The studies of innovation intermediaries in rural areas are under-researched. In 2013, the government of Kulon Progo regency has initiated an innovative movement called Bela-Beli Kulon Progo or Support and Buy Local Products in Kulon Progo. This study investigates the role, capabilities and impact of the engagement of local community associations as intermediaries in different sectors such as agriculture, food processing, and local textile heritage (batik). By employing multiple case study method, the interviews have indicated that intermediaries in different sectors play different roles due to their different strength of social capital and challenges. This study also describes the impact of the engagement of the intermediaries in increasing well-being, trust among stakeholders and local people capability to innovate. Further, the study draws policy implications for the governments to increase the capabilities and impact of the intermediaries. Key words: role and capabilities of intermediary actor, support and buy local products, rural-based innovation policy.

1. The Role of Local Community Associations as
Intermediaries: A Multiple Case Study on
Rural-Based Innovation Policy Implementation
Pratiwi
Two-year Master’s Program of Public Policy (MP2)
National Graduate Institute of Policy Studies (GRIPS)
Advisor: Prof. Patarapong Intarakumnerd, Ph. D
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2. 1. Introduction
2. Research Questions
3. Locus
4. Research Framework
5. Research Method
6. Findings
7. Conclusion
8. Policy Implications
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Contents

3. 3
Rural challenges : Low absorptive capacity, weak
infrastructure, and shrinking population due to
urbanization.
Type of innovation: Incremental, process, depends
on external resources
Key success factors: Broad network and strong
partnership. The role of intermediary actor is
crucial to connect the network. However, rural
areas are under-researched.
Introduction

4. 4
 What are the roles of local community association
as intermediaries in the Support and Buy Local
Product policy?
 How do the intermediaries develop the
capabilities needed to develop local enterprises?
 What are the impact of the partnership for the
stakeholders and the policy implications can be
derived?
Research Questions

5. 5
 Innovation policy in Indonesia is weak and fragmented
with low absorptive capacity, and weak relationship.
 Kulon Progo Regency has initiated innovation policy
measures in rural areas.
Locus

6. 6
Research Framework
Local
Community
Associations
Farmers
Local Micro and
Small Enterprises
Village Community
Government
PRIs and
Universities
Market
Process and
incremental
innovation
Capabilities: networking,
coordination, knowledge
building, management
Resource
provider
Consultant
Broker
Mediator
Before: low
employability
, social
exclusion,
less resilience
village
After:
Increase
employability
, social
inclusion,
village
resilience

7. 7
Research Method
Batik entrepreneur, Department of
Cooperative and MSME, Department
of Trade, Department of Tourism,
Department of Environment, Bureau
of Planning and Development, High
school
Batik Association
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Bureau of Service, Locating, and
Protection of Indonesian Workers
Abroad (BP3TKI), Department of
Cooperative and MSME,
Department of Trade. Farmers,
exporter, universities,
Palm Sugar
Joint Business Group
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Rice buyer (local cooperative),
farmers Department of Food and
Agriculture; Agency for Agricultural
Technology Research, Ministry of
Agriculture
Organic Farmer Group
4
Total Interviews: 22
Tourism Related
Food processing related
Agriculture Related

8. 8
Batik
Enterprises
Association
Batik-
makers
Local Micro and
Small Enterprises
Designers Market: Schools
and public
organizations
New design
(easier to
make), new
marketing
method.
Incremental.
Capabilities: networking,
coordination,
knowledge building,
management
Resource
provider
Consultant
Broker
Mediator
Before: Low
product
marketability, lack
of local people
participation in
the business, non-
standardized
product quality.
After:
Increased
number of
business and
increased
sales
turnover, IPR.
Findings: Roles of Batik Association
Department of
Trade
Department of
C&MSMEs
Department of
Environmental
Protection

9. 9
Palm Sugar
JBG
Farmers
Local Micro and
Small Enterprises
Private exporting
Agency
Better quality
product, less
water, longer
expiration
date.
Incremental.
Capabilities: networking,
coordination, knowledge
building, management
Resource
provider
Consultant
Broker
Mediator
Before: limited
product
marketability and
value added, non-
standardized
product quality.
After: Increased
number of
farmers, product
quality, export
value and social
inclusion,
international
certifications
Findings: Role of Palm Sugar JBG
Department of
Trade
Department of
Agriculture and
the Ministry
Universities
Research institutes
(Climate change)
BP3TKI
Department of
C&MSMEs

10. 10
A1 Farmers
Group
Farmers
Local cooperatives as
market pool
Pest-reliance
product.
incremental
innovation.
Capabilities: networking,
coordination,
knowledge building,
management
Resource
provider
Consultant
Broker
Mediator
Before: Limited
infrastructure,
conventional, Lack
of good qualities
locally breed rice.
After: Increased
sales turnover,
more
environmentally
friendly farming
Findings: Role of A1 Farmers Group
PRI of Ministry
of Agriculture
Department of
Agriculture

11. 11
Conclusion
Tourism
Status Roles Capabilities Innovation Output
Government
initiated
Consultant,
mediator.
Networking, coordination,
knowledge building.
New design, new
marketing method.
Incremental.
Increased number of
business, sales turnover,
IPR, vacuum in
activities.
Food processing
Self-motivated Resource provider,
consultant.
Networking, Management. Better quality product,
longer expiration date.
Incremental.
Increased social and
economic well-being of
farmers, international
certifications.
Agriculture
Self-motivated Resource provider,
broker.
Networking, coordination. Pest-reliance local
plasma. Incremental.
Increased sales
turnover, more
environmentally
friendly farming

12. 12
 Government should think carefully before choosing an
intermediary as self-motivated and embedded
intermediary is more emerging in activities.
 Government should facilitate the intermediary to keep
them emerged and collaborated by:
 Providing financial incentive that requires collaboration,
social and economic output.
 Providing regulatory framework that promotes IPR and
market expansion such as self-procurement.
 Connecting with PRIs and Universities to strengthen
knowledge transfer to expand to larger market.
Policy Implications

13. Thank you very much!
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