Mapping Research Systems in Developing Countries

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Mapping research systems in developing countries

Country report: the Science and Technology system in Indonesia

Project Leaders:

CREST: Centre for Research on Science and Technology, University of Stellenbosch, South Africa

IRD: Institute for Research on Development, France

Table of Contents

Introduction ...... 1

1. Scientific Activities in the Colonial Period ...... 2

1.1 Developments in S&T Policy Institutions after Independence, 1949 ...... 2

2. Universities and Human Resources ...... 6

3. Indonesia’s Main Science Institutions ...... 9

4. Indonesia’s Agriculture Research ...... 11

5. Industry and High Technology ...... 11

5.1 Aircraft Industry ...... 12

5.2 Biotechnology in Indonesia ...... 12

6. Concluding Remarks ...... 13

7. References...... 15

THE REPUBLIC OF INDONESIA

V.V. Krishna1 Professor in Science Policy, Centre for Studies in Science Policy, School of Social Sciences, Jawaharlal Nehru University (JNU), New Delhi, India

Introduction Indonesia proclaimed its independence on 17 August 1945, after more than 350 years under Dutch occupation. During this long colonial period, Indonesians frequently fought to restore their pre-colonial independence. Finally, in the early 20th century, attempts to overthrow the Dutch by force were replaced by the development of nationalist organizations that sought change and reforms through political means. The Japanese invasion in 1942 and occupation until 1945 further strengthened the determination of the nationalist movement.

The population of Indonesia in 1980 was 147.5 million, up from 119 million in 1971 and 79 million in 1961. With the present population of 179 million, Indonesia is the fifth most populous nation in the world, exceeded only by China, India, the Soviet Union and the United States. Although the population is widely dispersed throughout the archipelago, the heaviest concentrations are located in the fertile islands of Java, Madura and Bali, where the population density 1755 per square kilometre.

1 Dr Krishna is also a Visiting Professor (2004–05), Australian Expert Group on Industry Studies, University of Western Sydney, Sydney, Australia. He has a PhD in Sociology of Science from the University of Wollongong, New South Wales, Australia. Dr Krishna has more than 20 years of research experience in the areas of sociology of science, science and technology policy studies and social history of science. He has published over 28 research papers and four books. He is the founder-editor of Science, Technology and Society, an international journal devoted to S&T policy issues in the developing world.

1. Scientific Activities in the Colonial Period The first organized scientific activities in Indonesia started in 1778 with the founding of the “Batavia Society of Arts and Sciences”, a private organization for the promotion of research for the benefit of trade and agricultural development. Although in the beginning the work of its members covered all fields of science, there interest gradually shifted more and more to the social sciences. Even to the present period, the “Proceedings” of the Batavia Society of Arts and Sciences remain an important source of knowledge concerning the social and cultural life of the people in several parts of the Indonesian Archipelago.

The establishment of the famous Botanical Garden in Borgor in 1817 was the starting point of systematic botanical research. Gradually more and more research activities were carried out in other fields such as zoology, geology and marine sciences. With regard to the applied sciences, much attention was given to agricultural research especially on export crops, and later to medical research; important contributions were made in both fields.

The Universities did not have a major part in the last two decades of Dutch Colonial rule. This was understandable as the first school of higher learning was founded abroad for a university degree and so only, a small minority could pursue scientific research. Most of the research was done by the Dutch scientists and other foreign scientists employed by the Dutch. This isolation of local researchers had consequences after independence.

The other development during the colonial period was the establishment of an organization for the promotion and coordination of scientific research in 1928 by Government Decree the “Natuurwetenschappelijke Raad Voor Nederlandsch Indie” (The Natural Science Council for the Netherlands Indies). The main objective of this organization was to stimulate and coordinate research, to function as a point of contact between scientists in the country and abroad and to act as an advisory body to the Government on matters relating to the natural sciences.

Twenty years later, in 1948, another organization was created, the “Organization for Scientific Research” which was intended to become a national research council. Its primary aim was to stimulate, support and coordinate research that was important for the country. A similar organization was established for the Natural Sciences, the “Institute of Natural Sciences”. It was this latter organization, which organized the Fourth Pacific Science Congress, held in Indonesia in 1929. After the transfer of sovereignty, which took place in the last days of December 1949, Indonesia encountered a number of problems in many fields, including scientific research. Since most scientific research was done by the Dutch, after the transfer of sovereignty, many of these scientists left the country.

