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Strengthening Cluster Building in Developing Country alongside the Triple Helix: Challenge for Indonesian Clusters - A Case Study of the Java Region

Irawati, DESSY (2007): Strengthening Cluster Building in Developing Country alongside the Triple Helix: Challenge for Indonesian Clusters - A Case Study of the Java Region.

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Abstract

This paper is a component of my conceptual foundation paper due to PhD field work in Indonesia to understand the possibility and the chance for developing country such as Indonesia to strengthen cluster building alongside The Triple Helix model within the region of Java. This paper is a conceptual paper based on case study in Indonesia related to the Triple Helix and cluster approach for chosen Industrial Clusters in Java. In this paper, the focus will be on six selected industrial clusters across the Java region. They are Gresik Industrial District in East Java, Tugu Wijaya Semarang in Central Java, Sentul Bogor in West Java, Jababeka in Bekasi, Kujang Industrial District, and Kawasan Berikat Nusantara in Jakarta. In conjunction with the fact in Indonesian industrial condition, Indonesian government initiated the setting up of industrial district which later known as 2 industrial cluster to make existence easier for both domestic and international investors by providing all necessary infrastructure, facilities and housing in one safe location - at a reasonable cost - thus providing a secure base for industry and manufacturing. Regarding clustering approach, Indonesia has a very long tradition of SMEs (Small and Medium Sized Enterprises) cluster around similar activities. In 2002, the cluster comprised approximately 3700 firms mostly SMEs employing 58.000 permanent workers (Loebis and Schmitz, 2005). They are usually craft industries and export oriented driven. About 70% of the cluster production is exported while the rest is sold on the domestic markets. However, little is known about the critical success factors that determine economic development of cities and regions and empirical studies that draw lessons for policy are scarce (Tichy, 1998), specifically for implementing cluster approach in industry/manufacturing sector in Indonesia. Moreover, there are good reasons to doubt to what extent a purely sectoral view is adequate to analyse region economic growth and to design policies. There are many indications that urban economic growth increasingly seems to emerge from fruitful cooperation between economic actors, who form innovative networks. It is in these geographically concentrated network configurations, or ‘cluster’ that value-added and employment growth in urban regions is realised. This demands a new policy approach in urban economic development, specifically for Indonesian study. Accordingly, it is motivating to investigate the process of cluster building in industrial district in Java region as the important region due to economic, social, and political condition. Thus, details can be read in the following section within this paper.

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