New Economics Papers Economics of Strategic Management

Edited by: Joao Jose de Matos Ferreira

          http://econpapers.repec.org/RAS/pfe55.htm

          University of the Beira Interior

Date:      2010-12-04

Papers:    19



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In this issue we have:

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1. Internacionalización, Tramas Productivas y Sistema Nacional

  de Innovación

    Morero, Hernán



2. The Importance of Broadband Provision to Knowledge Intensive

  Firm Location

    E. A. Mack; L. Anselin



3. The Knowledge Base Evolution in Biotechnology: A Social

  Network Analysis.

    Jackie Krafft; Francesco Quatraro; Pier-Paolo Saviotti



4. Untersuchung von Innovationsdeterminanten in der deutschen

  Laser-Industrie

    Muhamed Kudic; P. Bönisch; Iciar Dominguez Lacasa



5. Alliance Coordination, Dysfunctions, and the Protection of

  Idiosyncratic Knowledge in Strategic Learning Alliances

    Müller, Dirk



6. Organizational capital and firm performance. Empirical

  evidence for European firms

    Claudia Tronconi; Giuseppe Vittucci Marzetti



7. Virtual R&D teams and SMEs growth: A comparative study

  between Iranian and Malaysian SMEs

    Ale Ebrahim, Nader; Ahmed, Shamsuddin; Taha, Zahari



8. Factors affecting the decision making of out-sourcing in

  textile in Pakistan

    Subhani, Dr.Muhammad Imtiaz; Osman, Ms.Amber



9. Virtual Teams: A New Opportunity to Develop a Business

    Ale Ebrahim, Nader; Ahmed, Shamsuddin; Abdul Rashid, Salwa

    Hanim; Taha, Zahari



10. Firms’ R&D cooperation strategies: the partner choice

    Chiara Franco; Manuela Gussoni



11. Prevalence and Determinants of Social Entrepreneurship at

  the Macro-level

    Chantal Hartog; Brigitte Hoogendoorn



12. The International Circulation of Elites: Knowledge,

  Entrepreneurialand Political

    Andrés Solimano; Diego Avanzini



13. University Development Through Regional Strategic Alliances

    Popy Rufaidah; Dwi Kartini; Faisal Afiff



14. Too Big to Innovate? Scale (dis)economies and the

  Competition-Innovation Relationship in U.S. Banking

    Bos Jaap; Lamoen Ryan van; Economidou Claire



15. Competition within firms

    Lisa Bruttel; Simeon Schudy



16. Does Schumpeterian Creative Destruction Lead to Higher

  Productivity? The effects of firms’ entry

    Carlos Carreira; Paulino Teixeira



17. SMEs; Virtual research and development (R&D) teams and new

  product development: A literature review

    Ale Ebrahim, Nader; Ahmed, Shamsuddin; Taha, Zahari



18. Estratégia de localização bancária: teoria e evidência

  empírica aplicada ao estado de Minas Gerais

    Guilherme Jonas Costa da Silva; Frederico G. Jayme Jr



19. Strengthening Entrepreneurial Global Competitiveness by

  Utilizing Local Culture

    Erman A Sumirat; Sunu Widianto





----------------------------------------------------------------------------



1. Internacionalización, Tramas Productivas y Sistema Nacional

  de Innovación



   Morero, Hernán



This paper aims to study the capacity of the National Systems of

Innovation to affect the innovative performance of firms in

internationalized production activities of a developing economy.

The research adopted a production networks perspective on

Innovation Systems and the empirical work involved a survey to

firms from the automotive productive network in Argentina. The

importance of domestic and external sources of knowledge to the

innovative performance of these firms was evaluated through the

use of multivariate analysis and data clustering techniques. The

main findings of the study are that: i) the innovative

performance of argentinian auto parts firms is positively related

to certain complementation between internal and external sources

of knowledge; and that ii) the importance of the national

innovation system is essential for them, even if those firms

belongs to internationalized production networks that operates in

a developing country.



Keywords: Internationalization; National System of Innovation;

         Production Networks; Automotive Production Network;

         Argentina

JEL:      B52

Date:     2010-03-26

URL:      http://d.repec.org/n?u=RePEc:pra:mprapa:26964&r=cse





        2. The Importance of Broadband Provision to Knowledge Intensive

  Firm Location



   E. A. Mack

   L. Anselin



Despite the volume of literature afforded knowledge work and

innovations in information and communications technologies (ICTs),

few studies have examined the importance of ICTs to firms in

knowledge industries. This study will develop spatial econometric

models to examine the relative importance of the level of

broadband provision to knowledge intensive firms in select U.S. 

metropolitan statistical areas (MSAs). Results demonstrate the

need for both a spatial econometric and a metropolitan area

specific evaluation of this relationship. They also suggest

potential spillover effects to knowledge intensive firm location,

which may explain why some regional economies are relatively more

successful at stimulating firm growth in this increasingly

important sector of the U.S economy.



