EVENTS

R&D Country Profile Indonesia

Overview

During the last decade, the world’s fourth most populous country was slowly recovering from economical and political crisis which was accompanied by a severe drought and forest fires in the late nineties. Indonesia was the country hardest hit by the East Asian Financial crisis which fuelled social tensions and led to what is today called the Indonesian revolution in 1998. The following government managed to rebuild the functionality of the governmental bodies and – getting along with the International Monetary Fund – managed to stop the economic downturn. Although still facing socioeconomic problems in some parts of the country, Indonesia is a major economic player in the region and very engaged in the development of economic capacities, one of them being research and development.

Indonesia is the largest economy of Southeast Asia and a member of G-20 major economies. Indonesia's estimated gross domestic product (nominal) for 2008 was US$511.7 billion with estimated per capita GDP PPP was US$3,979 (international dollars). The service sector is the economy's largest and accounts for 45.3% of GDP (2005). This is followed by industry (40.7%) and agriculture (14.0%). However, agriculture employs more people than other sectors, accounting for 44.3% of the 95 million-strong workforce. This is followed by the services sector (36.9%) and industry (18.8%).  Major industries include petroleum and natural gas, textiles, apparel, and mining. Major agricultural products include palm oil, rice, tea, coffee, spices and rubber.

Research Policy

Although Indonesia has identified R&D as a main driver for developing its economy, the effort to promote national R&D has been reduced sincerely after the financial crisis in the 1990s and hardly increased since then. For 2010, the Indonesian government has allocated Rp 1.9 trillion for R&D, which is less then one percent of the total state expenditure. However, President Yudhoyono commentated that this is double of the Indonesian R&D expenditure allocated five years ago and that “the government will continue to increase the budget percentage to reach an adequate figure” (Yudhoyono in “Jacarta Post” as published on April 8, 2010).

In this spirit, the State Ministry of Science and Technology’s (RISTEK) mission statement points to S&T ‘as the main force for sustainable prosperity’ and explicitly adopts the concept of National Innovation System (NIS) in its statement, with the objective of ‘creating a solid national system of innovation for increasing the global competitive ability’. The mission statement bows further to the NIS approach by pointing to the need to ‘increase Science and Technology diffusion through the consolidation of the network of its actors and institutions, including the development of its mechanism and institutionalization of its intermediary’. In order to achieve these goals, RISTEK is required to ‘build quality and competitive human resources, infrastructures, and institutions for Science and Technology’ (http://www.ristek.go.id/).

A number of S&T policies and programmes reflect the objectives and instruments of the Indonesian government. While the upcoming Mid-term Development Plan (NMDP) for 2010 – 2014 of the newly reelected government is yet not submitted for parliamentary approval, the most recent five-year plan to promote S&T activities is the NMDP for 2004-2009, which has the following objectives:

• To sharpen R&D and engineering priorities in S&T to be oriented towards the demand of the private sector and the need of society, following a clear roadmap.
• To enhance S&T capacity and capability by strengthening S&T institutions, resources and networks at the central and regional level. 
• To create a suitable innovation climate with an effective incentive scheme to foster industrial restructuring.
• To implant and foster S&T culture in order to enhance Indonesia’s civil development (Taufik 2007: 7).

The S&T priorities included in the NMDP (called ‘Six Focus Programs’ on RISTEK’s website) are 1) food security, 2) new and renewable energy, 3) transportation system and management, 4) ICT, 5) medicine and health technology, 6) defence technology. For each area the government has published a ‘White Paper’ which sets quantitative targets for each priority for different periods and defines the role of the government, Government Research Institutes (GRIs), and universities (Simamora and Aiman 2006). Regarding the geophysical and meteorological characteristics of the archipelagic State, Disaster Risk Reduction and Climate Change play a crucial role in the national Long-term Development Planning 2005 – 2025 (National Development Planning Agency 2009).

The NMDP includes several programmes. For instance, the S&T Research and Development Programme aims to advance the quality of national R&D activities in the fields of basic and applied sciences. The objective of the S&T Diffusion and Utilization Programme is to enhance the dissemination and utilisation of research findings by the corporate sector and society. The S&T Institutional Strengthening Programme fosters S&T-related organisational capabilities and the Production System S&T Capacity Enhancement Programme enhances the technological capacity of production systems in the corporate sector (Taufik 2007: 7). 

Some S&T support programmes concentrate on the development of new technologies, for example: 

• RUT (funding of basic and applied research by GRIs)
• RUKK (funding of research in humanities and social sciences)
• RUTI (funding of research by Indonesian scientists in bilateral projects with foreign partners)

In addition, there are various programmes which aim to support the introduction of new technology in the manufacturing industry, to strengthen the framework conditions and the supply of information on existing technologies (GATE 2006: 25-6).

Structure of Research System

A characteristic of Indonesia’s S&T policy and system is the large number of actors, including governmental and research institutions. Ministries other than RISTEK are involved in policy making as well, and some have their own (departmental) research institutes. In addition, seven non-departmental research institutes report directly to the president and are coordinated by RISTEK (GATE 2006: 18-9):

·          BBPT (Agency for the Assessment and Application of Technology)

·          LIPI (Indonesian Institute of Sciences)

·          LAPAN (National Institute of Aeronautics and Space)

·          BATAN (National Nuclear Energy Agency)

·          BAKOSURTANAL (National Coordination Agency for Surveys and Mapping)

·          BSN (National Standardization Agency of Indonesia) 

·          BAPETEN (Nuclear Energy Control Board)

The role of the BBPT is to formulate and implement policies for industrial and technology development. Some of the non-departmental research institutes are centrally administered by the Center for Research, Science and Technology (PUSPIPTEK), located at Serpong near Jakarta. Six BBPT laboratories and four LIPI institutes were initially established in this science city (Gammeltoft and Aminullah 2006: 170). The number has increased to 30 institutes, which jointly employ a total staff of 3,000 (PUSPIPTEK 2008). In 2004, the biggest number of researches at non-departmental research institutions, which numbered at 1,370 researchers (37%), worked at the LIPI. Another research institute of national importance is the Eijkman Institute of Molecular Biology, originally founded in 1888 by the Netherlands. In order to support research in biomedical and biotechnology, the institute was reopened in 1992/93, concentrating on tropical diseases (GATE 2006: 18-20).   

To better coordinate the various S&T policies and programmes, the NRC was established in 2002. The 108 NRC members come from academia as well as from the business sector and the government, and are specialised in the S&T areas of the ‘Six Focus Programmes’. As an advisory body, the NRC develops policy suggestions and recommendations. The NRC has just published a report evaluating the 2005-2009 National Research Agenda. The council acts as an intermediary between industrial needs and the national research agenda. Due to Indonesia’s large geographical size, regional research councils (RRCs) exist also at the local level, and are designed to coordinate regional S&T policies. In an assessment of Indonesia’s innovation challenges, the NRC comes to the following conclusions: The problems at the national level are the predominance of public R&D, sector-development approaches, weak linkages among S&T actors, few techno-economic cluster initiatives, and limited access to knowledge pools. The reasons for these shortcomings are presented in the report as 1) a lack of policy coherence on the national and local level, 2) the absence of an innovation policy and 3) the poor basic conditions of the innovation system in terms of quality of education, infrastructure, law enforcement and asymmetric development (NRC 2008).

More detailed Information about European-Indonesian cooperation is provided by the indonesian project partner RISTEK here

Key Research Indicators

Comparative Indicators

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