Enhancing STI Capacity: Intensifying R&D for … · vor und nach Indonesiens Wirtschaftskrise 1997....

Enhancing STI Capacity: Intensifying R&D for Sustainable Growth in Indonesia. Austrian Institute for International

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Transnational Lecture Series on the

Internationalization of Science, Technology and Innovation 25/04/2015

Vortragende: Prof. Dr. Erman Aminullah, M.Sc.

Moderation: Mag.a Nina Witjes

Adresse: oiip, Berggasse 7, 1090 Wien

Teilnehmer: 10

Zusammenfassung: Rebasso, Binder

Enhancing STI Capacity: Intensifying R&D for Sustainable Growth in

Indonesia.

http://www.dict.cc/englisch-deutsch/participant.html


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Zusammenfassung

In seinem Vortrag am Österreichischen Institut für Internationale Politik bietet Erman

Aminullah einen Überblick über Indonesiens Forschungs-, Technologie- und Innovationspolitik

(FTI) und bespricht Felder potentieller Zusammenarbeit im FTI-Bereich zwischen Österreich

und Indonesien. Der Redner skizziert die, im Long Term Development Plan formulierten, Ziele

Indonesiens FTI-Politik, sowie deren Entwicklung, speziell in Gegenüberstellung der FTI-Politik

vor und nach Indonesiens Wirtschaftskrise 1997. Weiter zeigt Aminullah, dass sowohl

Indonesiens Ausgaben für Forschung, sowie die Anzahl von Forschern pro Millionen

Einwohner, im Vergleich zu seinen Nachbarsstaaten, nach wie vor niedrig ist. Ein wichtiger

Grund dafür liegt, laut Aminullah darin, dass die, ohnehin geringen, Forschungsgelder über ein

breites Spektrum an Institutionen verteilt werden. Der Redner spricht sich schließlich für eine

Zusammenarbeit zwischen Österreich und Indonesien in den Bereichen der Biowissenschaften

und erneuerbarer Energie aus.

Abstract

In his lecture at the Austrian Institute for International Affairs, Erman Aminullah gives and

overview of Indonesia’s Science, Technology and Innovation (STI) policy and discusses possible

fields of international cooperation between Austria and Indonesia. First the speaker outlines

the objectives of Indonesia’s Long Term Development Plan, as well as major government

institutions responsible for implementing its STI policy. Subsequently, Aminullah discusses the

development of the country’s STI policy, and particularly compares STI policy before and after

Indonesia’s economic crisis in 1997. Further, the speaker demonstrates that both, intensity of

R&D (Research and Development) spending and the number of researchers per million

habitants remains low, which, he argues, is a consequence of a broad spectrum of institutions

handling the limited R&D financing. Aminullah concludes by arguing that life-science based

technologies, as well as renewable energies present potential fields of fruitful collaborations

between Indonesia and Austria.


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1. Introduction

Erman Aminullah starts his talk by introducing the geographical and economic characteristics

of Indonesia. It is the largest archipelagic country, consisting of 1,700 islands and 33 provinces

with the second largest coastline in the world, after Canada. Its population of 253 million

includes various ethnics, languages and traditions. The country holds abundant natural

resources (marines, mining and forests) and a huge reserve for energy, namely gas and oil,

coal and geothermal. Its GDP amounted to US$ 888 billion in 2014, ranking 16th in the world

with a GDP per capita of US$ 3,630. Indonesia is a major producer of palm oil, rubber and

timber and its main industries are manufacturing, mining and service. The economy is

predominantly made up of low- and medium-technology (LMT) industries.

Science, technology and innovation (STI) capacity building to solve the country’s most pressing

social and economic problems is still underway in the Indonesian development. Aminullah

defines STI capacity-building as building scientists and engineers competency, physical

technological infrastructure, entrepreneurial and managerial capacity, and scientific

knowledge accumulation through R&D1. Although Indonesia has experienced a gradual

improvement in STI, it still needs to intensify the R&D sector in order to increase productivity

and competitiveness (particularly in mining and agriculture), foster structural change in the

economy, address basic needs problems, catch up to foreign technological advances and to

create a high-quality standard in higher education.

The speaker structures his presentation as follows: first, he gives an overview of Indonesia’s

STI strategy and institutions; second, he lays out the development of STI policies in Indonesia

and weighs in on its outcomes; third, the importance of STI capacity-building, its current states

and problems is discussed; and last, the speaker discusses the potential for future

international collaborations, especially in life science-based research as well as the necessity

of intensifying R&D for future sustainable growth in Indonesia.

2. STI Strategy and the Indonesian Development Plan

The main document stating the objectives of Indonesia’s STI policy is the Long Term

Development Plan (2005-2025). It identifies three main goals, which shall be achieved by 2025.

1 Reference: Paper!


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First, according to the speaker, Indonesia shall work towards becoming a developed and self-

reliant country, supported by human resource development, intensive application of S&T and

a developed infrastructure, indicated by a US$ 6,000 GDP per capita. Second, it envisions

Indonesia as a fair and democratic country under a just rule of law. Third, it aims at achieving

a peaceful and united society.

The Long Term Development Plan comprises four Five-Year Medium Term Development Plans

(MDP). The first MDP (2005-2009) focused on managing social issues, such as poverty and

unemployment. The second MDP (2010-2014) concentrated on building economic

competitiveness, improving HRD quality and the capacity of S&T. The current, third MDP

(2015-2019), in addition to the goals set out by the previous MDP, aims at strengthening the

natural-resource based economy. The last MDP (2020-2024) will focus on creating a solidly

competitive advantage in each Indonesian province, based on strengths and resources

available.

Indonesia’s development strategy, as part of the LDP, is set out in the Master Plan for the

Acceleration and Expansion of Indonesian Economic Development, also MP3EI. The strategy

promotes equitable development in six central economic corridors, each reflecting a specific

region or island. The island of Sumatra is the heart of national mining and energy reserves,

Java is a centre for national industry and service provision; Borneo has large natural resources

and energy reserves; the south-eastern islands are the centre of tourism and food production;

Sulawesi provides agricultural products, plantation, fishery, oil, gas and mining; and Moluccas

and West Papua are centres of food development, fishery, energy and mining.

Subsequently, Aminullah lays out an initiative which was formulated to foster development

through improving Human Resource capacities, known as the 1-747 initiative. Each of the

numbers represents a goal, set by the MP3EI: 1% of the GDP shall be assigned to research; 7

steps to improve the innovation system (incentives for innovators, promotion of local

production, Human Resource development, Low and Medium Technology centres,

remuneration, S&T-parks, R&D financing); 4 sectors for economic growth (basic needs

industry, namely food, medicine, energy and clean water, digital-based and creative

industries, local-based S&T industry, and strategic industries, i.e. defence, transportation);

and 7 objectives of Indonesian Vision 2025 (improving intellectual property rights, S&T parks,

basic needs, export, local products, strategic products, sustainable growth).