Date:     2010

URL:      http://d.repec.org/n?u=RePEc:asg:wpaper:9&r=cse





        3. The Knowledge Base Evolution in Biotechnology: A Social

  Network Analysis.



   Jackie Krafft (GREDEG - Groupe de Recherche en Droit,

     Economie et Gestion - CNRS : UMR6227 - Université de Nice

     Sophia-Antipolis)

   Francesco Quatraro (GREDEG - Groupe de Recherche en Droit,

     Economie et Gestion - CNRS : UMR6227 - Université de Nice

     Sophia-Antipolis, Department of Economics, University of

     Turin - University of Turin)

   Pier-Paolo Saviotti (GREDEG - Groupe de Recherche en Droit,

     Economie et Gestion - CNRS : UMR6227 - Université de Nice

     Sophia-Antipolis, GAEL - Grenoble Applied Economic

     laboratory - Aucune)



This paper applies the methodological tools typical of social

network analysis (SNA) within an evolutionary framework, to

investigate the knowledge base dynamics of the biotechnology

sector. Knowledge is here considered a collective good

represented as a co-relational and a retrieval-interpretative

structure. The internal structure of knowledge is described as a

network the nodes of which are small units within traces of

knowledge, such as patent documents, connected by links

determined by their joint utilisation. We used measures referring

to the network, like density, and to its nodes, like degree,

closeness and betweenness centrality, to provide a synthetic

description of the structure of the knowledge base and of its

evolution over time. Eventually, we compared such measures with

more established properties of the knowledge base calculated on

the basis of co-occurrences of technological classes within

patent documents. Empirical results show the existence of

interesting and meaningful relationships across the different

measures, providing support for the use of SNA to study the

evolution of the knowledge bases of industrial sectors and their

lifecycles.



Keywords: Knowledge Base, Social Network Analysis, Variety,

         Coherence, Industry lifecycles; exploration/exploitation

Date:     2010-11-23

URL:      http://d.repec.org/n?u=RePEc:hal:wpaper:hal-00539002_v1&r=cse





        4. Untersuchung von Innovationsdeterminanten in der deutschen

  Laser-Industrie



   Muhamed Kudic

   P. Bönisch

   Iciar Dominguez Lacasa



Empirical and theoretical contributions provide strong evidence

that firm-level performance outcomes in terms of innovativeness

can either be determined by the firm’s position in the social

space (network effects) or by the firm’s position in the

geographical space (co-location effects). Even though we can

observe quite recently first attempts in bringing together these

traditionally distinct research streams (Whittington et al. 2009),

research on interdependent network and geographical co-location

effects is still rare. Consequently, we seek to answer the

following research question: considering that the effects of

social and geographic proximity on firm’s innovativeness can be

interdependent, what are the distinct and combined effects of

firm’s network and geographic position on firm-level innovation

output? We analyze the innovative performance of German laser

source manufacturers between 1995 and 2007. We use an official

database on publicly funded R&D collaboration projects in order

to construct yearly networks and analyze firm’s network positions.

Based on information on population entries and exits we

calculate various types of geographical proximity measures

between private sector and public research organizations (PRO).

We use patent grants as dependent variable in order to measure

firm-level innovation output. Empirical results provide evidence

for distinct effect of network degree centrality. Distinct effect

of firm’s geographical co-location to laser-related public

research organization promotes patenting activity. Results on

combined network and co-location effects confirms partially the

existence of in-terdependent proximity effects, even though a

closer look at these effects reveals some ambiguous but quite

interesting findings.



Keywords: geographical co-location, network positioning,

         innovation output

JEL:      O31

Date:     2010-10

URL:      http://d.repec.org/n?u=RePEc:iwh:dispap:22-10&r=cse





        5. Alliance Coordination, Dysfunctions, and the Protection of

  Idiosyncratic Knowledge in Strategic Learning Alliances



   Müller, Dirk



In high technology industries firms use strategic learning

alliances to create value that can’t be created alone. While they

open their interorganizational membrane to gain new skills and

competences, generate new products and services, accelerate

development speed, and enter into new markets their idiosyncratic

knowledge base may be impaired when knowledge related

dysfunctions like the unintended knowledge transfer, asymmetric

learning speed or premature closing occur. Within a value

approach we examine the interplay of alliance coordination

activities that enhance value creation, emerging knowledge

related dysfunctions, and formal and organizational protections

measures which shall safeguard firms intellectual crown jewels.

