Knowledge sharing in small
and medium enterprises
a case study of creative clothing industry in
West Java, Indonesia
Abstract
When knowledge becomes the
substantial capital of organisation,
the process of sharing knowledge
within and outside the organisa-
tion becomes an important point to
develop the organisation. Related
with knowledge-based economy,
the concept of knowledge hub
as the meeting point to generate,
transfer and share knowledge is
proven by several cases in the
world (Silicon Valley, Aston Science
Park, Bangalore, ABC Cluster
Germany, Munich-high tech zone,
etc.). In the case of small and me-
dium enterprises (SMEs), it had
not been researched yet about
how the knowledge hub should
support the process of knowledge
sharing, and also how is the exist-
ing process knowledge sharing in
the SMEs. This research aims to
explore the pattern of knowledge
sharing in SMEs, especially the
one that incorporated in a knowl-
edge hub, using the Triple Helix
model. The research provided the
empirical findings from the case
of creative clothing industry in
Bandung, West Java, Indonesia.
The research clarified the norma-
tive aspect of knowledge sharing
process in the industry and also
discovered the existing condition
so that the researcher can suggest
some prescriptive points to develop
knowledge sharing process in the
creative clothing industry. The re-
sult will became a useful foundation
for the future research of knowledge
sharing process in other type of
SMEs. The research also provided
empirical result from creative cloth-
ing industry in Bandung, West Java,
Indonesia, that can be used to im-
prove the knowledge sharing proc-
ess in the industry thus to increase
the level of competitiveness among
business entities in Indonesia.
Bandung,
Jann H. Tjakraatmadja, Lenny Martini and
Yudo Anggoro
School of Business and Management, Institute Technology of Bandung (ITB),
Ganesha 10th Street, Bandung, 40132, West Java, Indonesia
Tel: +62-22-2531923; Fax: +62-22-2504249; E-mails: jannhidajat@sbm-itb.ac.id,
lenny.martini@sbm-itb.ac.id, yudo.anggoro@sbm-itb.ac.id
Introduction becomes very important to contribute
it competitive advantage. On the other
Researchers worldwide are increasingly
hand, in Triple Helix model, Leydesdorff
showing evidence of the importance of
and Etzkowitz (1995) explained about
knowledge as a substantial capital of
three actors (academician, business
an organisation (Drucker, 1994; Evers,
and government) as the main institu-
2003; Tjakraatmadja, 2006). In country
tion in knowledge-based economy. The
level, knowledge is also recognised by
research proposed that to establish a
economists as the most important fac-
small or medium industry as a knowl-
tor of production in a ‘new economy’
edge hub it will need the contribution
(Menkhoff et al., 2011). In the knowl-
from the other two actors (academi-
edge-based economy, the competitive
cian and government). It explained the
advantage of a country which explained
role of each actor in the development
by Porter (1990) consist of four elements
of knowledge hub. The research also
(factor conditions; demand conditions;
explored the knowledge sharing proc-
related and supporting industries; firm
ess which is an important process within
strategy, structure and rivalry) related to
a knowledge hub, using case study from
the access and utilisation of knowledge
creative clothing industry in Bandung,
by each actor of country development.
West Java, Indonesia. It revealed the
Several examples had shown the impor-
existing condition of the knowledge
tance of knowledge clusters, knowledge
sharing process in the industry, define
hub and knowledge architecture in the
the normative way and propose some
knowledge-based economy era (Silicon
suggestion to develop the process.
Valley, Aston Science Park, Bangalore,
ABC Cluster Germany, Munich-high
tech zone, etc.). Researchers refer it to Knowledge-based economy
geographical groupings of firms, both An economy becomes a ‘knowledge
large and small but often small and economy’ when the sustained use and
medium industries (Henry and Pinch, creation of knowledge are at the centre
2006). In the case of SMEs, they are of its economic development process
assumed to play a key role in social and (Chen, 2011). Knowledge-based econ-
economic development, expressed in omy uses knowledge as the key engine
terms of job creation, income generation of economic growth. It is an economy in
and imposed balance of trade (Zonooz which knowledge is acquired, created,