1.1 Developments in S&T Policy Institutions after Independence, 1949 As soon as the country proclaimed independence in 1945, a document on the ‘Constitution 1945 of Republic of Indonesia’ was issued. In this document chapter 31 assigned an important role for S&T in the development of the country. From 1950, Indonesia started its programme of expanding education at all levels and science and technology. In 1956, the government formed the Indonesian Council of Sciences to coordinate developments in S&T and to advise the government on science and technology policy.

The new regime of President Suharto, established in 1966, begun to promote science and technology for development through a planning process of Five Year Development Plans. The first Indonesian Ministry of Research and Technology (IMRT) was created in 1970. Following this, the government established the National Research Centre for Science and Technology (called PUSPIPTEK) and the Life Sciences Centre. The PUSPIPTEK even today remains the country’s main R&D research complex. In 1984, the President Suharto formed the National Research Council (NRC) by constituting members from academia, R&D institutions and industry to advise the government on S&T; and to work in close collaboration with the Ministry of Research and Technology.

Besides the developments noted above, Indonesia embarked on a planned process of development and S&T was given importance in this process. The First Five Year Development Plan (PELITA I) 1969 – 1974, carried out with the help of foreign governments and international organizations in the forms of loans grants and expertise, was aimed at getting the economy of the country out of its precarious position.

PELITA II (1974-75 to 1978-79), set out development objectives and provided directions for the desired growth process and for the order of priorities. The Second Plan focused on employment opportunities, a rising level of income, a more equitable distribution of development projects among the various regions of the country, greater economic and social integration of the region into one effective national entity and an enhanced quality of life including its environmental, cultural and nutritional aspects. With regard to the policy on research and development, focus was placed in the short term on R & D in agriculture, industry and mining. Cross-sectoral research activities in population, health education, social attitudes, communication etc, were also emphasized in this plan.

Science and technology activities during PELITA III (1979-80 to 1983-84) were grouped into pure and applied sciences, supporting each other and directed towards the requirements of short-and long-term developments. The fifth Five Year Development Plan (PELITA V) laid down the task for the National Research Council to prepare the formulation of the principal National Programme in the fields of research and technology through planning and national development strategy. This exercise evolved a national Matrix on research and technology to be followed and further developed by other national level R&D and S&T institutions. Even though the planned process and having S&T component included in the national plans continues, some of the other developments in the recent times include:  National Development Programme of 2000, which became a Law in 2002 for National System of Research and Development, and Application of Science and Technology  Mechanism and Schemes to Regulate Technology Transfer  Strategy Policy of National Science and Technology Development 2001-2005 by IMRT  Law of 2003 on National Education System  Schemes on Entrepreneurship Development and New Technology Insurance Programmes by IMRT in 2003

Among the above-mentioned policies, the National Law No. 18, 2002, on National System Research, Development, and Application of Science and Technology assumes considerable

3 importance. The government has set up the direction and research development priority as stated in the National Development Strategic Policy for Science and Technology. The present structure of Organisation of S&T is shown in Figure-1.

Figure 1: S&T Organisation in Indonesia - National Expenditure on Research

Source: Figure structured by the author. Information drawn from various websites.

In Indonesia, the predominant proportion of gross national expenditure on research and development and S&T activities is funded through government sources. Compared to other neighbouring countries such as Malaysia, Singapore, Thailand and others, Indonesia spends a relatively low proportion (about 0.2% in 2001) of its GDP budget on science. This proportion has come down drastically from 0.47% of GDP Indonesia spent on R&D in 1980. As the table 2 shows, S&T and R&D expenditure in Indonesia did not witness any significant increase between 1999 and 2002.

Table 1: GERD

GERD as % GERD by source of funds % of GDP (Column I) Business Government Higher Private Abroad Not Enterprise Education Non-profit distributed

0.05%a 14.7% 84.5% 0.2%r 0.7%

Source: UNESCO Institute for Statistics, 2001 a= partial data r= Includes Private non-profit

Table 2: S&T and R&D expenditure of Indonesia (figures in million rupees)

Sector 1999 2000 2001 2002

S&T 1061 1634 1385 1239

R&D 648 659 656 635

Source: Various websites on Indonesian S&T system

Table 3: Sources of R&D Funds in Indonesia 2000

Sources Billion Rupiah Percentage

Government 659 68.6%

Universities 54 5.6%

Private 247 25.7%

Total 960 100%

Source: Various websites on Indonesian S&T system

Indonesian S&T and R&D funding relies quite substantially on the government source of funding. In 2000-02, 68.6% of national R&D was spent by the government, 25.7% by the private industry and 5.6% by the academic sector. Even from the limited sources of extra mural R&D funds, the type of allocation made in 1999 (See Table 4) reveals that directly

5 relevant R&D components such as in universities, government laboratories etc have accounted for less than 12% and indirect NGO related R&D activities account for over 92%.

