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1 ,PSURYLQJÃ,QQRYDWLRQÃ&DSDFLW\ 3ROLF\Ã&KDOOHQJHVÃIRUÃ,QGRQHVLD :LG\DQWRNRÃ6XPDUOLQ &HQWHUÃIRUÃ,QQRYDWLRQÃ3ROLF\ $JHQF\ÃIRUÃWKHÃ$VVHVVPHQWÃDQG $SSOLFDWLRQÃRIÃ7HFKQRORJ\ 2(&',36Ã:RUNVKRS *UDQGÃ&RSWKRUQHÃ+RWHOÃ6LQJDSRUH Ã1RYHPEHUÃ Presentation Outline o Present challenges for Indonesia o Structural and technological drivers o Domestic change: decentralization o Key policies in the past o Directions for change o Principles for success UHVHQWÃ&KDOOHQJHV 1
2 Structural Drivers o Globalization o Homogenization of markets o Fierce competition Technological Drivers o Cost of R&D o Complexity of products o Speed of technological developments o Widespread use of ICT Decentralization of Power o Greater local autonomy at the district levels, but o Lack of qualified administrative skills o Competition rather than sharing scarce resources o o Tendency to rely on natural resources Difficult to identify local advantages o Differences in education/skills, infrastructure, market power, and culture Technical Capability Complex products Japan Korea Singapore Taiwan, China Acquisition Adoption Assimilation Innovation Creation Indonesia Simple products
3 .H\Ã3ROLFLHVÃLQÃWKHÃ3DVW Phase I: Building State Enterprises and Institutions Industrialization was to support the agricultural sector and the oil and gas industry Fertilizer plant, pesticides plant, steel and aluminum smeltering plant, etc. Development of R&D institutions National Science Institute (67) National Atomic Energy (68) National Coordinating Agency for Survey & Mapping (69) National Institute for Aeronatics and Space (74) Agency for the Assessment and Application of Technology (78) Phase II: Deliberate Knowledge Acquisition for Selected Industries Progressive manufacturing plan for 10 stateowned enterprises (Ministry of Research and Technology) Aircraft, shipbuilding, trains, steel, engineering, electronics, light armaments, explosive devices, etc. Promoting fellowships for overseas higher education Localization policies for other selected industries: automotive, machine tools, and consumer electronics industry (Ministry of Industry)
4 Key Accomplishments Strategic enterprise: Aircraft industry Phase 1: learning to manufacture NC 212 two-engine, 19 passenger airplane Phase 2: integrating new technology CN 235, co-design and new componentry Phase 3: development of new designs, products or processes N250, 50 seater, fly-by-wire technique Private enterprise: Local content for the automotive industry Most cases Government plans to help industries do not meet targets Industrial innovation still occur even when protection subsides Case of Texmaco entry into the automotive sector, initially a textile manufacturer Polytron, a local TV manufacturer, getting a patent in the US Local cosmetic manufacturers H\Ã'LUHFWLRQVÃIRUÃ&KDQJH 4
5 DIRECTIONS FOR CHANGE 1 Strategic Role in Industrial Development Changing the Structure of Industrial Production Changing the Knowledge Base Supporting Production 2 Dominant Technological Aim To Supply Technologies for Industry To Strengthen Industrial Capabilities for Creative and Competitive Technology Use Main Organisational Agents 4 S&T Institutions Industrial Firms Role of the Public Sector 5 Dominant Subsidiary Key Areas of Policies Education and Industrial training How do you fashion a lifelong training? Effective knowledge acquisition from foreign sources Improving knowledge transfer within usersupplier link Stimulating industrial innovation Stimulating industrial R&D Financing of innovative projects
6 Some Current Initiatives Efforts of changing public research institutions to become more corporatized Experiments with three leading public universities Encouraging spin-offs Venture capital financing PT. PNM leading the charge Incentive-based programs for stimulating technical cooperation among SMEs Lessons from local initiatives Principles for success (Lessons from other countries) Policy coherency Policy consistency Flexible to meet changed circumstances Skilled administration
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