Policy Process As Hierarchy For Supporting Technology Upgrade of National Aircraft (Lessons of The Failure of N 250 Aircraft Program-Indonesia Aircraft Industry (IPTN))

This study reconstructs the framework of policy process as hierarchy for supporting technology upgradeof Aircraft which developed through technology development capability. By employing Soft Systems Methodology (SSM), this research result shows that combination between the framework of policy process as hierarchy and Global Value Chain (GVC) with typology of hierarchy includes: firstly, the relations between the three levels in theframework of policy process as hierarchy, particularly between policy level and organization level is not completely hierarchical and linear. In reality, each of the two levels sends feedback, especially in the participatory process of designing of National Development Planning. Secondly, political support from the government is also required. Thirdly, Indonesian Aerospace (IPTN/PT DI) should also strengthen product codification, production, marketing and networking with both national and international partners. The fourth finding is that in development of N 250, the relation is not completely hierarchical since active and long-term government intervention should be counterbalanced by codifiabilityand supplier competence to meet the requirements of the lead firm. The Government and Industry will obtain lesson learnt on how the strategy for supporting the aircrafts manufactured through technology development such as program of N 219 or R 80 which developed at present.