thirty year. The forest, majority, is converted to become the palm oil plantation Grehenson 2014.
Even Indonesia is the biggest producer of Palm oil in the world, the economic value of Indonesian palm oil is a lowest when compared with Malaysia.
It happens because Indonesia exports more CPO rather than Processed Palm Oil PPO. Even Indonesia has been trying to develop the palm oil Industry, the
process should be accelerated to gain more benefit sooner.
Innovation is one of the key factors to developing the palm oil industry. It can help enterprises to expand their market segment, increase the quality of
product and decrease the production cost Datta, Jessup et al. 2011. In term of palm oil industry, Innovation can help Indonesian gain more income by reducing
the production cost, increasing the plantation productivity and adding value for the commodity.
However, developing innovation is not easy for enterprises; they need a good strategy to reach the goal. Furthermore, Enterprises should collaborate with
other parties to reduce the development cost and accelerate the process.
I. 2 Statement of the Problem
Developing innovation in the palm oil enterprise is difficult to achieve since there are many problems in the developing process such as how to determine
research targets, how to provide resources for the research and how to implement the research result in the field. Furthermore, enterprises also have problems when
making collaboration with other parties in developing innovation such as a lack of coordination among stakeholders, how to delegate tasks for stakeholders and how
to interact effectively among stakeholders.
I. 3 Purpose of the Study
1. Formulating a strategy to develop innovation in the palm oil industry.
2. Determining the best collaboration strategy among Industry, Research
Institution and Government to develop innovation in the palm oil downstream industry.
I. 4 Research Questions
RQ 1 :
What innovative strategies have business enterprises used in the palm oil industry?
RQ 2 : How successful have business enterprises been using those
innovative strategies? RQ 3 : What kind of collaboration is needed by Industry, Research
Institution, and Government to develop innovation in the palm oil industry?
I. 5 Limitations
The research has been conducted in Indonesia and Australia from June 2014 until May 2015. The strategy to develop innovation is based on the best
practice in PT SMART Tbk, one of the biggest palm oil enterprises in Indonesia. Moreover, the collaborative strategy to develop the palm oil downstream
industry in Indonesia is based on the researcher‟s interpretation of the expert‟s opinions. The experts answered the question from the researcher, after that the
question is categorized into several groups to explore the strategy in every step.
However, the result of the research cannot be generalized for other palm oil enterprises in Indonesia because the sample was only one enterprise. The
result, however, can be used as a base for further research to create a new model to develop innovation in the palm oil downstream industry.
II LITERATURE REVIEW
II. 1. Introduction
