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Penta helix model: A sustainable development solution through the industrial

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ISSN: 2597-8640
Social and Human Sciences HISAS 14

Penta helix model: A sustainable development solution through the

industrial sector
Amrial1, Askar Muhammad2, Emil Muhamad3
1,2,3
University of Indonesia, Indonesia
*Corresponding Email: amrial.rh@gmail.com

Abstract
The industrial sector has a large contribution towards Indonesia’s economy with 21% of Indonesia’s GDP.
However, the development of the industrial sector also creates problems, especially environmental and social
damages. On the other hand, the development of industry in Indonesia has not been monitored by an
institution that evaluates damages on natural environment and environmental supporting capacity.This paper
aims to give a model of sustainable economic development through the industrial sector called the Penta
Helix Model, which is the connection between five elements, which consists of the government,
educational institution, environment valuation institution, society, and industry, each coordinating well with
each other.The results of this paper is an idea for the government to implement this policy so that sustainable
development through development of the industrial sector can be achieved, and also a balanced infrastructure
development, especially education and industry.

Keywords: Industry, Penta Helix Model, Sustainable Development.

INTRODUCTION there has been a significant dominance from the

The industrial sector has a large
contribution towards an economy of a nation as it
creates added value towards the GDP growth.
This also applies towards Indonesia as the
industrial sector composes of 21% of Indonesia’s
GDP as of 2016 (Kementerian Perindustrian,
2016). Furthermore, the growth of the industrial
sector would also increase the amount of jobs and
by extension, the poverty rate of the
aforementioned country. However, the
contribution of industrial sector towards Indonesia
GDP has continuously decreased since 2005
(BPS, 2015). (tidak sesuai dengan aturan
penulisan)
The development of the industrial sector
also creates problems, especially environmental
and social damages. These environmental
damages includes industrial toxic waste and the
over-exploitation of Indonesia’s natural resources,
while social damages includes poverty, and social
imbalance.The large number of people living in
near-poverty, which is below $2 per day, which is
49% of all Indonesian people (World Bank,
2007).
A significant point which shows the
negative side of Indonesia’s development policy is
the imbalance of development between western
and eastern Indonesia. Multiple data show that
western Indonesia, 72% of industry has been
contributed by the island of Java while the other
28% is divided to the other parts of Indonesia
(Haryono, 2013). In the business side, GDP of the
western Islands (Java and Sumatera) is a
combined more than four times larger than the
eastern large islands (Borneo, Nusa Tenggara,
Maluku, and Papua) put together (BPS, 2014). On
the other hand, the Environmental supporting
capacity of the western part of Indonesia has
suffered a decrease because of the aforementioned
large imbalance in industrial spread. In the long-
term, the decrease in environmental supporting
capacity will decrease output (Salim, 2016).
All in all, we could say that Indonesia’s
development has not focused enough on the
synergy between the economic, social, and
environmental aspects, which makes it an
unsustainable development (Salim, 2016). The
lack of quantitative assessment of damages on
natural environment and environmental
supporting capacity by development of industry in
Indonesia has helped in creating this unsustainable
development.
This Paper aims to share a model of
sustainable development that the writers believe
could be used in order to solve the aforementioned
sustainable development problems. This model is
152
a synergy of five sectors, government, institution,
society, and education institution which
strengthens each other with a particular focus on
strengthening the industrial sector. Through this
model, it is hoped that Indonesia’s industrial
sector can be strengthened and developed
sustainably.
METHODOLOGY
This paper used descriptive qualitative
approach as it’s primary writing approach. The
data used in this paper is secondary data, where
secondary data generally in the form of evidence,
records, or historical reports that have been
compiled in the archive (documentary data), both
published and unpublished (Moeloeng, 2014). The
technique used to collect the data in this paper are:
(1) Study of literature, a series of activities related
to data collection methods literature, reading,
recording, and processing of materials research;
(2) Documentary, documentation Studies done by
reading the previous writing reports and journals
related to this writing. In this method, the authors
simply move the relevant data from a source or
document required; (3) Discussion, collecting data
by discussing the idea with the people who are
competent in this subject to solve the certain
issues related to this paper; (4) Intuitive-
Subjective, is the involvement of the author’s
opinion on issues that are being discussed
(Ghofar, 1999).
RESULT
Penta Helix Model for Sustainable Industry
Development
Penta Helix Model is a design of
integration between five sectors which are
coordinated with each other. This concept is a
development of the Quadro Helix theory for
kabupaten/kota by Jann Jidajat Tjakraatmadja
(2012).
Figure 1. Penta Helix Model
Figure 1 shows a synergistic integration pattern