et al., 2011). The function of SMEs in disseminated, and used effectively to
a country as a knowledge hub thus enhance economic development. The
Tech Monitor • Jul-Aug 2011  29
Knowledge sharing in small and medium enterprises
World Bank had constituted the four pil-
lars of knowledge economy framework:
• An economic incentive and institu-
tional regime, which provides good
economic policies and institutions,
promote efficient allocation of re-
sources and stimulate creativity and
incentives for the efficient creation,
dissemination, and use of existing
knowledge.
• An educated and skilled labour force
that continuously upgrades and
adapts skills to efficiently create and
use knowledge.
• An effective innovation system con-
sisting of firms, research centres,
universities, consultants, and other
organisations that keeps up with the
knowledge revolution, taps into the
growing stock of global knowledge
and assimilates and adapts new
knowledge to local needs.
• A modern, adequate and accessible
information infrastructure that facili-
tates the effective communication,
dissemination and processing of
information and knowledge.
The framework thus asserts that
investments and interactions among
these four pillars are necessary for the
sustained creation, adoption, adapta-
tion and use of knowledge in domestic
Knowledge
Knowledge
Infrastructure
Geography
Fig. 1.  Triple Helix model
30   Tech Monitor • Jul-Aug 2011
economic production. The result will be
competitively higher value-added goods
and service, which increase the prob-
ability of economic success in the cur-
rent highly competitive and globalised
world economy.
Knowledge hub and
knowledge sharing
Knowledge hub as stated by Evers
(2008) is:
‘Local innovation systems that are nodes
in networks of knowledge production and
knowledge sharing. They are character-
ised by high connectedness and high
internal and external networking and
knowledge sharing capabilities. As meet-
ing points of communities of knowledge
and interest, knowledge hub fulfills three
major functions: to generate knowledge,
to transfer knowledge to sites of applica-
tion; and to transmit knowledge to other
people through education and training.’
The knowledge sharing process will
be effective if it is supported by A-B-G
collaboration which would include pro-
viding the domain, policies, rules and
regulations for members of the organisa-
tion (Tjakraatmadja, et al., 2008). World
Bank (2003) defined sharing knowledge
as means to absorb knowledge from
research and experience systemati-
cally, manage and store knowledge and
information for easy access and transfer
Innovation
Economy
Political
Economy
or dissemination of knowledge, including
the transfer of two directions. Through
the process of sharing knowledge, the
organisation will realise what knowledge
do they have that can be used to create
new knowledge and innovate in order to
create a sustainable competitive advan-
tage (Desouza, 2003; Lin, 2006).
Triple Helix model
Due to knowledge-based economy com-
plexity and dynamic, Etzkowitz and Ley-
desdorff (2000) developed Triple Helix
model to explain and breakdown the
intricacy of the system. The Triple Helix
model introduced three dimensions of
social system which is geography, econ-
omy and knowledge.The product of inter-
action between these dimensions will
create knowledge infrastructure, political
economy and innovation (Figure 1).
In the Triple Helix model, the main
institution of the knowledge-based
economy is defined as academician/
university, industry and government
(Etzkowitz and Leydesdorff, 2000).
These institutions are laboratories of
innovation system which will interact
with each other by:
• Constraining each other’s behav-
iours. For example, university based
on its competency will aim to accom-
modate industry particular demand
for skilled and educated manpower
in certain subjects.
• Shaping each other’s expectation. For
example, university and industry ex-
pect government to formulate policy
that can catalyse collaboration and
innovation between institutions.
The interactions between acad-
emicians who develop knowledge, the
industry/business who run the economy
and the government who rule the geo-
graphical area will contribute to the
country’s competitive advantages in
knowledge-based economy.
Creative industry
The term creative industry is defined
as industry which focuses on the
­creation and exploitation of intellectual
­properties such as, art, movies, games,

