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Universitas Airlangga
President Joko Widodo issued Presidential Decree No. 15 of 2021 concerning the National Movement for Proudly Made in Indonesia (Gernas BBI) on September 30th. The Coordinating Minister for Maritime Affairs and Investment faces a daunting task: making local products a mainstay in Indonesia. This is certainly strategic for Indonesia, considering that all developed countries pride themselves on their domestic products. Indonesia Maju 2045 is only 24 years away, and strategic policies are needed to support it.
What should Indonesia do?
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Various terms are used for developed countries. The IMF calls it ????????????????????????????????? ?????????????????????????????????, UNDP calls it ??? ...
It took Japan and Singapore 12 years to become developed countries and escape the MIT trap. A trap that indicates a situation where middle-income economies tend to face slowing growth and consequently fail to join the developed world club. Meanwhile, Hong Kong and South Korea took 14 years.
Some countries are trapped in the MIT trap, entering the developed world for just a few years before slipping away, such as Argentina and Brazil. China is at the forefront of escaping the trap, with a GDP per capita of US$1,500 (2020), after taking 20 years to surpass US$1,000. Meanwhile, Malaysia, which started 44 years ago, is pursuing the same level (2020 – US$10,402).
Indonesia reached US$3,870 in 2020. If Indonesia's average economic growth rate is similar to that of the past 10 years, it will take 64 years for Indonesia to reach the current minimum threshold. Unfortunately, the threshold is also volatile, and could reach US$19,281 in 2045 (the average growth rate over the past 20 years). Therefore, resource mobilization and strategic planning are needed to enable Indonesia to join the club of developed nations. To achieve this, the Indonesian economy needs to grow at more than 6.4% per year for the next 24 years.
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In his latest book (2019), Keun Lee argues that the economic growth of developed countries is correlated with higher education and innovation capacity. Innovation capacity is developed through human resources (higher education) and R&D budgets. A clear pattern exists that higher R&D budgets enable universities to explore new ideas and develop science-based innovations. Furthermore, collaboration with companies can lead to the development of innovative, patent-protected products with higher added value.
Clearly, developed countries have substantial R&D budgets to consistently develop innovative products. In terms of percentage, Israel (4.30%) and South Korea (4.20%) are the two largest spenders of R&D budgets as a proportion of their GDP. The United States, Japan, and China remain high, while Indonesia's share is only 0.10%. In dollar terms, the United States is the largest spender (US$491.86 billion), followed by China (US$471.70 billion) and Japan (US$154.16 billion). Meanwhile, Indonesia's share is only US$3.11 billion, and the results clearly show that these countries' patent applications far outnumber Indonesia's. Japan has over 7,005 times more patent applications than Indonesia, while Malaysia has 90 times more, with a 13 times larger R&D budget percentage.
Higher education prepares human resources to become a developed nation. The Meiji Restoration in Japan developed human resources through imperial universities. These top universities became the engine of Japan's dominance in science-based innovation. The US and UK's dominance in science and technology is also supported by renowned universities. Referring to the ??????????????????????? ??? ...
In the last 25 years, China has seriously developed its universities to be world class through 211 ????????????????????????????, ????9 ????????????????????????, and the latest ???????????????????????? ?????????????????????-???????????????????? ??????????????????????????????????????? ??????????????????????????????. In the Top 100, there are 6 universities from China, while South Korea places 2 universities. The highest universities from Malaysia are in the range of 301-350, while Indonesia is in the range of 801-1000. It is not surprising that China has 122 times more patent applications than Indonesia. China has great energy for innovation, in addition to having competent human resources in world-class universities, it is also accompanied by a large Chinese R&D budget.
Indeed, Indonesia will experience a demographic bonus in 2035. However, without world-class processors (universities), it is estimated that innovation capabilities will not be able to support Indonesia in becoming a developed country.
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Indonesian leaders need to establish strategic policies that enable us to produce innovative products created by our nation's children. This begins with understanding the reality that our R&D budget is far below the standards of developed countries. Furthermore, Indonesian universities, as ???? ...