Table 4: Distribution of Extramural of Industry R&D Expenditure, 1999

Recipient Rp. Billion %

University 0.756 4.3

Government R&D Inst 0.559 3.2

Other company 0.046 0.3

Overseas 0.894 5.1

Others (NGOs, individuals, etc.) 15.248 87.1

Total 17.503 100

Source: IMRT and LIPI, 2003

As Table 5 shows, out of the R&D budget allocated to research institutions, four institutions including the one involved in Aerospace field, received substantial funding. It is clear from the above table that these four institutions are quite important for Indonesian S&T system.

Table 5: Research Institution’s R&D Budget, 2003

Non Departmental Research Institutions Rp. Billion

Indonesian Institute of Science (LIPI) 137.6

National Institute for Atomic Energy (BATAN) 78.5

Agency for the Assessment and Application of Technology (BPPT) 60.9

National Institute for Aerospace and Aeronautic (LAPAN) 51

National Coordinating Board for Survey and Mapping (BAKOSURTANAL) 4.0

National Institute for Standardization (BSN) 0.2

Source: MORT, 2005

2. Universities and Human Resources Higher education in Indonesia began at the end of the Nineteenth Century with the establishment of medical education for local doctors in Jakarta. After independence in 1949, particularly after Education Act of 1961, the country witnessed a good deal of progress in higher education. In 1950, there were 10 institutions of higher education with 6500 students. In twenty years in 1970, there were 450 private and state funded institutions of higher learning with enrolments of 237,000 students. This increased further to 900 institutions in 1990 with nearly 1.5 million students. In 2004-05, there are some 2600 institutions of higher education including 82 public institutions. However, given different

6 types of higher educational institutions, one good source indicates that there are currently 51 state/public universities (including several teacher-training institutions), 26 state/public polytechnics (engineering, commerce and agriculture) and 1,328 private higher education institutions (including academies, polytechnics and teacher training institutions). Besides, there are also Islamic higher education institutions (both private and state/public) which are under the control of the Ministry of Religious Affairs (http://www.rihed.seameo.org/hesystem/indonesiaHEsystem.htm). Table 9 below shows some important public and private universities in Indonesia. According to the estimates given by Djanali (2005), the period of 1990 and 1996 saw enrolments in public universities doubling to around 1.5 million and enrolments in private universities rose by one third to about 1.9 million. An average of 14,540 additional teachers were recruited for higher education every five years between 1968 and 1993.

Table 7 shows that both in terms of education inputs (public expenditure on education), and participation in education, Indonesia in general lacks behind its South East Asian neighbours. Indonesia lags far behind its South East Asian neighbours and the Republic of Korea concerning public expenditure and the gross enrolment ratio in secondary and particularly in tertiary education. Only as regards the adult literacy rate for both adult males and females is Indonesia on a par with the other East Asian countries, because of the vast expansion in primary education during the Soeharto era. In 1995/96, just before the Asian economic crisis, central government expenditure on education accounted for 15% of total central government expenditure or Rp. 12 trillion in absolute terms. However, in 2004 public expenditure on education accounted for only 10% of central government expenditure or Rp. 25 trillion in absolute terms. Aside from the fact, that Indonesia’s public expenditure on human resource development is even lower than the average low-income country, let alone the average middle-income country, the current education and training system in general does not meet the needs of industry. The reason is that the general secondary education system relies on rote learning, and does not develop adequate mastery of basic literacy, basic numeracy, and thinking and creative skills. (Thee Kian Wie, ‘The Technology and Indonesia’s industrial competitiveness’, Asian Development Bank, Mimeo). According to the recent UNESCO 2005, report gross enrolment ratio witnessed considerable improvement from 9.2 in 1990 to 15 in 2000 as shown in Table 8 below.

