Nugroho, Prihadi (2012). "The effects of social systems on batik cluster institutionalisation in Surakarta municipality: A review of local cluster policy" Paper presented at the 9th annual conference of the HDCA, 5-7 September 2012, Jakarta, Indonesia.

Cluster policies implemented in Indonesia for the past decades look still far from its primary goal to improve regional competitiveness nationwide. Although cluster approach is promising theoretically, its practicalities rely on responsiveness variations of local industries and communities to actualise it. As a result, conflicts are likely to occur when uniform cluster policies applied on different localities. Local institutional framework, however, plays an important role in directing cluster growth. It carries out a set of social norms, formal and informal rules, and organisations in a society required for supporting cluster activities. Substantially, it forms local capabilities in accumulating stakeholders, types of industries, and resources available to promoting cluster competence and performance. In this paper I would like to examine how different configuration of local institutions of similar cluster organisations may result in different pathways to grow. By taking up two case studies of batik cluster in Kampung Batik Laweyan and Kampung Batik Kauman – both in Surakarta Municipality – in comparison, I have found that normative social construction and historical values persisting in each kampung (urban village) strongly determine whether respective cluster policy can be adapted or not. In the case of Kampung Batik Laweyan government’s cluster-related programs often fails to be executed easily due to high resistence of local cluster and community members. Its social structure was made up by a plenty of juragan besar batik (large batik entrepreneurs) which carried out antigovernment dominance in nature. They created elitic group network which has been ruling in both social and economic life of Kampung Batik Laweyan. In contrast, the social structure of Kampung Batik Kauman has inherited traditional Javanese Monarchy patronage (Kraton Solo) combined with Islamic values preference, which created aristocratic-styled governance. As a result, the strong influences of charismatic leader are useful to nurturing community cooperation and empowerment. Therefore, it can be concluded that local institutional pattern, leadership style, and voluntary collective action are determinants for building up successful batik cluster institutionalisation to support local cluster policy.