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The national STI policy is managed by the Ministry for Research, Technology and Higher

Education (MRTHE), which currently (3rd MDP: 2015-2019) focuses on seven programs: FOOD

(application of food technology for agricultural productivity improvement), ENERGY

(renewable energy technology, i.e. geothermal, fuel cell, solar, biomass, and clean coal),

TRANSPORTATION (multi-modes connectivity system, especially urban transportation, high-

speed trains and inter island connectivity), ICT & IT (IT infrastructure, security, defence and

safety), DEFENCE & SECURITY (self-reliance in terms of defence and security technology),

HEALTH TECHNOLOGY AND MEDICINE, and NEW MATERIALS (i.e. coal gasification, energy

storage, functional nanomaterials).

The strategies for implementation of the STI development plan can be grouped in three

categories: first, developing physical technological infrastructure, such as research institutes,

universities, centres of excellence, techno-parks, etc., second, increasing R&D productivity

through scholarships, fellowships, research grants intellectual mobility and tax incentives, and

third, accelerating down-streaming of innovation by, for instance, implementing technology

transfer regulations, technology assessment and assurance, or supporting R&D based Low and

Medium Technology.

3. STI Development

3.1. STI Development Process

After having laid out Indonesia’s STI strategy, Aminullah gives an overview of the historical

development of STI in the country. He argues that it is marked by three parallel and continuous

processes, which started in the 1950s and continue to this day: institutional-building, capacity-

building and capability-building.

Institution-building started with the establishment of the Indonesian Science Assembly (MIPI)

in 1956, which was later transformed into the National Research Department (DERENAS), and

into the Indonesian Institute of Sciences in 1973. Additionally, the Science and Technology

Park was established in 1976, and the Technology Application Assessment Board in 1991. The

Ministry of Research, established in 1973, was expanded into the Ministry of Research and

Technology in 1986 and into the Ministry of Research, Technology and Higher Education in


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2014, which manages seven non-ministerial government R&D institutions, 63 public

universities and 457 private universities.

The process of capacity building was preluded by Human Resource Development programs,

through financing and scholarship programs in the mid-1980s, followed by capital investment

in the development of 10 strategic industries in the 1990s. However, the process of capacity

building experienced a halt, as the country was hit by an economic crisis in 1997. After the

economic crisis capacity building efforts have been focused on R&D investment: financing

scholarships and promoting R&D centres of excellence.

Aminullah states that increased capacity in STI has increased technology capability in the

economy, especially at industrial and firm levels, however, mostly without R&D. This was

largely facilitated by the import of technology. Furthermore, the speaker claims that capability

building has been delayed due to limited R&D investment which will have to be intensified to

produce advanced industrial goods in the future.

Aminullah points out that a policy shift took place around the economic crisis. Prior 1997,

innovation policy emphasized state-led industrial transformation through preferential

treatment of 10 selected high-tech companies. However, this policy had weak public support

which lead to a policy shift to market-led industrial development, fostered by a conducive

climate for technological innovation. This was aimed to be achieved by stimulating R&D

activities in priority fields2 through various financial incentives for innovation in R&D in the

private sector. However, the speaker argues, incentives for the private sector to conduct

formal R&D are still insufficient.

Five major financial schemes have been put in place to intensify R&D: first, funding support

for public universities, centres for Intellectual Property Rights (IPR) and IPR management;

second, the establishment of R&D centres of excellence and funding of research proposals,

particularly policy research; third, grants for international publications; fourth, financial

incentives for STI actors conducting research, particularly in research consortiums; and last,

funding support for technology development in the industrial sector.

2 Food security, transportation management and technology, information and communication technology, new and renewable energy, defence technology, and health and pharmaceutical technology


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3.2. STI Development Outcome

Regarding the outcome of the previously described process, Aminullah states that Indonesia,

although a latecomer in industrialization, has succeeded to grow positively since the economic

crisis. The industrialization in Indonesia, he argues, is, however, more driven by capital

investment, and less by the process of knowledge and technology accumulation through

learning and innovation. In order to become a fast follower in industrialization, such as China,

the speaker argues, Indonesia has to become a country which engages in innovation through

formal R&D by accumulating knowledge and technology.

The speaker further demonstrates that although the Indonesian economy has been growing

steadily, its national R&D intensity continued to decline. To illustrate, between 1990 and 2010,

grew at a constant 7% before and 5% after the crisis, national R&D intensity declined from

0.13% in 1990 to 0.08% in 2010. The speaker identifies three reasons for this development:

First, the large proportion of low- and medium-technology industry, producing low-

technology products which do not require R&D facilities, second, the declining government

attention to S&T development since the 1990s, marked by a drop in S&T government budget

from 2.5% of the GDP to 0.5%; and third, the very low share of private S&T intensity.

Furthermore, innovation without formal R&D has been dominant in Indonesia. Sources used

by the industry to innovate usually are external (i.e. supplier, customer, and competitor),

internal (marketing, production, business partners) or others such as conferences or the

internet. The role of the R&D sector, made up by private laboratories, universities and

government R&D institutions, however, remains less significant.

Additionally, the speaker points out, the number of researchers per million inhabitants

remains low. An increase in the number of researchers is usually proportional to an increase

in R&D intensity. Aminullah argues that in order for Indonesia to catch up to newly emerging

economies in terms of researchers in R&D, it will have to increase significantly.

To conclude this issue, Aminullah states that Indonesia is characterised by a broad spectrum

of physical technological infrastructure, handling the limited R&D spending. Funding is

distributed among 17 ministerial R&D agencies, 7 non-ministerial R&D institutions, 63 public

university research institutions and other technological infrastructure.


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4. STI Capacity Building

Aminullah identifies a number of STI capacity problems, which need to be addressed by

Indonesia: low STI performance, marked by Indonesia’s low position in the Global

Competitiveness Index; low STI outcome, relating to low productivity and technology

production and export; low STI impact, indicated by low social and economic welfare; limited

STI human capital and low government expenditure in R&D, weak policy synergies between

STI and industrial policies; and a lack of science culture and respect for creativity and IPR. The

main problem, he argues, remains the implementation of R&D programs and the evaluation

of their societal benefits.

The speaker sees the main problem for R&D development in the industrial sector in the limited

number of highly-skilled workers and low capacity of human resources and the dominance of

low-technology products3. Additionally, the role of the public sector in STI capacity building is

hindered by the limited availability of researchers in R&D. While generally countries increase

the share of researchers per million inhabitants4 (RiR), Indonesia has decreased its existing RiR

between 2000 and 2010. Similarly, in terms of research output, Indonesia has been lacking

behind its neighbouring countries. In the past fifteen years it has ranked fourth among ASEAN

countries in terms of publications, lacking far behind Singapore, Malaysia, which has risen

from third place in 2000 to second place in 2010, and Thailand. Malaysia’s increase in

publications, the speaker argues, growing six-fold between 2006 and 2011, has been driven

by a significant increase in R&D intensity.

To improve the links between the government and private sectors, the Indonesian

government is promoting a number of institutional programs, such as building intermediary

institutions, i.e. incubation centres, science technology parks (STP), and technology parks (TP).

