, Laweyan batik cluster, Solo traditional market, and travel agencies), research and financial institution (Canting Kakung Community and Bank of Central Java), and university (Universitas Negeri Sebelas Maret and Batik University). The coordination is a mutual assistance of the convergent understanding among operation systems: Batik Surakarta Entrepreneur Union (PPBS), Laweyan Batik Village Development Forum (FPKBL), and Kauman Batik Tourism Village Association (PKWBK). The rest organs are focused on the government from Culture and Tourism Office of Surakarta as the integration, Local Government of Surakarta as the intelligence, and Ministry of Tourism and Creative Economy as the brain. The integration of the system also employed Cooperation and Small and Micro Enterprise Office of Surakarta and Industry and Trade Office of Surakarta. The dominant and overlapping function of government from different layers caused a bottle-necking in the connecting structure of batik Solo industrial cluster as an entrepreneurial system