We tested our hypotheses with a sample of 111 strategic alliances

of young technology based Enterprises (YTBEs) with competing

partners in high and key technology industries. Our findings

suggest that a focal firm’s alliance management is well advised

to intensely coordinate the alliance and to be aware of

dysfunctional tendencies that erode alliance value. Since

organizational protection measures could exaggerate dysfunctional

effects they should be deployed very deliberately on a modest

level. Formal protections measures, in contrast, seem to

aggravate coordination activities’ value creation effect by

setting behavioral guidelines. Moreover, an unsuccessful

negotiation process of formal protection agreements may allow a

deselection of partners that would not obey others intellectual

property interests. Finally, we highlight theoretical and

managerial implications that arise from these findings. --



Keywords: Strategic Learning Alliance,Protection

Date:     2010-10-14

URL:      http://d.repec.org/n?u=RePEc:zbw:esprep:41039&r=cse





        6. Organizational capital and firm performance. Empirical

  evidence for European firms



   Claudia Tronconi

   Giuseppe Vittucci Marzetti



The paper assesses the impact of Organizational Capital (OC) on

firm perfor- mance for a sample of European firms. OC is proxied

by capitalizing an income statement item (SGA expenses). A

rationale for this methodology is provided. Results are robust

and show the strong effect of OC on firm performance.



Keywords: Intangibles, Knowledge-based resources, Organizational

         capital,R&D capital stock, Translog production function

JEL:      C21

Date:     2010

URL:      http://d.repec.org/n?u=RePEc:trn:utwpde:1018&r=cse





        7. Virtual R&D teams and SMEs growth: A comparative study

  between Iranian and Malaysian SMEs



   Ale Ebrahim, Nader

   Ahmed, Shamsuddin

   Taha, Zahari



This paper explores potential advantages of using virtual teams

for small and medium-sized enterprises (SMEs) with a

comprehensive review on various aspects of virtual teams. Based

on the standing of the pertinent literature, attempt has been

made to study the aspects by online survey method in Iran and

Malaysia. In both countries, SMEs play an important role in their

economies, employments, and capacity building. Virtual R&D team

can be one of the means to increase SMEs efficiency and

competitiveness in their local as well as global markets. In this

context, surveys have been conducted to evaluate the effects of

virtuality to the growth of SMEs. The study addresses some

differences between two countries in engaging virtual research

and development (R&D) teams in their SMEs. It is observed that

there is a significant difference between the SMEs turnover that

employed virtual team and that did not employ the virtual team.

The way for further studies and recommend improvements are

proposed.



Keywords: Virtual R&D team, small and medium enterprises, survey,

         developing countries.

JEL:      O47

Date:     2010-07-01

URL:      http://d.repec.org/n?u=RePEc:pra:mprapa:26983&r=cse





        8. Factors affecting the decision making of out-sourcing in

  textile in Pakistan



   Subhani, Dr.Muhammad Imtiaz

   Osman, Ms.Amber



This research provided the study of importance of factors

affecting the decision making of out-sourcing & supplier

performance in Textiles domain. The textile market of USA is the

scope of this research. The basis of this study allowed

comprehending the importance / weight of factors of out-sourcing (

including Delivery, Flexibility, Cost, Quality & Reliability)

varied according to the buyers needs. Buyer’s needs some factors

were high weight / importance for one buyer and at the same time

the same factors were low weight / for another buyer. It

delineated the root to supply chain managers and experts for

textiles industry for taking the right strategic decision for out-

sourcing in today’s competitive market.



Keywords: Decision Making of Out-Sourcing; Out-Sourcing; Supply

         Chain Management.