The government aims to build 100 STPs and TPs between 2015 and 2019, aiming to support

technology transfer to local communities. They are managed by seven government

institutions: the Ministry of Research, Technology and Higher Education, the Indonesian

Institute of Sciences, the National Nuclear Power Agency, the Agency for Technology

3 i.e. recycling, wood, pulp, paper and paper products, printing, food products, tobacco, textiles, leather, footwear. 4 To illustrate, in the period of 2000-2010, South Korea increased its RiR by 324 researchers per million inhabitants and Malaysia increased the share by 124.


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Assessment and Application, the Ministry of Industry, the Ministry of Maritime and Fisheries,

and the Ministry of Agriculture.

5. Conclusion: Intensifying R&D for Sustainable Growth

Aminullah points out that although STI policies have had a small impact on the Indonesian

economy, indicated by an increase in Total Factor Productivity over the past fifty years, the

sustainability of the Indonesian economy continues to be a challenge. He suggests, that

intensifying life science R&D can promote sustainable growth in Indonesia as it represents the

most developed scientific field in Indonesia. The speaker presents two cases to illustrate this

claim, the National Research Consortium, which has successfully developed and produced a

tuberculosis vaccine and a consortium of stem cell research.

R&D in life sciences, particularly, health and medicine, biology, plant science, ecology and

environmental science, the speaker argues, represent a good opportunity for international

collaboration. Currently, Indonesia collaborates with Japan, Germany, France, the UK and the

Netherlands in the field of life science R&D. The main collaborator countries in terms of co-

authorship of scientific publications are currently Japan, the U.S., Australia, the Netherlands,

and the UK.

Previous collaboration between Austrian and Indonesian researchers has taken place in the

field of renewable energy research, which, as the speaker argues, should be strengthened and

expanded. Scientific cooperation in the fields of nuclear energy and aerospace technology has

been promoted by the Indonesian embassy in Vienna.

The speaker concludes by arguing that intensifying R&D for the international competitiveness

of Indonesia and further exploration of international collaboration in life science-based R&D

is necessary for equitable economic growth. This, he notes, can be achieved by increasing R&D

spending. Current initiatives focus on intensifying R&D in the life science and natural resource

industries, which are driven by life science-based technologies (i.e. bio-based chemicals,

biomedical and bio-technology industry). Life science-based technology has also been driven

by life science parks (LIPI Cibinong Science Centres).


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Prof. Dr. Erman Aminullah is a Senior

Researcher at the Research Center for

Development of Science and Technology at

the Indonesian Institute of Sciences. His

research interests are interdisciplinary

policy research, technology management

and innovation policy. Erman Aminullah

graduated from the Science Policy Post-

Graduate Studies at Saitama University in Japan in 1996, and achieved his Public Policy

Doctoral Degree majoring in Science and Technology Policy from the University of Indonesia

in 1998. He achieved Professor of Research at the Indonesian Institute of Sciences in 2006 in

the field of Technology Policy. His recent publications have, among other things, discussed

Indonesia’s innovation system, technological convergence in Indonesian firms and R&D

intensity in Indonesia.


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Annex: Paper by the Speaker

ENHANCING STI CAPACITY:

Intensifying R&D for Sustainable Growth in Indonesia5

By Erman Aminullah6 and Trina Fizzanty7

ABSTRACT

Science, technology, and innovation (STI) capacity-building is a process that is still

underway in the current Indonesian development. Enhancing the capacity-building through the

intensification of R&D is still a big challenge for Indonesia. Various policy instruments on STI

capacity-building have been designed and implemented to bring Indonesia from its existing

position as a transition in latecomer to a fast follower in industrialization.

Knowledge and technology (K&T) accumulation in Indonesian private sector mostly

come from an informal learning process rather than formal research and development (R&D)

activity. Innovation without formal R&D leaves deficiencies in technology adoption; it means

that the private sector only has the capacity to acquire and use K&T without producing K&T

via R&D. Indonesia has been shifting from informal learning, which mostly has less

emphasized on R&D, to innovation with R&D by intensifying formal R&D activity in the

private sector through public private partnership (PPP).

Intensifying R&D for the competitiveness of Indonesia is imperative to stabilize possible

fluctuations in economic growth in the future. The STI efforts would be increased by

multiplying R&D spending to add a high value of outputs through innovation with R&D

intensity. Indonesia has the capacity to engage in life science R&D, especially in the sectors of

health, agriculture/food, and forestry. Improvements in STI capacity have geared towards life

science–based technology innovation. Current initiatives to enhance the STI capacity in

Indonesia exist by intensifying R&D in life science–based industries.

Life science is also important research area in Austria – from medicine, chemistry,

pharmaceutics and manufacturing technology through to agriculture and nutrition science

(Austrian research promotion agency/FFG). It is therefore futher exploration of international

collaboration, in life science-based R&D could be important for strengthening bilateral

cooperation on science and technology between Austria and Indonesia in the future.

5 Transnational Lecture Series on the Internationalization of Science, Technology and Innovation,

Austrian Institute for Internatinal Affairs (AIIA), Vienna, 25/04/2016

6 Indonesian Institute of Sciences (LIPI), Jakarta, Indonesia. Email: [email protected] 7 Indonesian Institute of Sciences (LIPI), Jakarta, Indonesia. Email: [email protected]


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INTRODUCTION

Science, technology and innovation (STI) capacity-building is still underway in the current

Indonesian development. As we all understand, STI capacity-building is about building

scientist and engineers competency, physical technological infrastructure, entrepreneurial and

managerial capacity, and scientific knowledge accumulation through R&D to solve the

country’s pressing social and economic problems, transform their societies, and positively

impact the standards of living and quality of life (Watkins, 2008).

Even though Indonesia has started building its capacity to access, utilize and create knowledge

and technology since the 1970s, it has not yet fully succeeded in capturing the benefit of S&T

in fulfilling societal needs and increasing citizen welfare. Indonesia has shown a gradual

improvement in almost all STI building indicators, except scientific knowledge accumulation

through R&D. Indonesia still needs to intensify its R&D sector for several reasons: (i) to

increase productivity and competitiveness of leading economic sectors (mining, agriculture,

and industry); (ii) to diversify the sectors of economy towards higher value-added activities

and foster structural change in the economy; (iii) to address the basic needs problems, including

clean water, food availability, electricity supply, health and medicine availability, etc.; (iv) to

increase the absorptive capacity of the industry in modifying and adapting the foreign

technology in generating new knowledge and technology; (v) to increase the level of domestic

technological capability in the process of catching up to foreign technology; (vi) to create a

high-quality standard in higher education in producing highly competent scientists and

engineers to work in R&D (Aminullah, 2015).

After a short introduction about Indonesia, this presentation is organized into four parts. It

briefly discuss them as follows: first, national development in Indonesia, especially that related

to the dimensions of STI inside Indonesia’s national development plan; second, Indonesian STI

development, mainly existing STI development, along with facts, figures, and policies on STI

in Indonesia; third, Indonesian STI capacity, particularly pertaining to the STI system that

works to generate capacity to acquire, use, and produce knowledge and technology (K&T); and

fourth, enhancement of STI capacity by intensifying R&D, especially life science–based R&D

for the sustainable growth of Indonesia in the future. And we will close this presentation with

some remarks.

