IDEAS home Printed from https://ideas.repec.org/a/ags/jordng/45678.html
   My bibliography  Save this article

Development of Rural Manufacturing SME Clusters in a Developing Country: The Indonesian Case

Author

Listed:
  • Tambunan, Tulus

Abstract

Development of manufacturing small and medium enterprises (SMEs) is a key engine to promote development of rural economy in developing countries. A common industrial organization among manufacturing SMEs, especially in rural areas, in Indonesia as in many other developing countries is clustering, where firms producing similar products concentrate in a certain area. This has led the Indonesian government to adopt a clustering approach as an important element in its rural development strategy to promote the development of rural industry, which consists mainly of SMEs. The main aim of this study is to identify critical success factors of development of rural manufacturing SME clusters in Indonesia. From a number of cases, it reveals that direct government supports are not the main successful factor, or the role is minimal. Instead, the most critical ones are strong inter-firms linkages in clusters and external networks between the clusters and institutions outside the clusters, especially large enterprises (LEs), through subcontracting and traders/trading companies in urban areas. Through such external linkages, firms in clusters secure their access to a wider market.

Suggested Citation

  • Tambunan, Tulus, 2008. "Development of Rural Manufacturing SME Clusters in a Developing Country: The Indonesian Case," Journal of Rural Development/Nongchon-Gyeongje, Korea Rural Economic Institute, vol. 31(2), May.
  • Handle: RePEc:ags:jordng:45678
    as

    Download full text from publisher

    File URL: http://purl.umn.edu/45678
    Download Restriction: no

    References listed on IDEAS

    as
    1. Albert Berry & Edgard Rodriguez & Henry Sandee, 2001. "Small And Medium Enterprise Dynamics In Indonesia," Bulletin of Indonesian Economic Studies, Taylor & Francis Journals, vol. 37(3), pages 363-384.
    2. Yuri Sato, 2000. "Linkage Formation by Small Firms: The Case of A Rural Cluster in Indonesia," Bulletin of Indonesian Economic Studies, Taylor & Francis Journals, vol. 36(1), pages 137-166.
    3. Schmitz, Hubert & Nadvi, Khalid, 1999. "Clustering and Industrialization: Introduction," World Development, Elsevier, vol. 27(9), pages 1503-1514, September.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Tambunan, Tulus, 2015. "Financial Inclusion, Financial Education, and Financial Regulation: A Story from Indonesia," ADBI Working Papers 535, Asian Development Bank Institute.

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:ags:jordng:45678. See general information about how to correct material in RePEc.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (AgEcon Search). General contact details of provider: http://edirc.repec.org/data/kreinkr.html .

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service hosted by the Research Division of the Federal Reserve Bank of St. Louis . RePEc uses bibliographic data supplied by the respective publishers.