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Compared to advanced countries, industrial clustering phenomena in developing countries have experienced multifaceted forms and different directions. When the former have featured robustness and predictability of cluster performance, the latter has been struggling with messy institutional support for business continuation. Cluster existence in developing countries lacks capabilities to establish economic externalities of industrial agglomeration due to poor inter-industry linkages and business cooperation. In Indonesia context, the emergence of rural industry clustering addresses intriguing explorations on its resilience in coping with the unconducive business environment. This paper is aimed at examining the experience of the emerging batik industry clusters in lagging regions in response to a variety of obstacles in physical, social, economic, and institutional aspects. By using a sequential explanatory mixed-methods design, the study focuses on the formation of inter-industry linkages and business cooperation in the local batik industry clusters. Spatial distribution was analyzed using GIS. The preliminary conclusion suggests that the practice of rural industry clustering has merely demonstrated a trial-and-error opportunistic behaviour rather than a well-organised business milieu. The local government intervention to cluster formation has served as a temporary solution for small-and-medium enterprises development by utilising local resources and empowering village communities. For the long-term, such action may jeopardise the management of rural economies into ineffective burdens instead of promoting cluster competitiveness better.

iop conference series. earth and environmental science

Spatial Distribution on the search for economic externalities acquisition in rural industry clustering: A study of emerging batik industry clusters in lagging regions of Wonosobo Regency and Purworejo Regency, Indonesia