Jakarta. The World Bank announced Indonesia as the 10th largest economy in the world last week, jumping six ranks from its previous place, yet the country still lags in technological innovation, which is key to becoming a great nation, officials and experts say.
The country is home to seven state organizations in science and
technology, including the Indonesian Institute of Sciences (LIPI); the
Agency for the Assessment and Application of Technology (BPPT); the
National Nuclear Energy Agency (Batan); the National Institute for
Aeronautics and Space (Lapan); the National Geospatial Information
Agency (BIG); the National Standardization Agency (BSN); and the Nuclear
Energy Regulatory Agency (Bapeten).
However, experts believe that the nation’s technological innovations
continue to fall far behind those made by its neighboring countries,
such as Singapore and Malaysia. Government funding for research and
development amounts to less than 1 percent of the annual state budget,
or Rp 6.5 trillion ($564 million) per year, according to Ridwan
Djamalludin, deputy chairman of the BBPT’S natural resources technology
Data from the World Bank showed that Indonesia spent the equivalent
of 0.08 percent of its gross domestic product on research and
development in 2009. Meanwhile, Malaysia and Singapore spent 1.01
percent and 2.43 respectively in the same period.
Indonesia, however, jumped 12 spots to stand at 64th place this year
from 76th last year on the Networked Readiness Index, according to data
from the World Economic Forum. The index, which includes 148 countries,
measures the propensity for countries to exploit the opportunities
offered by information and communications technology (ICT) on a scale
from 1 (worst) to 7.
Indonesia scored 4.04, while neighbors Singapore claimed second
place and Malaysia 30th with their respective scores of 5.97 and 4.83.
“If we want to be a great nation we need to be innovative and creative,”
said Idwan Suhardi, adviser at the Ministry of Research and Technology,
alluding the importance of technological innovations for the country’s
Idwan went to greater lengths by saying that Indonesia could avoid
the middle-income trap — when a country reaches a certain income level
and gets stuck there — with the help of enhanced technological
innovations that are yet to exist. Echoing those sentiments, Ridwan said
innovative, technological advancements would also help the country in
adding value to its rich natural resources and creating a better system
of education for the country’s human resources.
Ridwan pointed out that the development of our technology heavily
depends on its people, from the analytical minds of scientists to the
physical brawn of laborers. “Development requires a lot of people
working together. And we have over 240 million people in this country,”
With such a large population, he added, the country has a big
potential market for business communities wanting to make a profit from
innovative products. According to the BPPT, only 0.24 percent of 53
million entrepreneurs in Indonesia are technopreneurs. With huge
potential in the domestic market, local entrepreneurs should seize the
“The future of Indonesia and the future of innovation goes hand in
hand,” said Niclas Adler, president of Indonesia International Institute
for Life Sciences. Adler emphasized a number of points supporting the
importance of technological innovations to Indonesia’s welfare
development, namely, both financial and innovative powers coming to
Asia, especially to Indonesia, with its growing consumptive middle
income class; the rich natural resources waiting to be capitalized; the
need of a change in mindset by being open-minded to new approaches in
technology; and also real actions from the government.
Indonesia, according to experts, is still classified as a nation
unable to contribute to developments in technology, though they are
optimistic the country would be able to climb out of that box and become
a world producer of innovative products.
“The items we use daily, such as handphones, zippers and so on, are
the results of innovation, of innovative thinking. Our country, as of
now, is still a consuming
nation,” Idwan said.
Both Ridwan and Idwan mentioned the country’s failure to utilize its
natural resources in creating new technology; instead Indonesia exports
raw materials at a low price to countries who will use them make
interesting, coveted products, then ship them back to us at sky-high
However, they remain optimistic on the country’s ability to become a producer of such items, not just a consumer.
“In terms of creativity and capacity, we are currently unable to do
that. But, we have the potential to reach that level,” Ridwan said,
adding that innovations should start from a very basic level, such as
producing high-quality rice, instead of importing the staple from
“If we are consistent on [enhancing innovation] and with a demographic
bonus, I think we can start [producing our own innovations] in the next
10 to 15 years,” he said.
Ridwan went om to emphasize that the country needs to improve its
supporting infrastructure and government policies in order to become a
producer of innovative ideas and technology.
“Innovation is not only the responsibility of the government but also
of the business communities and academia,” Ridwan said, adding that a
joint venture would be needed in making significant advancements. The
government budget for research and development, he said, is still
inadequate to support the development of innovative technology, which is
why the country needs to reach out and seek help from foreign, private
“Ideally, government spending on R&D [research and development]
should be 3.5 percent of the country’s GDP. And because our government’s
budget is not adequate enough, the remaining 2.5 percent could come
from the private sector; that’s why the model should be like the triple
helix,” Idwan said.
The triple-helix model, a trademark concept of the Swedish Innovation
System, involves a close cooperation between three axes, namely
academia, the private sector and the government, in finding and solving
new innovation challenges. Swedish experts claimed that the concept,
whose home country ranked third in the 2014 NRI and spends 3.6 percent
of its GDP on research and development, could help Indonesia in the
development of its technological innovations and research.
Adler said the triple-helix model needs a great level of trust
between the private and public sectors of Indonesia. It also requires a
working collaboration between all parties included in the triple helix.
The greatest obstacle to innovation, according Ridwan, is the
industry’s mindset, which leans toward commerce and profit. “Indonesia
can change the role it plays in the world; from a mere consumer of
technology to a producer of quality, next generation products,” Adler
Swedish ambassador to Indonesia, Ewa Polano, said Indonesia has what
it takes to become a world leader in developing new technology, with
access to existing machinery, a large pool of human resources and a
growing interest from the younger generation.
The Indonesian government, its private sectors and universities also
possess the ambition needed to raise current standards of technology,
she said. “You have the necessary platform for educating people and
improving the methods of learning across the country. With 20 percent of
[the state’s] budget allocated toward education, you have a very
promising platform,” she said.