Title: The Java automotive industry: between Keiretsu and Learning Region

Authors: Dessy Irawati; Roel Rutten

Addresses: Newcastle University Business School, 5 Barrack Road, Newcastle upon Tyne, NE1 4SE, UK. ' Department of Organization Studies, Tilburg University, PO Box 90153, 5000 LE Tilburg, The Netherlands

Abstract: This paper discusses two models for economic development of the automotive industry in the Indonesian Jabotabek region. The Keiretsu model combines access to Japanese knowledge with dependence on Japanese MNEs. To become less vulnerable in the global economy, the region needs to develop a capacity for indigenous growth based on interactive learning between regional firms. This corresponds to the Learning Region model. However, the hierarchical nature of the Keiretsu networks and the dependence of Indonesian firms on Japanese MNEs challenge the feasibility of this strategy. The paper thus raises the questions of the applicability of the Learning Region for developing economies.

Keywords: Keiretsu; learning regions; regional development; economic development; automomobile industry; automotive innovation; Indonesia; indigenous growth; interactive learning; Japan; MNEs; multinational enterprises.

DOI: 10.1504/JGBA.2011.043280

Journal for Global Business Advancement, 2011 Vol.4 No.3, pp.208 - 223

Received: 20 Nov 2010
Accepted: 12 Oct 2011
Published online: 23 Oct 2011 *

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