Cases study evidences Learning with low and without RD activity

22 Forum Tahunan Pengembangan Iptek dan Inovasi Nasional V, Tahun 2015

2.2 Cases study evidences

i Innovation in capital goods firms Product innovation in Indonesian capital goods firms are conduted as the improvement of existing machineries products. It is the results of informal learning without conducting formal RD activity to create minor innovations, which is ‘new to the firm’ innovations — rather than ‘new to the market’. The innovation is stimulated by the limited co-operative arrangements by producer, supplier and consultant. The producers-users interaction are in the forms of exchange in goods and information as well as cooperation to stimulate innovation. Some cases of upgrading machines and related technologies in capital goods firms are as follows: i co-development of new machines by users-producers interaction, i.e. the modification of Fluidized Bed Combustion technique; ii collaboration between user-producers in upgrading or customizing standard machines, i.e. supplying control panel; and iii development of new machines, equipments and tools, i.e. development of Nozzle Air Distributor, power plant, passenger boarding bridge and medical device USG. The main driver of technological learning in the capital goods firms is the vision of top management. Aminullah, 2014 ii Innovation in natural resource based firms Some natural resources based firms has conducted product innovation driven by internationalization of production network through outward FDI. The natural resouce based MNEs are in the areas of foods and natural cosmetics. The MNEs have developed their owned knowledge capability then transferred and adapted the knowledge to host countries. The firms conduct product innovation with RD activity, either with intramural or extramural RD. A large food firm does not has its own RD facilities and generally conduct product innovation through extramural RD by collaborating with other innovation sources, such as universities and research institutions. The food firm provides full RD financing and buy the intelectual property on the product inovation conducted by universities.While annother food firm has invested in RD facility and allocated intramural RD financing for developing new product innovation. Then, the natural cosmetic firm has grown from a small firm to a large firm then expanded to MNEs by developing various product innovation with internal RD activity. Aminullah, 2013 iii Innovation in bio-based chemical firms Biobased chemical firms acquire, develop, and accumulate knowledge and technology through interactive learning among RD unit, production, marketing units inside the firms, as well as interaction with external sources of knowledge universities, research institution, suppliers, and users. The large scale of firm acquires knowledge basically through RD activities, monitoring of scientific advancement, and technology spillover, but for the small firms gain knowledge and technology through learning by DUI doing, using, and interacting inside their small laboratory. The biobased chemical firms develop technology by conducting RD activities to solve the negative environmental impact, to find effective pest control, and to improve soil fertility as well as to meet the standard of safety and security of biobased chemical products. Innovation in the biobased chemical product is driven by: i. solving the environmental problems induced by petroleum-based products, ii. finding innovative raw material supply; and iii. developing processing technology to meet the standard of safety and security in biobased chemical products. Supporting the chemical firms to interact with public RD and university is important to promote technological innovation through RD. The enabling factors of biobased chemical products innovation are the availability of scientists and researchers in university to conduct research collaboration in firm’s RD unit. Aminullah, 2015

3. RD intensity and economic prosperity