1. INDONESIA

Indonesia is the largest archipelagic country in the world, consisting of 1,700 islands

surrounded by sea and the second longest coastline after Canada. In 2014, the population of

Indonesia was 253 million, the fourth largest in the world. The central government governs 33

local governments or provinces, and each province has its own rich culture, ethnicity, local

language and traditions.


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Indonesia has abundant natural resources, spanning across the industries of marine, mining and

forestry. In 2014 the Indonesian GDP amounted to US$888 billion, ranking 16th in the world,

with the GDP per capita being US$3,630. The manufacturing industry is a major industrial

sector in Indonesia. The economy is predominantly made up of low-and medium-technology

(LMT) industries. There are other industries, such as the mining industry and mineral

production, and service industries, primarily tourism. Indonesia is a major producer in the

world for palm oil, cocoa, rubber, and timber, as well as also a major exporter of minerals,

including coal, steel, nickel, copper, bauxite, and gold. Indonesia also has large reserves of

energy, such as gas, oil, coal, and geothermal. As the economy has been relying on the natural

resource-based industries, Indonesia ranked 34th out of 144 countries in global competitiveness

in 2015.

2. STI IN THE NATIONAL DEVELOPMENT PLAN

i. STI inside the Indonesian development plan

Given the broad dimensions of national development, we will limit the discussion to

Indonesia’s stages of development, strategy and program to achieve the vision and mission

stated in the long-term development plan (2005-2025). In particular, we will discuss STI within

each stage of the national development, the aspects of STI in the national development strategy,

the STI development program, the STI development policy, and the national R&D system.

The vision and mission of Indonesia’s national development plan for 2025 work towards: (i)

Indonesia as a developed and self-reliant country, supported by high-quality human resource

development (HRD), intensive application of S&T, and developed infrastructure, and indicated

by a US$6000 GDP per capita, attainment of food self-sufficiency, and the manufacturing

sector as the main driver of the economy; (ii) Indonesia as a fair and democratic country under

a just rule of law; and (iii) Indonesia as a peaceful and united society where all live in security.

Indonesia’s long-term development plan (LDP) spans over a period of 20 years (2005–2025)

and consists of four stages, each a five-year medium-term development plan (MDP). The first

MDP (2005-2009) focused on the management of social issues such as poverty and

unemployment arising out of the global economic downturn. The second MDP (2010-2014)

emphasized on developing economic competitiveness, HRD quality, and science and

technology capacity. The third MDP (2015-2019) concentrates on strengthening economic

competitiveness and a natural resources-based economy, quality HRD, and S&T mastery.The

fourth MDP (2020-2024) will aim to create a solid competitive advantage in every province,

supported by competitive HRD. The first and second MDP has succeeded in putting in a solid

foundation for STI development and strategy. The implementation of STI programs and

policies in the next MDP (2016-2025) is expected to be in line with the plan that has been

outlined.


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The Indonesian development strategy is explicitly set out in the official document. It is titled

the Master Plan for the Acceleration and Expansion of Indonesian Economic Development, or

the MP3EI, and is a part of the LDP. The strategy was formulated out of the integration of three

dimensionally big steps, namely the diffusion of development in six central economic corridors,

the connectivity of which will be boosted, and driven by S&T mastery as well as quality of

HRD. An important point in the strategy is the important role that STI will play in creating

equitable growth in the six corridors.

The central corridors reflect the advantages of each respective region or island in the Indonesian

archipelago. The island of Sumatra is the centre of production and processing of national

mining and energy reserves; the island of Java is the driver for national industry and service

provision; the island of Borneo is a centre for production and processing of natural resources

and the nation's energy reserves; the group of islands in the south-east is becoming the gateway

for tourism while also being the national food production center; Sulawesi is a hotspot for

national production and processing of agricultural, plantation, fishery, oil and gas, and mining;

and the islands of Moluccas and West Papua is a centre for food development, fisheries, energy

and national mining industry.

ii. STI strategy, program and policy

Indonesia has a specific initiative to build S&T capability, the so-called strategy working

towards quality HRD, known as the 1-747 initiative. There is a meaning behind this symbolic

number. First,1% of GDP allocated to research – a goal expected to materialize in 2025.

Second, the initiative outlines seven steps for innovation systems improvement, which includes

incentives for innovators and promotes local production, HRD quality and mobility, low and

medium technology LMT centres, innovation clusters, remuneration, S&T parks, and R&D

financing. Third, it identifies four sectors for economic growth acceleration: the basic needs

industry (food, medicine, energy, and clean water), digital-based and creative industries, local-

based S&T industry, especially industry in local science and technology parks (STP), and

strategic industries (defence, transportation, ICT). Fourth, the Indonesian vision for 2025 list

seven objectives: strengthening intellectual property right/IPR, building S&T parks, attaining

self-sufficiency in the basic needs, increasing creative product exports, attaining self-

sufficiency in strategic products (defence, transportation, ICT), increasing locally competitive

products, attaining sustainable growth and equitable prosperity.

In line with the LDP, the national scheme on STI is managed by the Ministry for Research,

Technology and Higher Education (MRTHE). There are seven programs as the focuses that are

currently being implemented by MRTHE for the period of 2015-2019: (i) food: application of

food technology for the improvement of agricultural productivity; (ii) energy: renewable energy

technology (geothermal, fuel cell, solar, biomass) and clean coal; (iii) transportation: multi-

mode connectivity system, including mass transportation (urban), high-speed train (inter-

province), sea-toll (inter-island); (iv) ICT, IT infrastructure as well as IT security, defence, and

safety; (v) defence and security; pursuit of self-reliance in support technology for defence and


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security (land, sea and air weapons technology and defence system); (vi) health: technology

and medicine, functional food, vaccine, diagnostic kits, bio-pharmaceutical and stem cells,

herbal medicine, antibiotics; and (vii) new materials, coal gasification, composite steel, energy

storage, and functional nano-materials.

In the implementation of the STI development plan, the MRTHE applies various policy

instruments. The policy instruments are grouped into three categories. First, development of

physical technological infrastructure through investing in laboratories and support facilities for

research institutes, universities, centres of excellence, techno-parks, state-owned strategic

companies, testing laboratories, and scientific information. Investment priorities are related to

the focus of the program that will be implemented in the diffusion stage – for example, the

establishment of a genome research centre to produce vaccines. Second, increases in R&D

productivity through various R&D financing schemes such as scholarships, fellowships, and

research grants (for instance through the new funding agency that provides research grants, the

Education Fund Management Agency or LPDP); development of a system of incentives to

attract brain-gain and prevent brain drain; development of more attractive tax incentives for

R&D investment in the private sector. Third, acceleration of down-streaming innovation by

implementing technology transfer regulations, technology assessments, technology assurances,

high-risk research insurance, support for R&D-based LMT, venture capital, pre-commercial

guarantees, government procurements, standardization and quality support, and intermediary

institutions. The establishment of new techno-parks as well as science and technology parks

are part of the current implementation in accelerating down-streaming innovation.

