The Innovation Performance of State-owned Enterprises in Indonesia

Abstract

State-Owned Enterprises (SOEs) play crucial roles in the economy, including in the most advanced ones. SOEs, especially in Indonesia, are facing dynamic changes and need to adapt to rapid environmental changes and high complexities. Internally, they are required to ensure that wealth is created and distributed throughout the nation as mandated by the law to meet the demand of public services and to protect domestic concerns. On the other side, they must improve their competitiveness to deal with global open market competition in both technological and demand changes. SOEs' transformation has been the goal of Indonesia's economic renewal. This paper aimed to understand the SOEs' strategic entrepreneurship processes in developing their capabilities to create systematic innovation performance. Dynamic capability framework is used to explain entrepreneurship and strategic actions through the variables of firm absorptive capacity in the changing environment and the relationship on dynamic innovation capability.