Formulating a Collaborative Strategy to Develop Innovation in the Palm Oil Industry

Abstract

Indonesia is the biggest producer of palm oil in the world with 31.5 million tons in 2014 and had export value almost 21 million USD. On the other hand, the economic value of Indonesian palm oil is lower than Malaysia. It happened because innovation in the palm oil Industry is less developed. However, the development of innovation in palm oil industry is not only increasing the economic value but also creating new jobs for Indonesian. But, many problems happen in the developing process, one of them is the lack of collaboration among stakeholders. Therefore, the aim of the study is formulating a strategy to develop innovation in the palm oil industry and a collaboration strategy among stakeholders to accelerate the development process. The research is using a case study strategy, with an inductive approach and interpretive philosophy. Data collection is using interviews with an expert from Industry, a researcher from University, and a researcher from research institution, a government officer from Ministry of Industry and an executive director of Indonesian Palm Oil Association. The data is analyzed by a triangulation method. The result showed that the availability of the market becomes the main factor for an enterprise to develop innovation. Moreover, before conducting research, the industry categorizes their problems into four sections urgent-direct, urgent-indirect, less urgent-direct, and less urgent-indirect. Based on that, they can prepare a short-term and a long-term strategy. The strategy to develop innovation is different between upstream and downstream industry, because the development of innovation in downstream industry is more complex rather than the upstream industry. Furthermore, the government can help the industry to accelerate the development process by providing more incentive both for industry and research institution. For the industry, the incentive is in form of tax reduction and for research institutions and university is in term of more budget to buy equipment, laboratory instrument and machinery.