fashion and advertisement (Sima-
tupang, 2007a, 2007b). UNESCO also
defines creative industry as production
and service activities which cover artis-
tic substantial element, architecture and
advertising. According to Jones (2006),
creative industry is activity which has
originality and has potential to create job
and welfare through intellectual prop-
erty exploitation. Department of Culture,
Media, and Sport of United Kingdom
classifies creative industry into 15 sec-
tors, which are advertising, architecture,
art and antiques, handicraft, fashion,
movie, software for interactive enter-
tainment, music, performance, printing
and publishing, software and computer
game, television and radio.
There are some basic differences
between creative industry and other
economic sectors. Florida (2004)
explains those differences as follow:
• Creative products have symbolic and
cultural values, which differentiate
them from other products.
• Creative industry produces high di-
versified products.
• Customers have their own standards
to determine the quality of creative
products. The quality of those prod-
ucts depends on the value of the
customers.
• Most creative products may last long
and reusable.
According to Jones (2006), creative
industry has both short-term and long-
term impacts. The short-term impacts
of creative industry mostly are related
to the opportunities to generate new
creative business training and also
the creation of new technology to sup-
port creative industry. In a long term,
creative industry is expected to reduce
unemployment in post-industrial area,
increase economic growth, and increase
people’s welfare. Creative industry is
also aimed to develop creative network
among people and involve women par-
ticipation as new entrepreneurs.
Several countries have put much
effort to put creative industry as a
new potential economic sector. As an
Knowledge sharing in small and medium enterprises
example, the British government has
just been focusing on creative industry
in the late 10 years. Since then, crea-
tive industry in the UK has become a
benchmark for other countries. The
British government has successfully
mapped potential creative industry
there, and launched creative economy
programme. As a result of this national
programme, several cities in the United
Kingdom such as Birmingham, Brighton
and Newcastle have abandoned their
dependency on industry-based econ-
omy and moved their economy towards
creative economy (Kamil, 2007).
In another example, Singapore has
made plan to create creative cluster to
support creative economy in the ­country.
Singapore Prime Minister, Lee Hsien
Loong, has launched three national
movements to support creative industry
in 2005. Those national movements are
Design Singapore, Media 21 and Ren-
naisance City 2.0 (Kamil, 2007).
Creative industry in
Indonesia
In Indonesia, creative industry is relatively
a new issue. The President of Indonesia,
Dr. Susilo Bambang ­Yudhoyono, has just
voiced his concern on the importance of
creative industry in 2009. His concern
on the rising role of creative industry on
economic growth was based on the fact
that creative industry combines idea, art,
culture and tourism to generate welfare
for people. These facts are similar to the
characteristics of Indonesia which have
rich culture and tradition.
Creative industry has actually started
to give significant contribution to Indone-
sian economy.There are some indicators
which support this argument. Indonesian
Ministry of Commerce, Dr. Marie Elka
Pangestu, stated that the growth of crea-
tive industry in 2006 has reached 7.28%
(which is higher than overall economic
growth of 5.14% in that year). In the same
year, creative industry has also contrib-
uted to, on average, 4.71% of Indonesian
GDP. This number is higher than the con-
tribution from electricity, gas and water
sector. In term of work force absorption,
Tech Monitor • Jul-Aug 2011  31
creative industry has employed 4.48 mil-
lions of workers, and this number related
to 4.71% of total workforce in Indonesia.
The productivity of those workers in 2006
reached to IDR 19.38 million per person.
The Department of Commerce of
Indonesia in 2007 has also conducted
study to map creative industry in Indo-
nesia. It classifies creative industry in
Indonesia into 14 sectors: advertising,
architecture, art market, craft, design
(graphic, interior, product, brand, logo,
packing), fashion, film and photography,
interactive game, music, performance
show, printing and publishing, computer
software, broadcasting, and research and
development (R&D). The top four sectors
of creative industry in Indonesia are fash-
ion, advertising, craft and architecture.
Creative industry in
­Bandung
The Indonesian government was also
looking for any possibilities to develop
creative industry in certain cities which
are considered as creative cities. One
of the leading creative cities in Indo-
nesia is Bandung, in West Java prov-
ince. Bandung is called as the leading
creative city in Indonesia because of
its characteristics. Most of the city’s
populations (around 60%) are people
below 40 years old, and another rea-
son is that because Bandung has many
universities. Young people and univer-
sities are believed as the generator of
creative industry. Based on its unique
characteristics and potentials, Bandung
is appointed by British Council as one
of creative cities in Asia Pacific in 2009.
From 14 sectors of creative industry,
the leading sector in Bandung is fashion
industry. Fashion industry is defined as
creative activities which are related to
the design of clothes, footwear, acces-
sories, fashion consultation and ­fashion
distribution. Fashion industry is the
­largest economic contributor among
other sectors of creative industry in
