Innovation Capacity and Entrepreneurial Orientation : Case Studies of Vegetable Farm Firms in West Java, Indonesia

Abstract

Emerging domestic and international markets for vegetable products in Indonesia provide opportunities for farmers to move from cultivating traditional products to produce high added-value products. Our study aims to investigate how entrepreneurial orientation affects the innovation capacity of farm firms. We have distinguished innovation capacity in terms of innovation adoption and innovation generation that are related to dimensions of entrepreneurial orientation, i.e. risk taking and proactiveness. In this explorative study two case studies on small farm firms in West Java, Indonesia are presented to develop a number of propositions on the effect of entrepreneurial orientation on the innovation capacity. The result shows that risk taking and proactiveness affect innovation adoption for both product and process innovation. However, only risk taking dimension affects innovation generation particularly on process innovation to solve their problem on reducing production cost.