The Rubber Industry of Indonesia: Strategy for Competitiveness and Sustainability

Abstract

The paper presents a systematic review of the latest developments in the natural rubber industry and describes the major predictors for the sustainability of Indonesia’s competitive advantage in this sector. In-depth interviews with experts were conducted to gather data from the private and public industries, International Trade Statistic, and Statistics Indonesia. The data were analyzed using the Diamond Model, which is widely used as the framework of a country’s competitive advantage. The data is processed to find the RCA value and mapping the factors affecting the competitive advantages of ITRC countries. In the face of falling rubber prices, the Indonesia rubber industry's recent management strategy is to increase competitiveness sustainably by increasing productivity in the upstream industry and efficiency in the downstream industry. To boost competitiveness even further, a more concentrated endeavor to stimulate innovation and technology adoption by farmers and businesses is required. The study offers a comprehensive examination of Indonesia as a country with major agricultural export industries. It methodically investigates the strategies that must be implemented to sustain the rubber industry in Indonesia.

Keywords: competitiveness, industry, natural rubber, revealed competitive advantage, sustainability

DOI: 10.7176/EJBM/14-3-06

Publication date: February 28^th 2022