Putting the STI policy instruments to work involves relations between ministerial agencies,

which falls under the coordination of the MRTHE. It is called the national R&D system. The

Indonesian R&D system comprises of three elements, namely university research institutes,

non-ministerial R&D agencies, and ministerial R&D agencies. University research institutes

generally engage in basic and applied research to develop science and technology. Non-

ministerial R&D agency mostly conduct mission-oriented research to realize the national

program focus on R&D. Ministerial R&D agencies primarily lean towards developmental

research and policy studies to support ministerial programs and policies. The national R&D

system works to implement the national research agenda as formulated by the National

Research Council(DRN) in cooperation with the MRTHE. The MRTHE coordinates all parties

in the national R&D system through national coordination meetings on STI. The

implementation of the national research agenda is financed by the R&D budget, which are

allocated by each ministry, agency, and institute. While, the Indonesian research fund allocates

the budget for a special research agenda designated by MRTHE.


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3. STI DEVELOPMENT

i. STI development process

In the STI development process, there are three parallel and continuous processes which begun

in the mid-1950s and continues up to the present: the institutional-building, capacity-building

and capability-building. The first, institutional-building, was initially marked by the

establishment of the Indonesian Science Assembly (MIPI) in 1956, which was then developed

into the National Research Department (DERENAS) in 1963, until it was transformed into the

Indonesian Institute of Sciences in 1967 and remains today. After the establishment of the State

Ministry of Research in 1973, two important institutions were established – namely the Science

and Technology Park (1976) and the Technology Application Assessment Board (1991). The

Ministry of Research afterwards was expanded into the Ministry of Research and Technology

in 1986, and further widened into the Ministry of Research, Technology, and Higher Education

in 2014. The new ministry manages and coordinates seven non-ministerial government R&D

institutions, 63 public universities and 457 private universities.

The second, capacity-building in STI, was initially developed by HRD programs through

financing or scholarship programs in mid-1980s, followed by the acquisition and digestion of

technology through capital investment for the development of strategic industries in the 1990s.

However, the strategic industries was hit by the economic crisis of 1997, and consequently the

effect was a delay in further capacity-building through capital investment. After the economic

crisis, STI capacity-building has focused on R&D investment in priority programs, increasing

the number of R&D centres of excellence, as well as financing scholarship programs.

The third is capability-building in STI. The results of capacity-building has gradually increased

technology capability in the economy, especially at industrial and firm levels. Indonesia’s

industries gained capability in plant operations and basic industrial skills in the 1980s.

Furthermore, since the 1990s, the Indonesian industry has captured the capability in

redesigning old products and processing. The increase in technological capability was

facilitated by the use of imported technology without digesting the technology. The capability

in the technology use was gained through learning activities that was generally without R&D

or with less R&D in selected sectors. Additionally, since the 2000s, Indonesia has focussed on

building capability in designing and redesigning system engineering as well as competing with

innovative products in the global market. However, due to a limited R&D budget, Indonesia

has experienced delays in building innovative capability. It is the reason why Indonesia

urgently needs to intensify R&D so that it may produce advanced industrial goods in the near

future.

From a policy perspective, there were some innovation policies shifting behind the STI

development process before and after the 1997 economic crisis. First, innovation policy for

developing technological capability prior to 1997 economic crisis emphasized industrial policy,

especially the development of high-tech industry. Policy orientation placed the government in

a dominant role by applying a strategy of state-led industrial transformation based on

technological innovation. The policy instrument was preferential treatment given to ten high-


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tech strategic companies.8 The implementation of innovation policy on the developing high-

tech industry was under strong government support. It had successfully brought industrial

transformation, but weak public support resulted in policy discontinuity after the effects of the

1997 economic crisis.9

Second, innovation policy after the 1997 economic crisis emphasized R&D policy as national

priorities to solve the nationally urgent problems. The policy was strongly oriented towards

market-led industrial development through its creation of a conducive climate for technological

innovation. The main policy instruments were incentive programs aimed to push industrial

participation in technology development, in addition to the program strengthening public R&D

institutions through various competitive research schemes. The priority of the R&D program is

split between six areas: (i) food security; (ii) transportation management and technology; (iii)

information and communication technology; (iv) new and renewable energy, (v) defence

technology; and (vi) health and pharmaceutical technology. Despite this, policy implementation

in order to stimulate R&D still lack incentives, especially super tax incentives for the private

sector to conduct formal R&D.

The Indonesian government has launched several STI policy instruments to intensify R&D

between 2001 and 2011. In 2001, the Indonesian Ministry of Finance launched Regulation No.

231/2001 aimed at providing compensation for imported goods for research and science

purposes, as well as exemptions from the value-added tax and luxury goods tax. The regulation

was restated in 2007, when the Indonesian Ministry of Finance launched Regulation No.

51/2007 aimed at providing compensation for imported goods for R&D purposes. The next

incentive was also launched in 2010, where the Indonesian government’s Regulation No.

93/2010 stated clearly that R&D expenditure (for private companies) is included in deductible

expenses, and any income-sourced donation from private companies to selected R&D

institutions shall be fully deductible. In 2011, government Regulation No. 52/2011 was

launched in order to promote a one-year investment allowance for private companies who

spend their income in R&D activities in national R&D institutions. Although the STI policy

instruments exist, the Indonesian innovation system is not well established yet, due to some

policy problems such as policy coherency, integration and its implementation.

The Indonesian MRTHE has also set up budget incentives to intensify R&D in universities and

R&D in the industry. There are five major government funding programs, including

universities’ research programs, R&D centre of excellence, international publication awards,

research incentives for national inovation system (NIS), and technology development in

industrial sectors. The government’s funding program for universities stipulates the following:

(i) supporting public universities in developing research and community empowerment

8 These ten strategic state owned enterprises were IPTN, now DI (aircraft); PAL (shipbuilding); INKA (railroad wagons); LEN

(electronics); INTI (telecommunication); PINDAD (light weapons and ammunition); DAHANA (explosives); BBI (engines and machinery); BARATA (heavy equipment and construction material); and KRAKATAU (steel).

9 An example of successful transformation in stages is the production of aircraft at IPTN, starting from assembling of various small

planes and helicopters in 1976, followed by the integration of previous knowledge gained in the production of CN 235 airplane

with double engines and a capacity of 35 passengers, designed in cooperation with CASA (air-tech) in 1984, followed in turn by

improvement of aircraft technology through R&D activities to make the N250 aircraft with double engines and a capacity for 50

passengers, fully designed by IPTN in 1989. The final stage was the full production of a jet aircraft with a capacity of 100

passengers.However, the termination of production was unavoidable, because IPTN was hit by the 1997 economic crisis.


