Modes of Acquiring Innovation in Smes in the Creative Industry Sector in East Kalimantan

Abstract

Small and Medium Enterprises (UKM) creative industry sector in East Kalimantan has the potential to be a source of longterm competitive advantage in the industrial era which has shifted from a natural resource base to a knowledge base. However, SMEs in the creative industry sector and SMEs in general have limited resources and economic scale efficiency for innovation activities. There are four strategy modes for obtaining innovation for SMEs in the creative industry sector in East Kalimantan to be competitive in local, regional and international markets, namely through marketbased and nonmarket innovation acquisition strategy modes. The strategy for obtaining marketbased SME innovation is through: 1) internal development, and 2) innovation acquisition. Internal development, namely innovation activities within the SME organization because innovation is valuable, a source of competitive advantage, while the SME's internal resources support it. The innovation acquisition strategy can be carried out by SMEs because internal organizational resources are limited, but entrepreneurs in SMEs need to capture market opportunities in the short term. The capacity of SMEs is often limited to carry out innovation activities, so SMEs can adopt nonmarket based innovation strategies, such as through: 3) vertical and horizontal alliances, 4) partnerships. SMEs can collaborate with other SMEs, suppliers, buyers and other stakeholders to overcome resource limitations and increase the efficiency of economies of scale in carrying out innovation activities.