JEL:      F16

Date:     2010-11-01

URL:      http://d.repec.org/n?u=RePEc:pra:mprapa:27006&r=cse





        9. Virtual Teams: A New Opportunity to Develop a Business



   Ale Ebrahim, Nader

   Ahmed, Shamsuddin

   Abdul Rashid, Salwa Hanim

   Taha, Zahari



Virtual teams give many advantages to organizations, including

increased knowledge sharing and improve organizational

performance. Virtual teams have altered the expectations and

boundaries of knowledge worker’s interactions and make a new

opportunity to develop the business. In this paper, we present

summary results of an online survey. The online questionnaire was

emailed by using a simple random sampling method to 356 Malaysian

manufacturing small and medium –sized Enterprises (SMEs). The

findings of this study show that SMEs in Malaysia are gaining to

use virtual teams, and it can be concluded that virtual teams

provide a new platform for developing the business in SMEs. Based

on the study, we suggest avenues for future research that are

important to advancing our understanding of virtual team effects

on business growth.



Keywords: Collaboration; virtual teams; SMEs; Entrepreneurship;

         Business development; Survey

JEL:      M11

Date:     2010

URL:      http://d.repec.org/n?u=RePEc:pra:mprapa:26934&r=cse





        10. Firms’ R&D cooperation strategies: the partner choice



   Chiara Franco

   Manuela Gussoni



The aim of this paper is to provide empirical evidence on the

issue of ?rms’ R&D cooperation strategies, examining the topic

from the point of view of the partner choice. Literature has

deeply analyzed the motivations inducing ?rms to form research

joint ventures, instead, the investigation of partner selection

strategies is disregarded even though it is one of the most

critical decisions for a ?rm when forming an alliance. For this

reason, by making use of data coming from the fourth Italian

innovation survey (2002- 2004), we contribute to the the

literature by estimating, through the use of a multinomial

logistic model, the determinants that a?ect the ?rms’ choice

among di?erent types of potential R&D cooperation partners. We di?

erentiate among three cooperation strategies that are: (i)

cooperation with only market partners; (ii) with only science

partners; and (iii) with both of them. Our ?ndings provide

support to the hypothesis that di?erent variables determine di?

erent partner choices according to the sector analyzed. In the

manufacturing sector, for example, foreign multinational

companies or export oriented ?rms prefer to cooperate only with

market partners. In the services, ?rms receiving public subsidies

for innovation prefer science cooperations to all the other

cooperation arrangements leaving room for policy implications.



Keywords: R&D cooperations; partner selection; industry-

         university linkages;service sector.

JEL:      O32

Date:     2010-09-10

URL:      http://d.repec.org/n?u=RePEc:pie:dsedps:2010/104&r=cse





        11. Prevalence and Determinants of Social Entrepreneurship at

  the Macro-level



   Chantal Hartog

   Brigitte Hoogendoorn



This study increases our understanding of the prevalence of

social entrepreneurial activity at the country level and our

comprehension of factors explaining the variation in the rate of

social entrepreneurship. We introduce two measures of social

entrepreneurship – “social business entrepreneurs” and “social

initiators” – and link these measures to three fields of

explanations: aggregate level conditions of entrepreneurship in

general, aggregate individual characteristics and opportunities

for social entrepreneurs. This study reveals that: (1) social

entrepreneurship is indeed a phenomenon different from commercial

entrepreneurship, (2) that the degree of postmaterialism in a

society is a factor with significant explanatory value for the

prevalence of social entrepreneurship, and (3) that opportunities

for social entrepreneurs are in particular created when social

initiators are part of the safety net of the welfare regime.



Date:     2010-11-25

URL:      http://d.repec.org/n?u=RePEc:eim:papers:h201022&r=cse





        12. The International Circulation of Elites: Knowledge,

  Entrepreneurialand Political



   Andrés Solimano

   Diego Avanzini



International migration analysis often focuses on mass migration

rather than on the international mobility of elites, which is the

focus of this paper. The paper offers a three-fold classification

of elites: (a) knowledge elites, (b) entrepreneurial elites and (

c) political elites. We explore the concept of elites and their

main motivation to move across nations and review indirect

empirical evidence relevant to this type of mobility,

highlighting some channels through which elites can affect

international development.