Indonesia. Department of Commerce
said that fashion industry contributes to
44.18% or around IDR 46 trillion of total
creative industry contribution in 2006.
Knowledge sharing in small and medium enterprises
KICK is the place for clothing
business owners to gather,
share their idea, knowledge
and problems with one main
purpose and to develop cloth-
ing business.
One important part of fashion industry
in Bandung is creative clothing industry
(Anggoro, 2009). What makes clothing
industry becomes special is the quantity
of its product. While most fashion indus-
try focuses to create mass production,
clothing industry offers limited quantity
of products. It offers only 50–100 items
in a single model of product. Its products
vary from clothes, shorts, sandals, bags,
shoes, etc. What the clothing industry
offers is exclusiveness.
The main advantage of clothing
industry’s products is the design of the
products. The design offers originality,
uniqueness, and has meaning. These
are creative works. Clothing industry
owners have their own original brands
and mostly sell their products in their
own shops, usually called distribution
outlets (distro). There are hundreds of
distros in Bandung which attract many
young people to be their customers.
Those distro owners are gathered in an
association for clothing business own-
ers, called KICK (Kreative Independ-
ent Clothing Kommunity). KICK is the
place for clothing business owners to
gather, share their idea, knowledge and
problems with one main purpose and to
develop clothing business.
KICK also serves as the formal rep-
resentation of clothing business own-
ers to collaborate with government
and other private institutions. One of
the missions of KICK is to educate its
members by actively holding series of
discussions, trainings and workshops.
Research design
This study aims to explore the pattern
of knowledge sharing in SMEs, espe-
cially the one that incorporated in a
knowledge hub, using the Triple Helix
model. Clothing industry in Bandung,
32   Tech Monitor • Jul-Aug 2011
West Java, Indonesia, is chosen as a
case study.
The aim of in-depth interview in this
study is to explore and identify ­problems
which occurred in creative clothing
industry; to understand current relation
and pattern among academicians, busi-
ness owners and government officials
and to discuss some possible solu-
tions which may be applied to solve the
­existing problems.
Literature review is useful to high-
light particular aspects of the research
problem most in need of further inves-
tigation. It is also necessary to define
and conceptualise variables and theo-
ries in this study. In this case, literature
review is used to define some concepts
of knowledge sharing, knowledge hub,
Triple Helix model and creative industry.
This study involves 20 people in the
in-depth interview process.They are cho-
sen because they are considered as key
actors in their area. Key actors are those
who have influence in their community,
they drive their idea to the people, and
get respect from their surroundings. All
of the interviews use open-ended ques-
tions to gather all possible information
from respondents. Respondents in in-
depth interview are as follows:
• Six academicians:They are research-
ers and university lecturers who
have interests in creative industry
in Bandung. Questions for academi-
cians are aimed to explore concepts
and theories of knowledge sharing,
knowledge hub, SMEs and creative
industry. Respondents are also asked
about the role of academician, busi-
ness sector and government to de-
velop clothing industry in Bandung.
• Eight businessmen: They are own-
ers of well-known clothing industries
in Bandung. Questions for business
owners are aimed to explore about
clothing business and all problems
occurred. Business owners are also
asked about the possible solutions
for problems and what is the role of
each actor to develop clothing in-
dustry. Business owners are asked
about the importance of knowledge
sharing in their business, and wheth-
er they already applied it or not.
• Six government officials: They are
heads of government institutions
which are related to creative industry
sectors. They are asked about their
role in making policy to develop cloth-
ing industry, their ­efforts to share their
policy to other actors and their opin-
ion on the importance of knowledge
sharing in creative ­industry.
All of interviews are recorded and
the results are transferred into several
interview transcripts. These transcripts
then are read thoroughly and are coded.
The aim of coding is to classify some
important words into several categories
which may answer research questions.
These classifications are important data
for further analysis.
Research findings and
analysis
As stated above, the research resulted
in gap analysis between the existing
condition of knowledge sharing in the
research object and the normative
concept of knowledge sharing in small
and medium industry. The findings are
resumed in Table 1.
These are the obstacles that hinder
the knowledge sharing process to run
smoothly between the three actors in
creative clothing industry:
• No integrated planning between the
three actors (A-B-G)
• Less motivation
• Less initiatives
• No clear definition of each actors’
role and function
• Budget is not on the target/does not
match the needs
On the basis of the findings, the
researcher then suggests a model to
minimise the gap of knowledge shar-
ing process and achieve the objective to
constitute the industry as a knowledge
hub. The model consists of three actors
related to their initiatives to share knowl-
edge drive by each actor’s interest. The
model is shown in Figure 2.
 Knowledge sharing in small and medium enterprises

