Indonesia is the largest economy in Southeast Asia region and the world’s 10th largest economy in term of purchasing power. In term of population, Indonesia has a huge number of populations, which is about 250 million people in 2016. This makes Indonesia as the world’s fourth most populous nation. In 2030, Indonesia is predicted to emerge as 7th largest economy in the world with $1.8 trillion market opportunity . The statistic shows both market and human resources potential from Indonesia.
However, in term of competitiveness and innovation, Indonesia is still below neighboring countries. These competitiveness and innovation index are reported in Global Competitiveness Report (GCR) and Global Innovation Index (GII) respectively. GCR is a report published by World Economic Forum that assesses the competitiveness landscape of about 140 countries, by providing insight into the drivers of their productivity and prosperity , while GII is a report published by Cornell University, INSEAD, and WIPO that provides an annual ranking of countries by their capacity for, and success in, innovation .
Both GCR and GII indicate that more efforts should be taken in order to support and strengthen innovation system in Indonesia. Innovation system itself is defined by “ a set of distinct institutions which jointly and individually contribute to the development and diffusion of new technologies and which provides the framework within which governments form and implement policies to influence the innovation process. As such it is a system of interconnected institutions to create, store and transfer the knowledge, skills and artifacts which define new technologies” .
The definition above emphasizes a complex and long processes to develop and to diffuse new technologies from Supply to Demand side. Supply refers to those who produce technologies such as academia from universities and R&D professionals from research institutions, while Demand refers to people who utilize technologies such as industries. Moreover, innovation system involves many players both institutions and individuals, including government. Government should play significant roles in order to provide a framework and policies to influence the innovation processes.
A current condition of Indonesia shows a strong awareness of the government to provide STI policies in order to strengthen national innovation system. STI policies can be in any form such as Act, Presidential Decree, Ministerial Decree, Directorate General Decree, and etc. Ministry of Research Technology and Higher Education (RISTEKDIKTI) has become a focal point for formulating frameworks and policies related to innovation system. Such major policies (or draft policies), for instances, are (a). Master Plan of National Research 2017-2045 and (b) National System of Science and Technology (draft bill).
a) Master Plan of National Research 2017 – 2045 (RIRN 2017-2045). RIRN is a planning document for national research sector. One of the goals is to increase the contribution of research to national economic growth. Strategy and performance indicators such as macro research groups, priority research areas, number of researchers, research funding in % GDP, number of publications, and etc., are formulated in RIRN. RIRN is currently in the process of approval to become Presidential Decree.
b) National System of Science and Technology (Sinas IPTEK). Sinas IPTEK is drafted to replace Act No.18, 2002. This Sinas IPTEK provides more complete scope of STI regulations such as technology transfer, technology audit and technology readiness level.
It is agreeable that STI Policies is still a major driver in Indonesia in order to promote science, technology and innovation. Major STI Policies provide strong regulations and also become a comprehensive reference for wide STI actors. Besides major STI policies, there are also minor STI policies and activities that can become effective tools to support innovation system. In addition to updating the major STI policies, below are my recommendations to support a viable national innovation system:
- Ministry, Universities, and Research Institutions should increase the number of STI related activities such as conferences, workshop, and expo.
- It is necessary to break down existing STI Policies in Indonesia into 3 main categories: (a). Policies designed to support SUPPLY side , strengthening Science, Technology and Innovation capabilities , (b). Policies designed to support DEMAND side, creating market needs, (c). Policies designed to support EFFECTIVE linkages between Demand and Supply.
- There are 5 directorate generals in RISTEKDIKTI;
Directorate General of Learning and Student (Ditjen Pembelajaran),
Directorate General of Institutional Science, Technology and Higher Education (Ditjen Kelembagaan), Directorate General of Resources Science, Technology and Higher Education (Ditjen Sumber Daya),
Directorate General of Strengthening Research And Development (Ditjen Penguatan Riset dan Pengembangan), and Directorate General of Strengthening Innovation (Ditjen Penguatan Inovasi). Ditjen Pembelajaran, Ditjen Kelembagaan and Ditjen Sumber Daya should play active roles in formulating STI policies to strengthen SUPPLY side. Ditjen Penguatan Riset dan Pengembangan can support both SUPPLY and DEMAND. Ditjen Penguatan Inovasi should provide STI policies to support EFFECTIVE linkages between SUPPLY and DEMAND.
- There should be a policy for facilitating mobility of academia /R&D professionals especially when they get involved in the technology transfer.
- There should be more events on Innovation Management Training. A comprehensive Training Module should be developed.
- Qualified research reviewer is needed in order to assess the quality of research especially for research projects funded by government. The assessment should be based on research output (publications, intellectual property, R&D prototype). The assessment is not based by process and financial statements. This will simplify the administration and also can increase research productivity.
 Oberman, R., Dobbs, R., Budiman, A., Thompson, F., and Rosse (2012), The Archipelago economy: Unleashing Indonesia’s Potential, The McKinsey Global Institute, MyKinsey & Company.
 World Economic Forum (2016), Global Competitiveness Report 2015/2016, http://www3.weforum.org/docs/gcr/2015-2016/Global_Competitiveness_Report_2015-2016.pdf
 METCALFE, S. (1995), “The Economic Foundations of Technology Policy: Equilibrium and Evolutionary Perspectives”, in P. Stoneman (ed.), Handbook of the Economics of Innovation and Technological Change, Blackwell Publishers, Oxford (UK)/Cambridge (US).
About the Author:
Dr. Edi Kurniawan recently worked as a researcher at the Indonesian Institute of Sciences. His research focuses on control system design for robotics and industrial applications. During his academic career, he spent time as a visiting research fellow at the Royal Melbourne Institute of Technology, the Swinburne University of Technology in Australia, and the Technische Universitat in Berlin.
Through the ASEAN-U.S. S&T Fellowship, Dr. Kurniawan hopes to provide a policy recommendation related to Indonesia’s National Innovation System in order to fill the gaps in the existing policies. He also looks forward to exploring multidisciplinary collaboration opportunities with Fellows from other ASEAN Member States.
Dr. Kurniawan holds a Bachelor’s Degree in Engineering from Gadjah Mada University in Yogyakarta, Indonesia (2003); a Master’s Degree in Engineering from the University of Adelaide Australia (2009) specializing in Electrical and Electronics Engineering; and a Ph.D. in Control Systems from Swinburne University of Technology in Hawthorn, Australia (2013).