Cluster and Linkage BIBLIOGRAPHIC REVIEW

19 Supporting Industry Related Industry Core Cluster Tapioca Industry Cassava Producer Carpenter Blacksmith Local Manufacturer Cassava Producer Cassava Producer

E. Cluster and Linkage

According to Nagae 2004, cluster approach has been applying for development of IKM. Ministry of trade and industry released “National Industry Development Strategy” in November 2000 in which a cluster policy was identified as a prime mover for industry development. It is also included into the rolling plan of IKM development 2002-2004. It is noted that a cluster industry is a value added chain group of industry consisting of “core cluster industry”, “group of supporting industry”, and “group of related industry” aiming at competitiveness increase in the market, and also cost reduction of processing, shipping, transportation, and marketing in cluster industry. Cluster industry in Indonesia can be divided into five categories in accordance with OECD clarification. 1. Natural resource intensive cluster 2. Labor intensive cluster 3. Capital intensive cluster 4. Technology intensive cluster 5. Policy driven cluster Figure 2 Schematics of core cluster Agroindustry is belonging to the category of natural resource intensive cluster, of course, such as food industry, vegeTable oil industry, canning industry and etc. At year of 2004, 23 core cluster industries are reported to have established. In case of agroindustry, only beverage industry soft drink industry was identified as core cluster industry Nagae, 2004. 20 ---- Linkage ---- Core Cluster Provincial Authorities Technical Team Asnawi 2002 reported that ITTARA Industri Tepung Tapioka Rekyat was successfully implemented by the provincial government of Lampung since 1998. The government had paid attention to the cassava farmer who are very poor, and provided a special program to support them in term of tapioca home industry in cluster form named by ITTARA. This is an umbrella program led by the government and the advisory technical group, and KUD people concerned. The objectives of ITTARA are; 1. increase value added in raw material for cassava farmer 2. improve technology for cassava cultivation and tapioca treatment 3. develop plan and activity by themselves in village scale 4. open crude tapioca factory to cassava farmer for their treatment Figure 3 Schematics of core cluster and linkage From view point s of cluster and ABG linkage, this ITTARA umbrella program is seemed to be very appreciated as a good example to think of both cluster and linkage in grass-root basis development. Upon literature review including ITTARA, some of hypothesis could be generated as follows. 1. A cluster is formed with an input sector supplying raw material, a processing sector, and a market sector to encourage their power and performance better. 2. In the sector of agroindustry, though the government support is in short, but available technical support is better to be extended to a core cluster for future. 21 Medium Industry Tapioca Home Industry Crude Tapioca Farmer Cassava Farmer Cassava Farmer Cassava Home Industry Crude Tapioca Farmer Cassava Farmer Cassava Farmer Cassava --- CoreCluster --- --- CoreCluster --- --- Primary Cluster --- --- Primary Cluster --- --- Secondary Cluster --- 3. Therefore, a tripartite linkage together with cluster principle is likely proposed in this paper to succeed such agroindustry in rural development program for future. 4. Toward this kind of formation of value added chain development, a technical support must be extended by academic institution or a supporting group, and a research development will be also implemented to improve the current processing techniques. Figure 4 Schematic view of primary cluster and secondary cluster 5. Academic institution and UMKM linkage: This is just a proposal of linkage between academic institution and UMKM in agroindustry aiming at a site based research to fit the real needs and requirements, and also aiming at UMKM empowerment in term of quality assurance. 6. Regarding rural and regional development, many policies and action plans have been presented by the ministries concerned, but UMKM is still left behind their status and also remained as poor as it is. This is also another proposal to formulate some sort of “Field Laboratory” under the linkage concept. 22 University St. + Adv. UMKM Cluster Target Field Laboratory Problems Issues Research Subjects Topics S1 Research S2 Research S3 Research Improvement Works Process Improvement Quality Improvement Marketing Improvement Cluster Development Inputs Outputs in Kinds New Problems Issues New Requirement Improvement Needs Empowerment Needs Feedback Operation SWOT Work Core Basement Figure 5 Schematic view of field laboratory with cluster

F. Quality Standard