The model indicates that the three Existing condition Subject Normative concept
actors, business, academician and gov-
• Only small aspect of Type of knowledge • Financial and
ernment, each has different interest that
marketing management shared accountancy
drives them to make initiatives to share • Marketing manage-
knowledge. On the basis of the interview ment
result, all parties agree that the existence • Small business man-
of key resource in each parties (creative agement
clothing expert in business, academician • Intellectual property
who has expertise in SME research, cer- right
tain division assigned in government to • Knowledge about
business entity right
regulate SMEs) having no guarantee at
and obligation
all that the knowledge sharing will exist.
The reality on the ground shows that the • KICK only utilised by Media and frequency • KICK (face-to-face
three actors often run their programme business practitioner dialogue or forum)
• Joint forum and creative city (once a month,
separately, thus make it ineffective to the
council only held once or regular)
other parties, and sometimes can cause twice and no future plan to • Joint forum A-B-G
failure in reaching the programme objec- do it again in the future (once a year, irregu-
tive. For example, the business practi- • Regular exhibition only lar, impulsive)
tioner has the event called KICKFEST, utilised by business prac- • Creative city council
which is a festival of all members of the titioner to sell ­product and (no formal forum yet)
association that gathered in a public by government to allocate • Exhibition from
place to exhibit their latest products and budget, but not as the business practitioner
media to share knowledge (once a year, regular)
to sell them to mass customers. This
• Conference held by acad- • Conference held by
event is seen by the government as emician rarely socialised to academician (once a
economic contribution for local trading government and business year, regular)
index, thus being planned in the annual practitioner
budget allocation. The government gives
some amount of money to the organising Table 1.  Knowledge sharing in SME: normative and descriptive
committee, expecting that the fund will
somehow support the event. But actually,
when it came to the need of the busi- Knowledge hub
ness practitioners, they need the money
to fund some other activities, such as
training of skill workers, short courses
Academician
or seminar in management and other
knowledge development agenda. The
government usually does not want to
know about this and insist that the budget
Initiatives
only goes to the festival.
Another example is on the confer-
st

