Open Innovation Model: Empowering Entrepreneurial Orientation and Utilizing Network Resources as Determinant for Internationalization Performance of Small Medium Agroindustry

Abstract

Abstract Agroindustry is one of the sectors which provides a big support to national economy. However, the added value given by this sector is still low, particularly for processed products, most of the products exported by this sector are raw materials. Agroindustry sector in Indonesia is generally dominated by Small Medium Industries (SMIs) that still have to face various limitations in order to give value added of the product both of manufacturing side and management aspect. Tendency of market globalization and trade liberalization has opened the business opportunities for entrepreneurs in agro industry sector to do many international activities, among others is through exports. Demand of the global era requires entrepreneurs who are willing to face risks, innovative, proactive and compete aggressively to be able to seek new opportunities and increase competition advantages. Innovation is needed to provide value added to agroindustry products through value creation, so that raw material exports could be reduced. Entrepreneurs can utilize open source that involves external parties by utilizing network resources. The paper proposes conceptual model which can be used to conduct empirical study in the development of agro industry sector. The modelling is developed on the basis of empirical study and concepts related to entrepreneurial orientation, network resource and open innovation/co-innovation that can be used to increase the performance of SMIs.