Abstract:

Sustainable economic development should not just be borne by government as the primary actor. Rural areas in developing countries like Indonesia still rely on government’s aids for sustaining their economic welfare. The presence of private sectors that could create shared value through their business operation is needed to take a role in sustaining their local community’s economic development. In order to do that, business-community partnership is a potential way for businesses to gain competitive advantage while also fostering its local community. Therefore, this research aims to construct a model regarding private-community partnership by studying Alifa Farm’s sheep-fattening business. Alifa Farm is one of the few businesses in Indonesia that creates shared value to its local community through business-community partnership. Key variables along with their interdependences and interrelations in this business-community partnership are identified and modelled by using system dynamic methodology. The simulation results show the importance of lamb supply in sustaining the development of the partnership programs. Carrying capacity role held by lamb supply should have the same growth pace compared to the sheep fattening system adoption rate. Therefore, instead of focusing its shared value only through sheep fattening partnership program, sheep breeding program is an alternative to solve the lamb supply issues while expanding Alifa Farm’s role in sustaining and developing the local community’s economic development. The simulation’s result from the intervention shows an increased number of citizens in the local community who are able to experience the benefit of the partnership. However, the sheep breeding partnership program intervention has a small chance of success since the program require an extensive effort of socialization and training activities in transforming the local community’s traditional way and belief in conducting sheep breeding for many years. Public-private-partnership with the local government is needed to realize the economic development potential of the intervention