MSEs – Large Industry Partnerships Based on Technology Innovation in Indonesia

This study focuses on technological partnerships between Micro and Small Enterprises (MSEs) and large industry. It is argued that such technological partnerships can be beneficial for both types of partnership, but MSEs often are confronted by the risks of partnerships as these relationships are non-symmetric. Because of this, the strategic, internal capabilities and external capabilities of MSEs can flow unintentionally to the larger firms. If this occurs, the partnerships would be less successful from the MSEs point of view. This paper examines to what extent the size of MSEs, gender of MSEs owner, education of MSEs owner, the number of employees, and type of large industry of MSEs is related with technological partnerships. The data were taken from an annual survey of micro and small scale industry conducted by the Indonesian Central Board of Statistics (Badan Pusat Statistik BPS). A sample of 5,397 MSEs, that is, the partner with large industry was interviewed by means of a structured questionnaire. Binary logistic regression analysis was conducted to determine the relationship between independent variables and technological partnerships. The result of the research showed that gender of MSEs owner, the number of employees, and type of MSEs partner are correlated with technological partnerships. The conclusion of this study is the opportunities for large industries to provide technological partnerships is higher compared to other institutions such as cooperatives, banks, non-governmental organizations. Likewise, MSEs with a small number of employees has a higher chance of getting a technological partnerships. Female entrepreneurs have a higher chance of getting technological partnerships compared with the