Keywords: international migration, entrepreneurial, political

         migrants, talent mobility

Date:     2010

URL:      http://d.repec.org/n?u=RePEc:unu:wpaper:wp2010-113&r=cse





        13. University Development Through Regional Strategic Alliances



   Popy Rufaidah (Department of Management and Business,

     Faculty of Economy, Padjadjaran University)

   Dwi Kartini (Department of Management and Business, Faculty

     of Economy, Padjadjaran University)

   Faisal Afiff (Department of Management and Business, Faculty

     of Economy, Padjadjaran University)



This paper is to submit a model of university development

through strategic alliances among universities in three regions,

namely Vietcalom, Indotim, and Philiplands. In order to implement

the strategic alliances as mentioned above, it needs a region as

a center of the strategic alliances, namely European Union

countries. The central region is hosted by Belgium as a hub which

has a role to manage the relevant alliance among regions and to

share its funding. For instance, the VLIR (Vlaamse

Interuniversitaire Raad) and / or the CIUF (Cooperation

Interuniversitaire Francophone) in Belgium are the organizations

that have role as above mentioned. Belgium is selected as it is a

founding member of the European Union and hosts its headquarters

in Brussels which is the heart of the Europe Union countries. The

paper develops a model in optimizing the potentiality in building

the alliances among universities located in those regions. A

literature review was carried out on strategic alliances and

supporting factors. The paper discusses a conceptualization that

allowing common theme which to be identified to implement the

model. The paper argues that there is a lack of integrative

frameworks for the alliances among the three regions particularly

in optimizing the potentiality of the programs.



Keywords: university development

JEL:      G0

Date:     2010-02

URL:      http://d.repec.org/n?u=RePEc:unp:wpaman:201014&r=cse





        14. Too Big to Innovate? Scale (dis)economies and the

  Competition-Innovation Relationship in U.S. Banking



   Bos Jaap

   Lamoen Ryan van

   Economidou Claire (METEOR)



This paper examines whether large U.S. banks have become ''too

big to innovate''. We extend the theoretical work of Aghion et al.

(2005b) by relaxing their assumption that unit costs are

independent from output levels in order to investigate the effect

of scale (dis)economies on the competition-innovation nexus. With

our model we can derive conditions under which the innovation

behavior of firms with scale diseconomies becomes more or less

responsive to competitive changes. Our empirical results show

that decreases in thelevel of competition lead to very large

drops in innovation. Large banks, already operating beyond the

minimum efficient scale, have indeed become ''too big to

innovate''.



Keywords: Industrial Organization;

Date:     2010

URL:      http://d.repec.org/n?u=RePEc:dgr:umamet:2010054&r=cse





        15. Competition within firms



   Lisa Bruttel

   Simeon Schudy



We investigate the role of incentives set by a parent firm for

competition among its subsidiaries. In a Cournot experiment four

subsidiaries of the same parent operate in the same market.

Parents earn a speciffic share of the joint profit and can choose

how to distribute the remaining surplus (or loss). Results show

that parents allocating profits equally among their subsidiaries

reach outcomes close to collusion. However, almost half of the

parent firms employ a proportional sharing rule instead. These

groups end up with profits around the Cournot level.



Keywords: Cournot Competition, Subsidiary, Subcompany, Experiment

Date:     2010

URL:      http://d.repec.org/n?u=RePEc:twi:respas:0062&r=cse





        16. Does Schumpeterian Creative Destruction Lead to Higher

  Productivity? The effects of firms’ entry



   Carlos Carreira (GEMF/Faculdade de Economia, Universidade de

     Coimbra, Portugal)

   Paulino Teixeira (GEMF/Faculdade de Economia, Universidade

     de Coimbra, Portugal)



This paper discusses the impact of newly created firms on

industry productivity growth. Our central hypothesis is that

there are two potential effects of new firms on productivity

growth: a direct effect, as entrants may be relatively more

productive than established firms; and an indirect effect,

through increased competitive pressure that stimulates incumbents

to elevate their productivity in order to survive. The results of

the decomposition exercise of aggregate productivity growth

suggest that the direct contribution of entry is small. In turn,

the regression analysis on the effect of entry on productivity

growth of incumbents indicates that the higher is the former, the

higher is the latter, which is equivalent to say that the greater

is the competitive pressure generated by new entrants, the higher

is the expected aggregate productivity level.



Keywords: Entry, Firm dynamics, Productivity growth, Competition

         effect

JEL:      L11

Date:     2010-09

URL:      http://d.repec.org/n?u=RePEc:gmf:wpaper:2010-20&r=cse





        17. SMEs; Virtual research and development (R&D) teams and new

  product development: A literature review



   Ale Ebrahim, Nader

   Ahmed, Shamsuddin

   Taha, Zahari



Small and medium-sized enterprises (SMEs) are indeed the engines

of global economic growth. Their continued growth is a major

subject for the economy and employment of any country. Towards

that end, virtual research and development (R&D) could be a

viable option to sustain and ease the operations of SMEs. However,

literature shows there has not been a great deal of research

into the diverse characteristic of virtual R&D teams in SMEs.

