Abstract
The term Absorptive Capacity (AC) refers to maximizing the external knowledge transfer into the organization in order to improve its performance. Since its introduction in year 1990, AC has been applied widely in many fields such as: economy, business, KM, HR, intellectual capital, IT, operation management, marketing, etc. Due to its wide application, nevertheless, The AC application in both Indonesian industry and higher education institutions (HEIs) are still rare to find. The Indonesian Directorate General of Higher Education (DGHE) has encouraged creating effective collaboration model that enables to link the HEIs with the industries in order to improve knowledge creation in improving product development that can be used by the firms. For this reason, the article examines the effective AC model that enables to assist in improving new product development (NPD) process in the polytechnic perspectives.
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