Table 6: R&D personnel

R&D Personnel Researchers

FTE Headcount FTE Headcount

51544 n/a 42722 92817

Source: UNESCO Institute for Statistics 2001

Table 7: Gross enrolment ratio, 2000/02

Country Public expenditure Primary (% Secondary Tertiary (% Male (% Female on education (% of of relevant (% of of relevant ages 15 (% ages total government age group) relevant age group) and 15 and expenditure, 2003) age group) older) older)

Indonesia 9.8 111 58 15 92 83

Malaysia 20.0 95 70 27 92 85

Philippines 14.0 112 82 31 93 93

Thailand 28.3 98 83 37 95 91

China - 116 67 13 95 87

The Republic 13.1 104 90 85 of Korea

Source: Table complied by the author

Table 8: Gross Enrolment Ratios 1970-2000

1970 1980 1990 2000

Secondary Education 16.1 29.0 44.0 57.0

Higher Education 2.5 3.8 9.2 15.0

Source: UNESCO (2005)

Table 9: Main Universities in Indonesia

Public Universities Private Universities

Sebelas Maret University, Surakarta Atma Jaya University, Jakarta Electronics Engineering Polytechnic Institute of Bina Nusantara University Surabaya, Surabaya Universitas Kristen Duta Wacana (UKDW), Institut Teknologi Sepuluh Nopember, Surabaya Yogyakarta Institut Seni Indonesia, Yogyakarta International University, Jakarta Institut Pertanian Bogor, Bogor Maranatha Christian University, Bandung Universitas Pakuan Bogor, Bogor Petra Christian University, Surabaya Universitas Terbuka Sekolah Tinggi Seni Indonesia Surakarta, Cenderawasih University, Jayapura Surakarta University of Airlangga, Surabaya STT Telkom, Bandung Diponegoro University, Semarang Tarumanagara University, Jakarta Gadjah Mada University, Yogyakarta Trisakti University, Jakarta University of Indonesia, Jakarta Universitas Islam Indonesia, Yogyakarta Universitas Padjadjaran, Bandung Universitas Katolik Parahyangan, Bandung Institut Teknologi Bandung, Bandung Universitas Kristen Indonesia, Jakarta Andalas University, Padang Universitas Kristen Satya Wacana, Salatiga Syarif Hidayatullah State Islamic University, Universitas Muhammadiyah Makassar, Makassar Jakarta University of Surabaya, Surabaya Syiah Kuala University, Banda Aceh HKBP Nommensen University, Medan Brawijaya University, Malang Methodist University of Indonesia, Medan University of Jambi, Jambi Swiss German University, Tangerang, West Java Hasanuddin University, Makassar University of Palangkaraya, Palangkaraya Tadulako University, Palu Lambung Mangkurat University, Banjarmasin Padang State Polytechnic, Padang Jakarta State Polytechnic, Jakarta Haluoleo University, Kendari State University of Papua, Manokwari State University of Medan, Medan

Source: http://en.wikipedia.org/wiki/List_of_universities_in_Indonesia

3. Indonesia’s Main Science Institutions As noted earlier, Indonesia remains behind many Asian countries in several important aspects. One important indicator, which shows low importance and national effort in R&D and S&T, is the low level of spending for R&D, which was less than 0.2 percent of GDP during 2000-02. This level of funding for R&D is much lower than several South Asian and South East countries. Public spending on education was also low by Asian standards, despite the rapid expansion of the educational system.

The State Ministry for Research and Technology has the responsibility for coordinating R&D policy in Indonesia but has little control over the allocation of research expenditure. The Ministry operates a number of competitive grants and other programs for funding research, especially for universities. Budgets for government research institutions are allocated either through Ministries or directly through non-department agencies. The most important non-department research institutions include the Agency for Assessment and Application of Technology (BPPT) for industrial technology, the Indonesian Institute of Sciences (LIPI) for basic sciences, the Central Statistics Agency (BPS), the National Nuclear Energy Agency (BADAN), and the National Institute for Aeronautics and Space (LAPAN). Nevertheless, agriculture remains the highest priority for government-supported research. IAARD in the Ministry of Agriculture is the largest government research agency in Indonesia with over 3,000 researchers (Table 8). Together with IPARD (estate crops), FORDA (forestry) and the Centre for Fisheries R&D, agriculture receives by far the largest allocation of research staff by government research institutions. Table 8 lists Indonesia’s main science agencies, their fields of activity and research staff in the respective institutions. As can be seen agriculture and related research constitutes the predominant segment of the national S&T effort. As can be seen from the table below, Indonesia maintains two frontier based R&D institutions, namely aerospace and nuclear related research that both constitute 1800 full time researchers.

