Technological learning in Indonesia's auto parts SMEs

Small Medium Enterprises (SMEs) represent 99.99% of Indonesian firms. Based on data, auto parts industry showed uptrend both in sales and auto parts export. However there are SMEs that has inability to take the challenge mainly due to the technological capability problem. Technological learning is the process of building and accumulating technological capability. This study attempts to analyze the process of technological learning in SMEs, focusing in Indonesian auto parts industry. It was carried out an in-depth analysis by case study in two-innovative SMEs, PT. Nandya Karya Perkasa (NKP) and PT. Karya Paduyasa (KP), which successfully developed their own technological capabilities showed that there is technological learning inside the company.proceedings. Based on Kim's Integrative Model, this study found that the technological learning process of these companies is determined by technological learning variables in Integrative Model, except externally evoked crises and proactive constructed crises. The possible variables in that activity are also considered as market and owner's tacit knowledge. Market will affect learning orientation and owner's tacit knowledge will be the main factor of absorptive capacity. This study suggests that government should make policy to push relationship between large firm and SMEs in auto parts industry; create policy to improve linkage between public research and university; and also develop auto parts industrial cluster to create social capital.