Open AccessThe Development of Small and Medium Entreprises Clusters in Indonesia
Author(s) -
Tulus Tambunan,
Hendrawan Supratikno
Publication year - 2004
Publication title -
gadjah mada international journal of business
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 0.192
H-Index - 9
eISSN - 2338-7238
pISSN - 1411-1128
DOI - 10.22146/gamaijb.5532
Subject(s) - indonesian , linkage (software) , cluster (spacecraft) , indonesian government , cluster development , business , government (linguistics) , small and medium sized enterprises , industrial organization , finance , computer science , work (physics) , mechanical engineering , philosophy , biochemistry , linguistics , chemistry , engineering , gene , programming language
Small and Medium Enterprises (SMEs) in Indonesia are very important not only for employment creation, but also as important sources of economic growth and foreign currencies generation through exports. Since the early 1980s, the Indonesian government has adopted SME development policy through a clustering approach. This paper reviews the existing empirical studies on development of SME clusters in Indonesia. This paper deals with two main questions. First, what are the critical success factors of development of an SME cluster. Second to what extent this policy has contributed to the dynamic of SME clusters in the country. The paper argues that in many cases, the development policy has not been so successful. In essence, most failures can be attributed to the fact that one or more critical factors for successful SME cluster development were either not existing or not addressed correctly. Neglecting cluster linkage to markets is one reason of the failure. Prerequisite for successful cluster development is the cluster's potential to access to growing market, either domestic or abroad.