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programs with total amount of US$90.4 million in funds; (ii) promoting centres for Intellectual

Property Rights/IPR in universities at the amount of US$3.9 million; and (iii) IPR management

amounts to US$0.678 million. The R&D budget support has two objectives: (i) establishing

R&D centres of excellence with the minimum amount of US$17,800 a year in funding for each

institution; (ii) Ris-PRO LPDP program for research funding, with an amount of US$140,000

a year for projects spanning three years maximum, or two years for implementative policy

research at the amount of US$35,714 a year. The MRTHE also bestow awards upon productive

Indonesian scholars who are able to be published in international publications indexed by

Scopus or Thomson Reuters. Scholars are encouraged to present his/her international

publications for the next five years and are awarded with a paymentof between US$3,570/paper

to US$7,140/paper, based on scientific impact factors and citations. The ministry has also

launched a special funding scheme to encourage STI actors to create partnerships, particularly

in research consortiums. The funding’s support is between US$42,850 to US$100,000 for each

research proposal annually, with a maximum of three years on a project. The funding scheme

is also available for non-consortium actors but with a smaller amount, ranging from US$7,142

to US$14,285 for each proposal annually for maximum three years project.

ii. STI development outcome

The outcome of STI development is generally indicated by economic growth, especially

industrial growth. The Indonesian economy has continued to grow positively sincethe economic

crisis in 1997. The economy grew around 5.18 %on average yearly in the period of 2001-2012.

As a latecomer in industrialization, Indonesia has nevertheless succeeded in achieving

economic progress. The 2014 GDP was around US$888 billion, ranking 16 out of 193

worldwide.The industrialization in Indonesia is more driven by capital investment, and less

created by the process of knowledge and technologyaccumulation through learning and

innovation with formal R&D such as China and other fast followers. In order to become a fast

follower in industrialization, Indonesia needs to shift from innovation through learning, most

of which happens without formal R&D, to become a country engaging in innovation with R&D

by accumulating knowledge and technology.

Indonesia has been delayed in its transition to becoming a fast follower in industrialization. It

is shown by the contribution of industrial sector to the economy – it was relatively constant at

around 30%with around 5% yearly growth in the period 2001-2010. The growth of industrial

output experienced a declining trend in the mid-2000s. The stagnant growth of industrial sector

is contributed by the dominant composition of industrial outputs (around 50%) shared by low-

tech industries, such as recycling, wood, pulp, paper and paper products, printing and

publishing, food products, beverages and tobacco, textiles, textile products, leather, and

footwear, while the positive economic growth was dominated by tertiary sectors (water, gas,

electric, construction andother services).

Viewed from learning trajectory that reflects the movement of STI development along the S-

curve of technology capability. It is a shift from technology use and operation, technology


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acquisition and assimilation, and technology upgrading and reverse engineering towards R&D

activity. The Indonesian position is called the “latecomers’ transition” where its industrial

sector, which has basic industrial skills in plant, is in transition to becoming a late comer with

regard to the capability of the industry in the redesign of old products and processes.

Furthermore, the country is expected to move toward becoming a fast follower with the

industrial capability in the design and redesign of system engineering and competing with its

own innovative products. The country will then enter the phase of frontiers countries with the

capability in its industry to produce advanced goods through design and redesign and also have

high system linkages. Indonesia has been delayed in learning to become a fast follower in STI

development, with some former developing countries in Asia – such as Korea and Taiwan, and

now followed by China and India – having attained that status of fast follower in STI

development. This is shown by these countries’ centres of operation in the global production

network (GPN) and then moving on to strive to become the headquarters of global innovation

networks (GIN).

The following STI indicators explain the existing situation of the Indonesian STI development

process and outcome. First, stagnantly low R&D intensity. Despite the fact that the Indonesian

economy continued to grow, its national R&D intensity continued to decline. For the period of

1990-2010, GDP rose 30-fold at nominal value, growing at a constant 7% before the 1997 crisis

then 5% after. On the other hand, national R&D expenditure rose 16-fold, but R&D intensity

invariably declined from 0.13% in 1990 to 0.08% of GDP in 2010 (Pappiptek-LIPI, 2011).

There are three situations that relate to low R&D intensity in Indonesia, namely: (i) the large

proportion of low- and medium-technology (LMT) industry, which produces low-technology

products that does not require R&D facility; (ii) the declining government attention towards

S&T development since the 1990s, the S&T government budget allocation dropping to 0.5%

from 2.5% in the 1980s, and remaining at 0.5% in the 2000s; and (iii) the very low share of

private R&D intensity, as the private sector is generally less interested in reinvesting their

production yields into R&D activity. Such a low R&D intensity has kept Indonesia in a

‘defending’ position, producing low-end products in the economy as shown by large proportion

of the LMT industry in the industrial sectors. In 2010, industrial R&D expenditure was very

small, coming to only 0.013 % of GDP or about US$90 million of the total Indonesian GDP,

US$700 billion.

Second, the dominant role of innovation without formal R&D. Based on data from a 2011

Indonesian innovation survey, 61% of industries engaged in product, process, organizational

and marketing innovations. Among those innovative firms around 52% of them innovate

without engaging formal R&D activities. The firms innovate through either non-R&D and

informal R&D innovations. The sources of information frequently used by the industry to

innovate are external sources (supplier, user/customer, and competitor),internal sources

(marketing, production, management, business partner), and other sources such as the internet

and conferences. The role of the R&D unit is less influential as the source of innovation for

industry. Similar patterns of dominant role innovation without formal R&D also exist in the

machinery and food sectors. The machinery sector is more frequent in making use of all three


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sources for innovations, while the food sector more frequently utilizes institutional sources of

innovation than the machinery sector, such as private laboratories, universities and government

R&D institutions.

Third, the low number of researchers in R&D per million population (RiR). The availability of

researchers in R&D is necessary, and the quantity of highly qualified researchers in R&D must

be sufficient to lever R&D activities at the national level. An increase in the number of

researchers in R&D tend to have a proportional relationship with an increase in R&D intensity.

The majority of countries which have a large number of RiR are developed countries. R&D are

conducted by more than 3,000 of RiR for a level of high R&D intensity (more than 1% of GDP)

in developed countries. Except for India, in some newly emerging economies, the value of RiR

for a level of high R&D intensity (more than 1% of GDP) vary from 500 to 3000. Most

developing countries have a RiR value of less than 500, with low R&D intensity (less than

0.5% of GDP). To catch up with the general value of RiR in newly emerging economies,

Indonesia should increase the value of RiR by 500 in 2025 and reach 1,500 in 2045. The actual

number of researchers in R&D Indonesia should be raised from 22,150 in 2010 (RiR=90) to

142,500 in 2025 (RiR=500).

Fourth, the broad spectrum of physical technological infrastructure. The physical technological

infrastructure to support the limited R&D spending in Indonesia is distributed over 17

ministerial R&D agencies (LPD), 7 non-ministerial R&D institution (LPND), 63 public

university research institutions (LPU), and other technological infrastructure. Activities at all

public R&D institutions cover basic science research, technology research, applied

technology/innovation research, technical services/dissemination,and promotion of science and

technology. Some R&D institutions have developed as a centre of excellence, mostly in life

science research, such as the Eijkman Institute for Molecular Biology and the Institute of

Tropical Disease. In addition, public R&D institutions also conduct R&D in contributing to

solve urgent national problems, which are specifically assigned by the government.10

STI CAPACITY-BUILDING

The implementation of Indonesian STI capacity-building is generally a question of the

matching-transformation of articulated STI capacity problems into an STI capacity that impacts

well on society. An STI capacity problem is more than an R&D program that needs to be

addressed. The matching-transformation should guide the two main parallel components, the

private sector and public sector, through an intermediary institution, which match the bilateral

relations between them in creating knowledge and technology (K&T). The private sector

component creates the capacity to acquire and use K&T mostly through learning or without

R&D by using technologically skilled labour as well as enterprise capacity to produce higher

added value. The public sector component creates the capacity to produce K&T with R&D by

using scientifically skilled researchers in addition to R&D institute capacity to produce K&T

10 For example, appropriate and affordable technology for the improvement of the local economy in rural areas, e.g. the so-called

local S&T programs (IPTEKDA), energy for all households (Indonesian lighting program).