This article provides a comprehensive literature review on

different aspects of virtual R&D teams collected from the reputed

publications. The purpose of the literature review is to provide

an outline on the structure and dynamics of R&D collaboration in

SMEs. Specifying the rationale and relevance of virtual teams,

the relationship between virtual R&D team for SMEs and new

product development (NPD) has been examined. It concludes with

identifying the gaps and feebleness in the existing literature

and calls for future research in this area. It is argued to form

of virtual R&D team deserves consideration at top level

management for venturing into the new product development within

SMEs.



Keywords: Virtual teams; small and medium enterprises; new

         product development; R&D

JEL:      M5

Date:     2010-05-20

URL:      http://d.repec.org/n?u=RePEc:pra:mprapa:26989&r=cse





        18. Estratégia de localização bancária: teoria e evidência

  empírica aplicada ao estado de Minas Gerais



   Guilherme Jonas Costa da Silva (UFU)

   Frederico G. Jayme Jr (Cedeplar-UFMG)



The paper tried to contribute to the theory of the location of

the bank services. At first, there was strong evidence showing

that the bank location not only depended on economical factors.

The developed model and the results found in the spatial

econometrics analysis demonstrated that there is in fact certain

spatial dependence in the location strategy of the banks, besides,

that the distribution pattern of the agencies in the state of

Minas Gerais is being explained through macroeconomics, political

and prescriptive factors as well.



Keywords: Banks; Location Strategy; Spatial Econometrics; Minas

         Gerais

JEL:      C21

Date:     2010-11

URL:      http://d.repec.org/n?u=RePEc:cdp:texdis:td410&r=cse





        19. Strengthening Entrepreneurial Global Competitiveness by

  Utilizing Local Culture



   Erman A Sumirat (Research Division, Laboratory of Management

     FE UNPAD)

   Sunu Widianto (Research Division, Laboratory of Management

     FE UNPAD)



In the dynamic world where entrepreneurs compete internationally

due to globalization, business decisions are very hard to execute

for local entrepreneurs especially when determining sales price

for the products. In Indonesia, Asean China Free Trade Agreement (

ACFTA), the free trade agreement between Asean countries and

China also carries some difficulties to local entrepreneurs

especially in small and medium enterprises (SME) as local SMEs

still have lack of competitiveness compare with that of Chinese

products. Hence, most of the customers have shifted their

preferences to Chinese products simply because of its lower price.

This phenomenon has impacted local entrepreneurs negatively in

terms of competitiveness and losing customer loyalty. To

strengthen local entrepreneurs’ competitiveness, one of the

alternatives are promoting and implementing creative economy

which more utilized cultural aspects which bring clear

positioning to the local products. This study examines why

creative industries as proposed by UNCTAD Framework (2008) is

relevant to be implemented in Indonesia. Besides providing

literature studies about creative economy, this study is also

presenting the case study of how entrepreneurs who exploit local

culture can have significant benefits especially in fashion, art

and musical businesses. Bandung, the capitol of West Java as one

of major cities in Indonesia is selected as Bandung has been

appointed as a creative city pilot project by British Council (

2007) as many Indonesian creative entrepreneurs are coming from

Bandung. Therefore, the concept of creative industries and

creative economy should be transferred and promoted to local

entrepreneurs in order to enhance global competitiveness Four

Actors-Four Elements model is developed in this study as a

framework to successfully implement creative economy to the

locals. Four Actors means the involvement of government as a

regulator; communities as participants and customers; companies

including corporate social responsibility and community

development programs as well as creditors or investors through

venture capital for micro finance and SME. Also the model has

covered four core elements: firstly, culture which must be

properly exploited to make an uniqueness in producing goods and

services including giving transfer of knowledge to customers;

secondly, place where should be set up strategically to attract

customers to come; thirdly, economy factor like customers’ buying

power and consumer behavior which creates demand as well as

entrepreneurs capacity that develops supply; lastly, branding

promotion are also important so customers have brand awareness

regarding the local products/services. The introduction of four

actors-four core elements model is expected to make creative

economy works successfully in Indonesia. In the long run, it will

strengthen global competitiveness by utilizing local culture and

it will make a readiness in head to head competition with Chinese

products.



Keywords: creative industry, SME, competitiveness, local

         entrepreneurs

JEL:      G0

Date:     2010-06

URL:      http://d.repec.org/n?u=RePEc:unp:wpaman:201006&r=cse





       

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