Indonesia's small and
            medium-size exporters and their support systems
The authors survey a sample of 91 small
            or medium-size exporters of garments, rattan furniture, the
            two are reasonably equally mixed. About 75 percent of the
            entrepreneures in garments and rattan furniture, and carved
            wooden furniture (Jepara), and interview people in public
            and nonprofit agencies active about issues affecting small
            and medium-size enterprises (SMEs). Indonesia's garment
            industry is dominated by entrepreneurs of Chinese descent
            and the Jepara industry by pribumi (Indonesian Malays); in
            rattan furniture, the two are reasonably equally mixed.
            About 75 percent of the entrepreneures in garments and
            rattan furniture have some university education; less than
            half of those in the more traditional, skill-based Jepara
            industry do. In most of the firms, international marketing
            was handled exclusively through private channels, that is
            also how most firms acquired technological capability. But
            such channels appeared to be more readily accessible by
            larger firms, by educated entrepreneurs, and by non-pribumi
            who could take advantage of the extended-family network that
            connects ethnic Chinese in the region. Relying exclusively
            on private channels means running the risk that
            participation in export markets will be limited to a
            relatively narrow base of entrepreneurs. Pribumi and smaller
            firms relied heavily on collective marketing support
            provided with a "light touch" - for example,
            support for participation in trade fairs. The Ministry of
            Trade's international network of offices geared to
            providing information and facilitating transactions was of
            little use to the firms surveyed. Collective technology
            support also appeared to be somewhat more important for
            smaller, pribumi firms, although its impact was modest.
            Employing expatriates was a powerful mechanism for acquiring
            technological capability, especially in the rattan and
            garment sectors, although it was concentrated
            disproportionately among the non-pribumi entrepreneurs.
            Indonesia's collective institutions suffer from
            pervasive organizational weaknesses that limit their ability
            to help broaden the base of private entrepreneurship in
            small and medium-size firms. Public institutions generally
            lack the commitment, resources, and flexibility needed to
            provide quality support to SMEs, and the industry
            association often lack the professionalism and
            accountability needed to gain SMEs' confidence. But
            public support can be useful when it involves relatively
            simple services, such as support to organize local fairs, to
            facilitate participation in fairs abroad, or to use foreign
            private consultants.