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for development. The existing outcome of STI capacity-building in private sector thus far has

produced some social and economic impact, while the public sector capacity still has had a less

beneficial impact for the society.

There are still some STI capacity problems which need to be addressed by Indonesia, which

are: low STI performance as denoted by Indonesia’s low position in the Global

Competitiveness Index; low STI outcome as indicated by the low productivity and technology

content production and export; low STI impact as demonstrated by the still relatively low social

and economic welfare; very limited STI human capital and financial support as denoted by very

low researcher numbers in R&D (RiR) and government expenditure on R&D (GERD); an

intermediary institution that is still too weak to create effective PPP in R&D activities; still-

weak policy synergy between STI and industrial policies; and continued lack of science culture

to respect creativity and IPR. While R&D programs as a part of STI capacity-building, the main

problem persists when it comes to R&D program implementation and evaluation for societal

benefit. This is despite all the R&D programs being well-planned and documented in the

government office. The R&D program includes biotechnology, agricultural biotechnology,

health, marine technology, renewable energy, information technology, aerospace technology,

transportation technology, defence technology, clean water, electronics technology, spatial

information systems, and disaster mitigation.

The role of private sector in STI capacity-building is mostly generated through learning without

formal R&D. This is related to the low-skilled labour force in the economy, especially in the

industrial sector. The education level of the labour force in the industrial sector mostly

encompass junior high school or less, followed by general school and vocational school. Very

few university graduates work in industrial sector. The low capacity of human resources in the

industrial sector is in line with the dominant industrial output which is dominated by low

technology products, such as recycling, wood, pulp, paper and paper products, printing and

publishing, food products, beverages and tobacco, textiles, textile products, leather, and

footwear. With the exception of the period of 2009-2012, there was a decrease in the share of

low-tech industries as they were substituted by the increase of medium- tolow-tech industries,

such as building and repairing of ships and boats, rubber and plastic products, coke, refined

petroleum products and nuclear fuel, and other non-metallic mineral products.

The role of the public sector, especially public R&D institutions (PRIs) in STI capacity-

building, is hampered by the limited availability of researchers in R&D, measured by the

number of researchers in R&D per million population (RiR). Generally, countries increase RiR

within a period of time, except Indonesia, whose existing RiR was reduced. South Korea

produced 324 new RiR (nRIR) yearly in the period of 2000-2010, followed by Malaysia (124),

Slovakia (93), Italy (53), and China (38), where Indonesia reduced its existing RiR by -12 in

the same period. Viewed from outputs indicators, i.e. publications, the Indonesian position is

far behind neighbouring countries such as Singapore, Malaysia and Thailand. Among the

ASEAN countries, Indonesia ranks fourth in term of publications and its position has been


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constant in the last fifteen years. On the other hand, Malaysia, which ranked third in 2000s, has

risen to the second place in 2010s. The rapid increase of Malaysia’s scientific publications of

six fold within 5 years (2006-2010) corresponded with the significant increase of R&D

intensity from 0.6%to 1.1% in the same period (World Development Indicators, November

2015).

The intermediary institutions’ facilitations of links between the government and private sector

is underway in building STI capacity in Indonesia. Currently the Indonesian government is

promoting institutional programs such as building intermediary institutions, e.g. incubation

centres11, science technology parks (STP), and technology parks (TP). The government has

insisted in building 100 STP and TP within five years (2015-2019) with the goal of supporting

technology transfer to local communities with the aim of added economic value, as well as

promoting technology- and science-based innovation. There are seven government institutions

which were selected to be the national management institutions for STP/TP:the Ministry of

Research, Technology, and Higher Education, the Indonesian Institute of Sciences (LIPI), the

National Nuclear Power Agency (BATAN), the Agency for Technology Assessment and

Application (BPPT), the Ministry of Industry, the Ministry of Maritime and Fisheries, and the

Ministry of Agriculture. The government has set up establishment target for each institution

during the five-year period.

Viewing the impact of STI capacity-building on economic development, there was a small

impact on Indonesian economy as indicated by Total Factor Productivity (TFP). Over a period

of fifty years, Indonesian total factor productivity (TFP) was slightly increased. In 1960, the

TFP was only 0.791 and increased slowly, reaching 1.047 in 2010. The source of Indonesia’s

growth was dominated by government and community consumption and also efficiency of

input usage, instead of STI activities and value-added output. In this context, the sustainability

of the Indonesian economy continues to be a challenge which requires an innovative solution.

4. INTENSIFYING R&D FOR SUSTAINABLE GROWTH

i. Systemic STI capacity-building

11 Center of Innovation at LIPI, just to name one. The center now has managed 17 tenants after 10 years of

operation. Most of the companies are small to medium enterprises and focus on agroindustry, material,

energy and chemical businesses. The other type of intermediary institution is research centres, for instance

the Jababeka Research Center which is located near the capital city, Jakarta. The center is home to around

five multinational companies in the electronic, chemical and food industries.


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This section deals with the complex problem of building STI capacity, as described in the

previous section. Despite the constraints of limited researcher availability and R&D budget in

Indonesia, by upgrading the function of intermediary institution from matching bilateral

relations to creating systemic interactions between public research institution (PRIs) and

industry, there have still been some successful cases of building STI capacity in life science

R&D. Systemic interaction essentially produces the knowledge and technology capabilities

through R&D to solve the country’s pressing social and economic problems, transform the

societies, and have a positive impact on the standards of living and quality of life. See figure

below.

Enhancing STI capacity-building focuses on the availability of institutional setting to create

systemic interactions between PRIs and industry. The institutional setting does more as an

intermediary institution than to simply match; it includes directly assisting the industry through

various schemes of interaction such as consortiums, collaborations, partnerships, research

grants, contract research, budget sharing, researcher mobility, management mobility, and

investment access/guarantee. The institutional setting shapes the system of public-private

interaction systemically to produce the desired types and levels of knowledge and technology

capabilities. For further detail, success stories of PRIs assisting industries in developed

countries including Germany, USA, Japan, Taiwan, and Australia were confirmed by

Intarakumnerd (see Intarakumnerd & Goto, 2016).