Int
ere

ence of small and medium business that

ere
Int

st

annually held by academician that is not

well socialised to the business practition- Knowledge
ers and also government. Where actu- sharing in
ally this is a good event where business SME
es
Ini

tiv
tia

practice can share the reality in business

tia
tiv

and also share about ideal way to man-

Ini
es

age business. As for government, it can Interest

Government
Business
be the place where fact-finding process
can be done in the process of regula-
tion establishment. To solve the problem,
they cannot rely on each others’ agenda.
They should start with their own initia-
tives to share knowledge and invite the Fig. 2.  Knowledge sharing in a knowledge hub: a model for SMEs

Tech Monitor • Jul-Aug 2011  33

Knowledge sharing in small and medium enterprises

Triple Helix Knowledge sharing in knowledge hub

models
Initiatives
Academician • Design entrepreneurship-based curriculum
• Research about SME
• Transfer knowledge through education and training
• Being mediator for business and government through
academic forum and conference about SME
• Invite business practitioners and government as guest
lecture in entrepreneurship course, or as resource
­person in entrepreneurship conference
Business • Find out the necessary knowledge for business
application through discussion or sharing session in
association
• Actively requesting training or knowledge transfer to
academician
• Actively meeting with government to discuss about
budget allocation for knowledge sharing session
­(training, forum or other knowledge sharing methods)
Government • Develop blueprint of small and medium industries
development (including creative industry)
• Define target for small and medium industries
­development and allocate the budget
• Establish development programmes for small and
medium industries, including making forum and
­creative council as knowledge sharing media
Table 2.  Initiatives and interest of A-B-G in knowledge sharing process in knowledge hub
Interest/motivation
• Science development
• Character building in education
process to produce graduates with
­entrepreneurship skills and ­knowledge
• Apply knowledge to increase ­business
competitiveness
• Refinement of management practice in
business to develop the business
• Gathering information about market
opportunities from government channel
• Develop new product or design resulted
from academician’s research
• Success of development programme
• Absorption of the budget
• Contribution to local and national
development

other parties. For example, the busi-
ness practitioners should have courage
to come to universities, seek for experts
in small and medium business man-
agement and ask them to transfer the
knowledge to the business communities.
The academician should have enough
willingness to conduct joint research
with business practitioners. Both parties
should actively ask the government part
to fund on these agendas. As regulator
and fund provider, the government sides
are sometimes seen as the arrogant par-
ties by the other two. But actually the gov-
ernment can provide legal support and
also open strategic channel to commu-
nicate with other business sectors, other
areas and even connected globally. The
initiatives and interest of academician,
business and government in knowledge
sharing process in knowledge hub can
be seen in Table 2.
Back to the main objective of the
research to constitute the small and
medium industry as knowledge hub,
the research defines clear role of
each of the parties in the three main
functions of knowledge hub: to gener-
ate knowledge, to transfer knowledge
to sites of application and to transmit
knowledge to other people through
education and training. The result can
be seen in Table 3.

Functions of knowledge Hub

Triple Helix To generate knowledge To transfer knowledge to sites To transmit knowledge

models of application to other people through
education and training
Role of Knowledge generation through Being source of knowledge Being source of knowledge,
academician research. To define body of knowl- trainer
edge about SMEs/industries
Role of Knowledge generation through Receiver of knowledge, implement Training participant, giving
business business ­experience knowledge in business area, giving feedback of training, can be
feedback to generate new knowledge provider of funds in term of
being the training host
Role of Knowledge generation through the Making regulation about knowledge Facilitator and provider of
government process of ­regulation establishment transfer, facilitator and provider of funds funds
Table 3.  Role of A-B-G in knowledge hub

34   Tech Monitor • Jul-Aug 2011


The research found that in the three
main functions of knowledge hub, each
three actors has the same common role.
The academician mainly performs as
the source of knowledge. The business
practitioners function as the implement-
ers of knowledge, the party who ‘test’
the knowledge in the business practice.
While the government being regulator,
facilitator and provider of funds, every
party can be a moderator of the other.
This supports the suggested model that
every actor has the same position and
force in the knowledge hub.
Conclusion
The existing condition of knowledge
sharing in the research object had not
proven to be significantly useful for all
three actors, mostly because it is usu-
ally done impulsively and unplanned,
thus did not give the business practition-
ers with type of knowledge they need
to improve their business. Although
several type of media had been used
and developed to share knowledge, but
many obstacles hinder the knowledge
sharing process to occur intensively. In
SMEs, the existence of all three entities
in Triple Helix model, which are acad-
emician, business and government,
does not guarantee that the region or
hub will be automatically transformed as
a knowledge hub. In order to be consid-
ered as a knowledge hub, within which
knowledge production and knowledge
sharing happens intensively, each of the
three entities should have its own initia-
tives to share knowledge that are trig-
gered by certain interest or motivation.
All interests actually contribute to local/
national competitive advantage, thus
making the knowledge sharing process
an important agenda for the country. All
the three actors need to communicate
their interest clearly to the others, so
they all together could develop an inte-
grated plan of knowledge sharing in the
area in order to constitute a knowledge
hub and gain benefit from the process.
For further research, it is suggested
to expand the research object to other
sectors of SME, whether it is creative
industry or others.
Knowledge sharing in small and medium enterprises
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