Science and Technology Network in the Innovation System of Up-Stream Oil Palm Industry in Indonesia

Abstract

Indonesia is the second largest palm oil producer country in the world. It is projected that in 2008 Indonesia can become the largest oil palm producer in the world. Combined with Malaysia, the two countries have more than 85% of the Crude Palm Oil (CPO) world market share (Pahan, 2006). A deeper observation suggests that the palm oil industry facing some challenges both in the up-stream and down-stream. In the up-stream industry, sustainable provision of high quality oil palm planting material is one of the issues that needs to be addressed with technological innovation. In the down-stream, opportunity for national industry to produce derivative palm oil-based products are still widely open. Both cases requires concerted efforts from the main and supporting actors of the innovation systems in order to enhance its innovation capacity. A study on the science and technology network in the innovation system of up-stream palm oil industry revealed some important findings on the nature of S&T related to development of quality oil palm seeds by local industry. It is found that local industry has low level of interaction with other two main actors of innovation system in Indonesia. On the other hand, there is a case where it has a continuous and long term relationship with other research institutes overseas. This paper will highlight of Indonesian policies impacted the industry, briefly describe some innovation challenges in the oil palm seed industry, and provide an excerpt of a survey on science and technology network review in up-stream palm oil industry.