Critical issue mapping of Indonesian natural rubber industry based on innovation system perspectives

Abstract

The added value of Indonesian natural rubber industry is the lowest among other main natural producing countries, Malaysia and Thailand. It is necessary to overcome this problem especially based on innovation system perspectives. The objectives of this study are to map the problems of the natural rubber industry and developing alternative solutions to these problems. This study use systems approach, namely Soft System Methodology (SSM) and Strategic Assumption Surfacing and Testing (SAST), which aim is to get a complete picture (rich picture) of the problems in Indonesian rubber industry and to identify the strategic issues that become the industry priorities through sectoral innovation system approach. Based on the mapping of strategic issues, it shows that almost all indicators were in a certain planning region. Such as policy issues (general/parent policies, financing policies, price policies, tax policies for R&D and Innovation, education and training policies), Institutional Issues (formation of financial institutions and institutional arrangements), Human Resources, Industrial issues (Development of downstream industries), technology (technology development as needed), as well as financial and market problems. This implied that there were many strategic and urgent problems that must be addressed in the development of the downstream industry and the innovation system of Indonesia’s natural rubber industry. It is important to highlight the interaction between innovators, intermediaries and innovation users. In addition to the interaction within the system, interactions outside the systems are also needed, such as foreign research institutions, etc. Government and financial institution support, strengthening the innovation institution and the existence of a legal direction and protection (such as the system innovation law/act) are the key factors in enhancing the innovation-based industry and increasing the industry competitiveness.