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Every country has PRIs as the centres of excellence in specific areas of R&D. PRIs have the

capacity to engage in relevant R&D for the country’s social and economic needs. The R&D

areas of PRIs can be part of the government R&D program or industrial needs, based on

contract R&D. PRIs at the University of Tokyo was assigned by Ministry of International Trade

and Industry (MITI) to conduct research on very large-scale integrated circuit (VLSI) in

cooperation with electronics industries in Japan. In another example, a new material laboratory

at the Agency of Industrial Science and Technology (AIST) in Tsukuba conducted research on

carbon fibre in cooperation with the sport equipment industry in Japan. The Korean Agency of

Industrial Science and Technology (KAIST) has contributed to shipbuilding technology. The

Commonwealth Scientific and Industrial Research Organisation(CSIRO) helps the industry in

research on mining, food and agriculture. The Indonesian PRIs such as Eijkman Institute

conducted R&D collaboration in stem cell technology and Bio-pharmaceutical enterprises and

developed a TB vaccine in cooperation with a university.

ii. Intensifying life science R&D for sustainable growth

Promoting life science–based technology consortiums as the implementation of systemic STI

capacity building is a workable strategy in Indonesia and also contributes to solve global issues.

We present two case studies. In the first case study, the National Research Consortium was

established in Indonesia to conduct research, develop and produce atuberculosis vaccine. The

consortium has succeeded involving various organisations, such as non-ministerial R&D,

ministerial R&D, industry, higher education and regional/national science techno parks.

Through developing the national vaccine consortium, more opportunities have opened for

Indonesia to engage more with international business networks and expand the vaccine

business. The Indonesian TB vaccine meets the WHO standard, and has already been exported

to many developing countries.

The second case study is that of a consortium of stem cell research in Indonesia. Four

institutions were confirmed to be members of this consortium, including the Research Centre

at University of Airlangga, the Biomaterial Centre in Soetomo Public Hospital, the National

Nuclear Power Agency, and a company, PT Kimia Farma. The university researchers have

conducted intensive research on stem cells, and collaborated with medical researchers and

medical doctors in a public hospital (biomedical centre) to develop stem cell technology for

medical treatment purposes. Through their partnership with the National Nuclear Power

Agency of Indonesia, the consortium has applied nuclear power to biomaterial development.

To scale up the technology innovation on biomaterials, PT Kimia Farma – a state-owned

company on pharmacy industry – was also invited to join this consortium.

The important position of life science R&D for Indonesia has been shown by the

internationally scientific reputation of Indonesian researchers who engage in the area of life

science R&D. The most developed data from scientific activities of Indonesian researchers, in


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terms of international collaboration and international publication, are health and medicine,

biology, plant science, ecology, and environmental science. It is therefore the opportunity of

international collaboration on R&D that could be explored in the health sector, agricultural,

and marine R&D (Akil,2014). Through data from the Web of Science, we could identify that

there has been co-authorship in international publication between Austrian and Indonesia

researchers in field of renewable energy research12– this should be strengthened and expanded

in future. The Indonesian embassy in Vienna – through its scientific attache in Vienna has

activily promoted scientific cooperation (workshop, training and scientific networks) in the

fields nuclear energy and aerospace technology research.

We noticed that from Austrian research promotion agency/FFG also promotes life science

R&D especially medicine, chemistry, pharmaceutics and manufacturing technology through to

agriculture and nutrition. The current collaborator countries for Indonesia in life science R&D

are Japan, Germany, France, UK, and the Netherlands. Meanwhile, the collaborator countries

for Indonesia with the largest number of co-authorship of scientific publication come from

Japan, USA, Australia, the Netherlands, and UK.In short, Japan and some EU countries are

important counterparts for Indonesia in scientific cooperation.



multiplying R&D spending to add a high value to outputs. Initiatives to enhance STI capacity

in Indonesia currently also focus on intensifying R&D to create life science–based industry.

Indonesian natural resources-based industries, which are driven by life science–based

technologies, will further develop faster such as bio-based chemicals, biomedical and

biotechnology industries, etc. The availability of life science parks (the so called LIPI Cibinong

Science Centers) has also been driving the life science-based technology development in

Indonesia. In short, in applying a science policy for industrial technology development,

Indonesia is enhancing STI capacity by encouraging public-private partnership (PPP) in R&D

(consortiums of joint research, R&D collaborations). These efforts has been realized by

implementing a conducive institutional setting for PPP.

CONCLUDING REMARKS

12 International co-authorship with Austrian institutes in field of energy, it involved some instititutes in

Austria: Johannes Kepler Univ Linz, Inst Expt Phys, A-4040 Linz, Austria; Univ Leoben, Dept Appl Geosci & Geophys, A-8700 Leoben, Austria; Univ Vienna, Dept Geodynam & Sedimentol, A-1090 Vienna, Austria


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STI capacity-building is still underway in the current Indonesian development.

Enhancing capacity-building by intensifying R&D is still a big challenge for Indonesia. Various

policy instruments on STI capacity-building have been designed and implemented to bring the

Indonesian position closer to becoming a fast follower in industrialization from its existing

position as a latecomer in transition.

Knowledge and technology (K&T) accumulation in Indonesian private sector mostly

come from an informal learning process rather than formal research and development (R&D)

activity. Innovation without formal R&D leaves deficiencies in technology adoption; it means

that the private sector only has the capacity to acquire and use K&T without producing K&T

via R&D. Indonesia has been shifting from informal learning, which mostly has less

emphasiszed on R&D, to innovation with R&D by intensifying formal R&D activity in the

private sector through public private partnership (PPP).



multiplying R&D spending to add a high value of outputs through innovation with R&D

intensity. Indonesia has the capacity to engage in life science R&D, especially in the sectors of

health, agriculture/food, and forestry. Improvements in STI capacity have geared towards life

science–based technology innovation. Current initiatives to enhance the STI capacity in

Indonesia exist by intensifying R&D in life science–based industries.

Life science is also important research area in Austria – from medicine, chemistry,

pharmaceutics and manufacturing technology through to agriculture and nutrition science

(Austrian research promotion agency/FFG). It is therefore futher exploration of international

collaboration, in life science-based R&D could be important for strengthening bilateral

cooperation on science and technology between Austria and Indonesia in the future.***

Selected references:


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Akil, H. A. et.al. (2014). Study on the status of science and technology development in

Indonesia. Jakarta: Pappiptek-LIPI.

Aminullah, E., Fizzanty, T., & Maulana, Q. B. (2016). Drivers of innovation without formal

R&D: Selected cases of Indonesian firms.InIndustrial development along the global

supply chain: Organizational evidences from Southeast Asia: How firms have achieved

product and process innovations without formal R&D unit or personnel [Research

report series], Chapter 2. Tokyo: IDE/JETRO, ERIA.

Aminullah, E. (2015). Learning, R&D intensity and economic prosperity in low R&D countries

(LRDCs): envisioning the Indonesian future [Keynote address – proceedings]. Paper

presented in Asialics 2015 Conference, Yogyakarta, Indonesia.

Intarakumnerd, P., & Goto, A. (2016). Role ofpublic research institute in national innovation

system in industrialized countries: The cases of Fraunhover, NIST, CSIRO, AIST, and

ITRI.Tokyo: RIETI Discussion paper series 16-E-005.

Watkins, A., & Ehst, M. (2008). Science, technology and innovation capacity building for

sustainable growth and poverty reduction. Washington: The World Bank.

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