Table 10: Major government research institutions in Indonesia 1995-2000

Name of Research Institution Fields of activity Research staff*

Indonesia Agency for Agricultural Research and Agricultural crops and 3063 Development (IAARD) livestock

Central Statistics Agency (BPS) Statistics 1343

Agency for Assessment and Application of Industrial Technologies 2074 Technology (BPPT)

Indonesian Institute of Sciences (LIPI) Basic sciences 1692

National Nuclear Energy Agency (BADAN) Nuclear Energy 1314

National Institute of Aeronautics and Space (LAPAN) Aeronautics and space 487

Forestry Research and Development Agency (FORDA) 486

Indonesian Planters Association for Research and 429 Development (IPARD)

Centre for Oil and Gas Technology Research and 343 Development

Agency for Trade and Industry Research and 328 Development

Centre for Fisheries Research and Development 308

National Coordination Agency for Survey and 239 Mapping (BAKOSURTANAL)

*Research staff includes those with University degree (B.Sc., M.Sc., or Ph.D.). Data are from 1995-2000.Sources: RISTEK (1996, 2002); IAARD (Statistik Penelitian Pertanian: Sumberdaya, Program dan Hasil Penelitian, 2000).

4. Indonesia’s Agriculture Research In Indonesia, the central government is the primary source of funds for agricultural research. The international agencies and donor institutions played a major part in developing agricultural research in Indonesia, especially during the 1980s and early 1990s. This was the period when Indonesia’s capacity in agricultural research was established. IAARD is the primary body responsible for conducting and coordinating crop and livestock research in the country. Research institutes for estate commodities are managed by the Indonesian Planters Association for Research and Development (IPARD). IPARD, though largely autonomous and self-financed, is nominally under the guidance of IAARD. Forestry and fisheries research were separated from IAARD when the Ministry of Forestry and Ministry of Marine Affairs and Fisheries were created. The principal role of universities in agricultural research has been to train the scientific and technical personnel employed in government research institutes and the private sector.

International agricultural research centres play an important role in Indonesia’s agricultural research system. There are a number of international research agencies conducting research in Indonesia. These are the Centre for International Forestry Research (CIFOR) and the SE Asia regional offices of the International Centre for Research on Agro-Forestry (ICRAF) and the International Potato Centre (CIP). The UN ESCAP CGPRT Centre, which conducts socioeconomic research on secondary food crops, and the ASEAN-funded South East Asia Regional Centre for Tropical Biology (BIOTROP) are also located in Indonesia. IAARD has cooperative research arrangements with several other international agricultural research centres as well (including AVRDC, CIMMYT, ILRI, and IRRI) and agricultural research institutes in Japan, Europe, North America, and Australia. IAARD established a semi-autonomous foundation in 1999, the Intellectual Property and Technology Transfer Management Office (IPTTMO), to help commercialize IAARD innovations. This office has responsibility for patenting and licensing IAARD innovations to private firms.

5. Industry and High Technology Although Indonesia's rapid industrial growth and transformation during the past three decades was undoubtedly accompanied by technological upgrading, particularly since the mid-1980s, the development of Indonesia's industrial technological capabilities (ITCs) has lagged behind that of other Asian neighbours, particularly the Republic of Korea and China. These low ITCs are, amongst others, reflected by the low percentage of high technology exports of Indonesia’s manufactured exports, as compared to those of the other East Asian countries (Table 11)

Table 11: The amount and percentage of high technology exports of selected East Asian countries, 2003

Country High-technology exports (millions of US$) Percentage of manufactured exports

Indonesia 4580 14

Malaysia 47042 58

Singapore 71421 59

Thailand 18202 30

China 107543 27

Source: World Bank: World Development Indicators, 2005, table 5.12, pp. 314-8. Note: High technology exports are products with high R & D intensity, as in aerospace, computers, pharmaceuticals, and scientific instruments.