between five sectors that complements each other.
These five sectors are (i)government, (ii) center of
research and education as an idea creator, (iii) a
special institution made by the government for
monitoring the environment and social aspects,
(iv) the society, and (v) industry as the main focus
of this model.
Government
The government has a right to create
policy and regulation towards the other four
sectors in order to create an orderly industrial
activities in Indonesia.The role of government
towards education and research centers must be
executed well by investing in research activity in
order to get a new scientific idea which could be
applied to create pro-environment policy. The
government should also build infrastructure that
supports the development of industry and
economic activities of the society.
Also, the government should give policies
in relation to reward and punishment for actions
of both industries and the society regarding their
contribution in environment damaging activities.
For example, the ISO 14000 standard for the
environment and the ISO 26000 standard for
social. Then, a strong and consistent punishment
must be given to industries or people who violate
environmental sustainability criteria.
The government could also use fiscal
incentives and disincentives. For example,
properly designed tax and subsidy schemes are
viable methods of influencing resource allocation
and enviromental quality.
Figure 2. Effluent Charge or Subsidy
Policy(Seneca & Taussig, 1979)
Figure 2 illustrated the familiar example
of an effluent charge. Effluent charge is a
government policy which charges companies for
their pollution activities in the form of a per unit
tax. This creates incentives for companies to
evaluate alternative costs to avoid the tax which
means causing less pollution.
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Institution
The institution the writers are mentioning
is an institution that gets the right to solve
industrial environmental problems, and is
independent from the government. This institution
would be in charge of valuating the real price of
production through a pro-environment economic
valuation concept, including externalities that are
created by the production activity. As Prof Emil
Salim (2010) mentioned, “getting the price right,
getting the institution right”.
Externalities is the effect of an economic
activity of an individual or a party towards
another individual or party. Without
compensation, which creates a different
perception of costs from an individual standpoint
versus a social (society) standpoint. This creates a
distortion, where prices and quantity may be
optimal personally, but sub-optimal socially
(Patunru, 2010).
According to (Patunru, 2010) economic
valuation method for environmental qualities can
be divided into two groups according to their data
source or information, which is revealed
preference (RP) and stated preference (SP)
illustrated in Figure 3.
Travel Cost
Model
Revealed
Preference Hedonic Approach
Averting Cost
Data
Contingent Valuation
Stated
Preference
Conjoint Analysis
Figure 3. Environmental Valuation Methods
(Patunru, 2010)
The RP approach is marked by
observation on actual individual choices. (1)
Travel cost method is basing valuation of
environmental objects such as recreational or
historical site, on costs paid by visitors to reach
the location. (2) Hedonic approach uses statistical
techniques to measure how changes in quality of
the environment affects the goods market and its
price. (3) And averting cost model counts values
from analyzing expenditures needed to avoid
contamination from the dangers of the
environment degradation.
While SP approach involves direct
questioning how much value is he giving on a
goods or services. (1) Contingent valuation
approach asks respondents their maximal
willingness to pay. (2) Conjoint analysis, on the
other hand, asks respondents to choose between
several options of environmental aspects with
different characteristics.
This institution will calculate the
environmental supporting capacity of Indonesia. It
should give recommendation toward the
government on the areas of Indonesia that has not
reached beyond their environmental supporting
capacity, while rejecting the government if areas
which has reached beyond its environmental
supporting capacity is still doing industrial
development.
Industry
Penta Helix Model puts the industry at the
center of the other four sectors integration. Other
sectors apart from industry would encourage the
industry to grow, evolve, and be sustainable.
Industry is the main focus. This is a concept that
embodies the revitalization of industry for
sustainable development.
Industrialization strategy requires support
and coordination with other strategies such as
careful macroeconomic policy and energy policy.
At the same time, the industry also requires a
knowledge/technology created by research center
for the development of environmentally friendly
industry. Society as a factor of production and at
the same time, target market, also plays an
important role in providing productive labor.
Also, the environmental worldview from
education will make themprefer to
environmentally friendly products. Institution are
also important in order to monitor the production
activity and determining the actual price after the
valuation of the social and environmental aspects.
Educational Institution and Research Center
According to Dale & Newman (2006),
education is very important to exposing students
to develop understanding as they struggle to use
their knowledge in novel ways and a skill they
will need in their further involvement with
sustainable development issues. Moreover, higher
