Upgrading Traditional Technologies in Small-Scale Industry Clusters: Collaboration and Innovation Adoption in Indonesia.

Abstract

There is by now sufficient evidence that small-scale industry clusters matter in developing countries. This article intends to contribute to the discussion on cluster transformation by focusing on innovation adoption in a roof tile cluster in Indonesia. Clustering allows small-scale enterprises to grow in 'riskable steps' by sharing the costs and risks through collaboration. Using data from longitudinal field surveys we find that technological change is not only a matter of comparing costs and benefits of technologies, but also a matter of access. Collaboration among leaders is crucial in innovation adoption when technological indivisibilities play a role. In our case study it appears that joint action should be viewed as a means to an end only; it was given up in favour of traditional hierarchies in the cluster as soon as possible.

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