5.1 Aircraft Industry Under the leadership of the then minister of state for research and technology, Bacharuddin J. Habibie, the government attempted to move into aeronautics with foreign technological assistance in the 1970s. The Archipelago Aircraft Industry (IPTN) was established in 1976 to assemble aircraft under license from Construcción Aeronauticas of Spain, and helicopters under license from Aerospatiale of France and Messerschmitt of Germany. In 1979, IPTN designed and produced a 35 passenger aircraft (CN-235) with the Spanish partner. This plane was produced from 1986 when IPTN had delivered 194 aircraft, almost entirely to domestic buyers. In 1994, IPTN rolled out its first independently designed aircraft, a 50 passenger commuter aircraft (N250) (Soedarsono et al 1998). IPTN is valued at US$3 billion in 1998 and among its 15,000 employees about 2,000 were university graduates. (http://countrystudies.us/indonesia/71.htm & U.S. Library of Congress)

5.2 Biotechnology in Indonesia Modern biotechnology in Indonesia was institutionalised in October 1994 with the establishment of the Biotechnology Consortium (IBC). The aim of IBC is to actively engage in mastering, developing and making use of the benefits of biotechnology for the people, country and environment conservation. These activities are conducted by building up:  Promoting cooperation among government and private institutions working in the field of biotechnology,  Communication and synergistic cooperation with foreign institutions in the field of biotechnology which are related, and  Assisting government in developing of sectors that relate to biotechnology.

At present, more than 34 institutions belong to the government and private sector working in the field of biotechnology. (www.binasia.net/binasiadownload/downloadFile.asp?). In 2005, the country hosted the BINASIA-Indonesia National Workshop to promote active participation of biotechnology-stakeholders in the Network and international cooperation among participating countries. One of the objectives of this workshop was to deliberate the status of biotechnological developments and the national priority areas of Indonesia.

However, although the country is working in the area of biotechnology but a government policy on this is yet to be issued.

Table 12: S&T Publications from the Web of Science (SCI)

1998 1999 2000 2001 2002 2003 2004 2005

Bangladesh 324 359 346 389 423 471 430 501

PR China 18833 23398 29004 33206 38469 46900 47306 56,524

India 16037 17104 15983 17501 18525 20803 20830 21,164

Indonesia 342 381 422 486 395 489 455 560

Japan 68585 70435 69773 70215 71207 78046 69433 66,411

Korea 10458 11894 13200 15519 16642 20529 21939 23,004

Malaysia 798 869 814 922 934 1171 1254 1,586

Mongolia 34 38 45 39 41 105 97 54

Pakistan 601 577 596 531 691 763 903 1,060

Philippines 311 344 351 315 410 440 424 486

Singapore 2490 3046 3392 3802 4238 4846 5109 5,419

Sri Lanka 124 168 167 157 176 264 226 290

Taiwan 8745 9152 9346 10780 11011 12675 13146 14,057

Thailand 935 1043 1185 1331 1591 2048 2047 2,543

Vietnam 239 249 322 356 346 497 412 573

Total 128856 139057 144946 155549 165099 190047 184011 196,237

Source: Table complied by the author

6. Concluding Remarks Indonesia witnessed a number of crises during the last decade. First the Asian financial crises of 1990s and then the Tsunami and a number of other natural disasters affected the economy in a number of ways. To some extent, these compounding problems diverted the attention of government away from the growing needs and demands of the R&D system.

The current investment of around 0.2% of GDP on R&D is very inadequate to meet the objectives and challenges outlined in the government’s S&T policy, particularly those concerning the new technologies. In a relative sense, much of Indonesian strength in innovation is in the agriculture and related areas of research. In a situation of low levels of R&D investment and efforts during the last three decades, over emphasis on developing high technology and high capital-intensive sectors such as nuclear and aviation industries has further compounded the S&T and R&D problems for Indonesia. This resulted in the spreading of thin financial resources to a number of R&D projects without having to witness

13 any reasonable degree of success and output. As can be seen from Table 10, compared to other South East Asian neighbours, Indonesian R&D output as measured in research papers is quite low for the period 1998 and 2005. Indonesian output is comparable to countries such as Bangladesh, Vietnam and Sri Lanka. Secondly, one sector that has showed some promising results has been the manufacturing sector. Given the growing challenges of new technologies and the importance of ICT and BT, the government needs to increase the R&D/GDP ratio to at least three times to 0.6% in the coming three to five years. Government need to evolve institutional innovations in S&T policies to mobilize private sector industry to invest greater sums in R&D.

7. References Soedarsono, A.A., Susan, L.M. and Omurtag, Y. (1998), ‘Productivity Improvement at a High- Tech State-Owned Industry – An Indonesian Case Study of Employee Motivation’, IEEE Transactions on Engineering Management, 45(4). Aiman, S. Hakim, L. and Simamora, M. (2005), ‘National Innovation System of Indonesia: A Journey and Challenges’ Paper presented at the Seminar at AEGIS, UWS, Sydney, 2005.