INDUSTRIAL READINESS IN FORMING AN AUTOMOTIVE SME CLUSTER IN BEKASI REGENCY

• Main Author: SARAHIDHA IRELLI (NIM : 15410077), DWIKY
• Format: Final Project
• Language: Indonesia
• Online Access: https://digilib.itb.ac.id/gdl/view/26782
• Institution: Institut Teknologi Bandung

SMEs are an important sector to the national economy: their characteristics become their own strengths in economic activities, such as utilizing local resources and stimulating the local economy. Globalization forces SMEs to increase their capacities as well as their performance as to not lose to big players and/or foreign products. By the end of 2015 ASEAN will launch a regional cooperation under the name ASEAN Economic Community (AEC), which will affect the industrial sector both positively and negatively since it is a central driver of the Indonesian economy. The AEC will also have an effect on SMEs and will prove as a challenge for them due to their (SMEs) organizational instability while having to compete with other countries in a free market. One way to strengthen SMEs is to form an industry cluster, where multiple companies provide goods to each other and are geographically localized with institutions that work within a common sector (Porter, 1990). Bekasi Regency have been planning on forming a cluster, but until now no clear concept has been made on the plan itself. On the other hand, in order to strengthen SMEs, that cluster needs to be formed as soon as possible. This, however, does not mean the forming of the cluster has to be done straight away without any or little planning since doing so will result in an unsustainable cluster; potentials and obstacles needs to be assessed beforehand. Therefore, a study is needed that assesses initial conditions of SMEs prior to forming an industry cluster. This study aims to identify institutional readiness in forming a cluster by automotive SMEs in Bekasi Regency as a strategy to strengthen local SMEs in facing AEC 2015. This study is conducted through a qualitative approach, to assess the readiness in forming an SME cluster in Bekasi Regency based on existing conditions of cluster-forming factors. <br /> <br /> Based on the analyses done in this study, it is found that cluster-forming factors in Bekasi Regency are not yet ready to form a cluster. The input and demand condition factors of automotive SMEs in Bekasi Regency are already able to support a cluster, however organizational and competition strategies, and supporting institutions are not yet ready. The results of these analyses are expected to help the Bekasi Regency government to create a cluster formulation strategy to strengthen SMEs in facing AEC 2015.