Sustainability of Selected Agricultural and Industrial Clusters in Central Java

Abstract

Central Java has been developing with the support of the largest number of rural based agricultural
and industrial clusters that share the significant of employment rate. Located between two big
Provinces namely West Java and East Java those are more favorable at least in terms of location
for investors to establish large urban based industries, Central Java economic structure is mostly
supported by local based activities located in rural areas. However, this situation has created
particular limitations for the province to accelerate its development as mainly by considering the
number of the employment, the province’s contribution to non-primary GDP is relatively low. It
indicates low productivity that most of the time happens in a region with significant contribution
of small-medium enterprises instead of large enterprises that are generally characterized as more
efficient (Handayani, 2011). This paper aims to further analyse the sustainability of selected rural
based agricultural and industrial clusters in Central Java focusing on the examination of the
capability of the employment/local people mainly to create competitive and innovative products.
Accordingly, descriptive analysis in combination with scoring method was generally applied in
the analysis stage. As a result, it is generally indicated that there are still great challenges for the
clusters for significantly improve their competitiveness. The sustainability is there but, mainly
with the status quo scenario, significant improvement will only take place gradually. Human
resources development and aspect of governance (i.e. stakeholders’ cooperation/ collaboration)
appear as critical factors to be further enhanced.