Research, Strategic Industries and Indonesian Economic Transformation
Badri Munir Sukoco
Professor, Faculty of Economics and Business, Universitas Airlangga
Visiting Professor, University of Skovde, Sweden
In his appointment speech as President, Joko Widodo conveyed 5 strategic issues that would be addressed by the Advanced Indonesia Cabinet. One of them is economic transformation. Changing from dependence on natural resources to modern manufacturing and services that are competitive and have high added value. Being competitive with high added value is the key to success for Indonesia to get out of the middle income trap, the vision proclaimed by the Government in the 2020-2024 Medium Term Development Plan (RPJMN).
Richard Florida (2012) stated that a nation will be competitive and have high added value if it is able to transform its dependence on natural resources, cheap labor and capital into a creative economy. Not only limited to technology, but also those related to art, culture or new services.
Each country has a strategy for building its creative economy. One of them is South Korea, which since the 1980s has developed its music and film industry, and is currently spreading hallyu (Korean fever) throughout the world. Not only culture, they are also superior in high technology (digital communication and its related components) and plastic surgery with film and music stars as endorsers.
The impact was also felt in the tourism sector, through the visits of 15.35 million foreign tourists (2018) who were interested in scenes from Korean dramas and popular boy/girl band concerts. With an average spending of US$1,268 per tourist, the economic value of the tourism sector is US$19.63 billion (equivalent to Rp. 272.49 T or one tenth of Indonesia's 2020 APBN). This condition has made South Korea escape from the middle income trap from 2002 until now.
Their success certainly did not come suddenly, but through a long and comprehensive process. Even though at the beginning they imitated Japan (both in its music, film and technology industries), gradually the innovations they produced became a world reference. Of course, research support that focuses on certain topics and downstreaming that is integrated with industry is one of the backbones for the success of their creative economy. For example, the topics of photocatalysis, artificial intelligence, and cognitive radio have become the most research topics produced by Korea in the last 10 years. As a result, the World Intellectual Property Organization (WIPO) recorded that the most patents produced by Korea were regarding digital communications, followed by electrical machinery and energy, then computer technology.
The question is, what must Indonesia do so that the products of research institutions and universities align and support the transformation of Indonesia's creative economy?
Research in Indonesia
One of the key performance indicators (KPI) of the Ministry of Research, Technology and Higher Education (Kemenristekdikti) in the 2014-2019 Working Cabinet is to place 5 Indonesian universities (PT) in the Top 500 in the world. The indicator that has the greatest weight in the 2 most popular ranking institutions, either Quacquarelli Symonds (QS) or Times Higher Education (THE), is the quality of research indexed in the Scopus database. This is the main focus of the Ministry of Research, Technology and Higher Education to increase the quantity of publications from universities in Indonesia.
Through Minister of Research, Technology and Higher Education Regulation no.
20 of 2017, all professors and associate professors are required to publish in journals indexed in Scopus. Even the Chancellor of a university that is targeted to be in the world's Top 500 moved first by requiring all Masters and Doctoral graduates to have publications in Scopus. This condition has provoked many pros and cons among the academic community, but Scopusization continues. With varied but encouraging publication incentives, it makes it easier for the Chancellor to direct his academics to publish. The result? There has been an extraordinary surge in publications, especially in PT Cluster 1 according to the Ministry of Research, Technology and Higher Education. Five universities (ITS, UNAIR, UB, UNDIP, and UNS) produced 80% of the total publications throughout their existence in the last 5 years. Even at UI, ITB and UGM, >60% of the total publications occurred in the last 5 years. Although most still rely on proceedings indexed in Scopus (>60% belong to UNS, ITS and ITB), UI reaches >49% of its total publications.
Surprisingly, there is no focus on existing research, and it is spread across a variety of topics. The top five research topics conducted by Indonesian academics (>1,000 publications) are Indonesia, Malaysia, Thailand; followed by industry, research, marketing; algorithms, computer vision; students, science, and learning; and corporate social responsibility and corporate governance. Other research topics are interesting and important, especially those related to technology, but their numbers are relatively small. The variety of topics is due to the fact that the Government and HEIs are free to carry out research topics, as long as they can be indexed in Scopus.
Of course this is different from what other countries do, for example China. Since launching Made in China 2025, 10 strategic industries have been determined to be the locomotive of economic growth to escape the middle income trap. Scival data (scientific publication database with coverage: +14,000 research institutions, +230 countries, +48 million scientific papers on 1,433 topics) shows that in these 10 fields, the quantity of publications by Chinese scientists is very dominant.
For Artificial Intelligence, 95,722 scientific works were produced during 2009-2018 (for comparison, all scientific work topics produced by Indonesian scientists in the same period were 99,795). The US produced 38,117 scientific papers, while India only had half as many as the US. The Chinese Academy of Sciences (CAS) has the largest contribution, followed by the Ministry of Education of China (MOE-C), only existing universities (Tsinghua, Beihang and others). Currently, 3% of Chinese scientists' scientific work is used by companies. It is not surprising that the largest patents filed by China are in the field of digital communications and computer technology, and the total number of patents filed is 3 times more than those filed by the USA (1,542,002 patents in 2018, WIPO).
Conclusion
High appreciation needs to be given to the Minister of Research, Technology and Higher Education for the previous period, because he succeeded in institutionalizing a research culture that was previously relatively neglected. However, the conditions above are also a challenge for the new Minister of Research and Technology/BRIN to provide clear and focused direction so that the research conducted and produced can support Indonesia's economic transformation.
Currently, Indonesia's research funding to GDP is relatively low (0.25%). By comparison, China's R&D spending was 1.7% of GDP (in 2010, and the US had 2.7%). China will increase its research funding to 2.5% of its GDP in 2020 (equivalent to US$387 billion). With research funding not being very large and relying almost entirely on the government, it is time for the Minister of Research and Technology/BRIN to direct research topics that will support the growth and development of Indonesia's new mainstay strategic industry in the future.
What strategic industries will be targeted and require complete research support? Do Indonesia need to target current hot research topics (for example artificial intelligence, galaxies, MIMO systems and others) so that citations are obtained and the nation's dignity is raised, but the equipment and relevance are limited?
Or research topics that are relevant in society but not sexy for editors of top tier journals, so that the dream of placing UI, ITB, or UGM in the world's Top 200 is far away?
Or a research topic that compromises all parties, everything can be researched as long as the accountability (especially financial) is acceptable?
It is true that there are many questions that need answers, but the main question needs to be returned to what research fields will support Indonesia's economic transformation that is competitive and has high added value. As Michael E. Porter said, the core of strategy is to focus on certain activities (in this case research topics) to make an organization (nation) avoid mediocrity and be highly competitive.
Source: Republika (Opinion), Wednesday 13 November 2019
