Competition and Knowledge in Javanese Rural Business

The paper focuses on information flows and the need for change in cottage industries in rural Indonesia. The context for small-scale business entrepreneurs has changed dramatically during the last decade of economic liberalisation and crisis. Emerging market opportunities, as well as national and international competition, now challenge indigenous businesses in their different geographical settings, and new information is indispensable for survival and growth. The principal question in the paper is whether small-scale agribusiness entrepreneurs are able to identify and utilise existing knowledge for the purpose of improving their competitive strength. By using case studies taking an actor's perspective, the empirical data give insight into the small entrepreneurs' perceptions of their business environments and the hindrances to innovation. Theories on dual economies, path dependence and information asymmetry form the basis for analysing two cases of Javanese agribusiness. The paper concludes that a gap prevails between "traditional" and "modern" sectors of this society, and that cottage industries have much to gain from linking up with external agencies. Regional universities may play a crucial role in enhancing information flows and disseminating competence.