Technology Transfer and Diffusion among Manufacturing Small and Medium Enterprises in Indonesia

Abstract

It is evident everywhere that in manufacturing industry, levels of productivity are higher in large enterprises (LEs), including foreign-owned firms or multinational companies (MNCs), than in small and medium enterprises (SMEs), partly because the former enterprises enjoy higher levels of technological capacity. Thus, for SMES, increased productivity might be facilitated through a scaling-up of knowledge or technology. The case study of the Tegal metalworking industry in Central Java presented in this article shows that the most important channels for the diffusion of knowledge/technology among domestic manufacturing SMEs include subcontracting arrangements with foreign direct investment (FDI). However, the importance of FDI as a source of technology/knowledge varies across the differing types of domestic firms. This study also shows that government agencies are currently the largest providers of training and similar assistance for manufacturing SMEs in the country. Such programmes, however, are rendered less effective by a low level of coverage, a lack of effective evaluation and assessment, and a supply rather than a demand orientation.

Transfer of Technology to and Technology Diffusion among Non-farm Small and Medium Enterprises in Indonesia

“…Since the New Order era, sentra have become the focus of government development strategies for SMEs in all manufacturing subsectors, including the metalworking industry. The majority of metal workshops are small, employing less than 20 workers, mainly male (Tambunan 2007).…”

“…2 (see Tambunan 2007). According to the size of production and level of production sophistication, there are two types of workshops in the Tegal metalworking industry: MEs and LEs as one type, called inti, and SEs and MIEs as another type, called plasma.…”

Barriers in the Implementation of Total Quality Management in Indonesian Manufacturing Organizations

“…For the year 2000, the total export was valued at US $ 62016.4 million, a year on year increase of 27.43% against the 1999 figure (Berita Resmi Statistik, 2001). Tambunan (1999) highlighted that the lack of stability may be due to the stiff competitions faced by Indonesian exporters against other exporters from Pakistan, China, Vietnam and India. An area of focus in relation to this problem is the quality of local (Indonesian) products, which are reputed to be inferior when compared to products from other countries.…”