View article

For decades cluster approach has been an insightful notion of development which has drawn much attention across disciplines. Its theoretical developments and empirical practices never end with satisfying results and consensus (Cumbers & MacKinnon, 2004). No matter how clusters emerge, either in developed or developing countries, urban or rural regions, high technology or labour intensive industries, large or small firms, global or local scales, it has always existed over time and is highly associated with localities, just as what is happening in Indonesia. The cluster approach has re-emerged in recent Indonesian public policy making and sparked the interest of various government agencies. Despite government recognition, it has in fact been implemented ubiquitously and cluster phenomena can be found in many local regions of Indonesia. Regarding such particularities, the common grounds to understand the cluster phenomena are supposed to be placed on localities.

The prolonged government ignorance over the role of local institutions is the central issue in this research. Repetitive action with less understanding of the local institutional setting has been the source of problems in recent cluster policy making. Instead of learning from policy failures in the past and finding alternative ways, the government seems to continue with its one-size-fits-all paradigm in promoting cluster policies. With regard to such policy inadequacy, this research was designed to explore the needs for cluster enhancement stemming from the conditions of prevailing local institutions. This research aims to figure out the influences of the prevailing local institutions on …