education can play a more decisive role in
promotion of sustainable development through
academic research and university education.
Because, the fundamental characteristics of higher
education that underline its potential influence on
sustainable development can be underlined as
follows (Niu, Jiang, & Li, 2010):
 More innovative and spontaneous, therefore
it could promote the emerging sustainable
development agenda effectively and train
others to carry out it’s aims, particularly the
154
 future generations of teachers in primary and
middle schools.
 Offer far more scientific and technological
support in energy saving and emissions
reduction. Also, contribute to the
development of indicators that assess systems
and implement strategies for new
technologies.
 Influence future policy development through
educating students in all professions and train
future government leaders.
Educational institution could build a new
world view for the society regarding economic
development. Changing the conventional
development paradigm that is currently applied
(Salim, 2007). A worldview of maximizing profit
development oriented. This is important as the
worldview would build a new rationality that
heads towards a preference based on society
preference. With those preferences, the society
would act with a new rationality inclined with the
values of good in economic activities, such as the
awareness to conserve the environment because of
knowledge of negative impacts in the future.
This understanding is essential for the
economic agents. If the consumers (society)
understands it’s new preferences, the decreasing
demand will result in a stop in production of
unsustainable goods. This would create a new
rational balance that would support sustainable
economy.
Society
Two large points that the Penta Helix
Model would do towards the society.
(1) Research and educational institute would
make society into effective labor, which
according to the Solow Growth Model II
(Solow, 2007), labor that became
effective labor would create a larger
output. Other than that, individuals with
education would have an investment
paradigm that would improve the
economy in the future.
(2) Making the society as smart consumers.
Education would give understanding or
worldview that would make the society
has a preference towards goods there are
environmentally friendly, so then the
smart consumer’s decisions would
directly support environmentally friendly
industries and rejects environmentally
unfriendly industries.
Figure 4. How The Penta Helix Model Results in
Sustainable Development
DISCUSSION
As this is simply a theoretical model, this
model still lacks practice and implementation for
it to become a real solution for Indonesia’s
development issues. The sector furthest away
from realization among the Penta Helix’s five
sector is the institutional sector for monitoring and
calculating externalities, as it is not simply an
improvement of an existing sector, but a new
institutional sector on it’s own which has never
been implemented in Indonesia. The lack of goal,
method, definition, and legal foundation is a form
of obscurity that is happening and blocking
operational valuation of the environment. Another
challenge is the high cost of environment
valuation research. A studied by (Pantunru et al.
2007, Braden et al. 2008a, Braden et al. 2008 b)
needs samples as much as 2.500-3.000 households
mostly supported by the help of Environmental
Protection Agency in US While in Indonesia,
large scale research are rarely done.
A solid preparation as well as support and
will from the government is needed for the
creation of the monitoring institution to be
realized and functioned optimally. This is
essential as the monitoring institution is an
important part of the Penta Helix and this model
would not function without it as an independent
valuator. Coordination and harmonization can be
improved by setting a universal goal so that every
sector would move in the same direction, and also
increasing collaboration between them. Of course,
this would not happen without leaders committing
fully to the model, which means this model must
an integral part of Indonesia’s development for it
to work optimally.
CONCLUSION
Indonesia is currently trying to develop
the industrial sector to economically grow faster
and create jobs for people with a target of being a
strong industrial country by 2020. However
155
 industrial development creates social and
environmental damages, ranging from inequality
between Indonesia’s east and west, to natural
disasters caused by environmental damages. The
penta helix model aims to solve this problem by
sinergizing 5 sectors, the government,
environment monitoring institution, the society,
research and education center, and industrial
sector at it’s center. Each sector contributing in its
own way to create a sustainable industry which
values environmental, social, and economic aspect
in development, and further along, it aims to
create sustainable and good growth for
Indonesia’s economy.
This model would create a new
sustainable model for development for Indonesia,
which is important as Indonesia’s natural
resources and environmental supporting capacity
are declining. In order for us to be a long term
developed country, we need to build a sustainable
way of development, one bad example of
unsustainable development is China, which are
selling fresh air as their air is polluted from over
industrialization. Sustainability is absolutely
essential in development and this model tries to
optimize Indonesia’s sustainability while
continuing it’s growth towards being a developed
country.
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