The National Committee of Innovation (KIN) welcomed Government’s intention to be more focused on three industries for the future i.e. communication and telecommunication, agro-business, and transportation. Chairman of KIN Zuhal Adul Kadir in Jakarta (Monday 16/1/2012) rated that the development of three industries as recommended by the Ministry of Industry needed to be supporter by a research agency. Business and industry, he said, relied on this research agency who would propose new innovations. According to Zuhal, a research agency was important for the progress of industry. New inventions made by this agency would support development and growth of industry.
Zuhai disclosed that KIN planned to set up an institution known as the National Research Center which would serve as legal financing agent for the Government, or industry of the private sector and BUMN which were willing to spare a chunk of their fund for research and development. However, as Zuhai had it, to make KIN a sound research center, a vast amount of fund was needed.
According to Zuhai funding was a classical problem which was never solved till now. Zuhai illustrated that the portion of budget allocated for R & D was still measly, i.e. 0.08% of GDP.
Big manufacturing companies also of the industrial group with low R & D activities included food & beverages, textile, and furniture. Zukai said that increase of budget for R & D should at least reach 1% of GDP. The expected funding contribution was 30% - 40% from Government, 30% from state owned companies (BUMN) and the rest from the private sector. “There is no other choice except to collaborate, because the fund needed for R & D in technology is enormously big” Zuhal was quote as saying.
Moreover, Zuhai remarked, Indonesia had proclaimed the Masterplan for Planning and Expansion of Indonesia’s economy (MP3EI) which obviously needed support of technological innovation. He further elaborated that to step up national competitiveness, the Government had proclaimed the MP3 EI to keep up with advanced countries like South Korea and China. Among the strategic focus of this masterplan was upgrading of human resources, and national science and technology. He underscored that it was not easy to attain 100% success in R & D efforts as long as the classical problem of budget shortage was not overcome.
Beside the budget factor, Zuhal was quoted as saying, regulations and incentive system were also not supportive to innovation climate. The regulation related to research development, i.e. law no 18/2002 on the national system of research, development, and application of science and technology was Perpres No 35/2007 and PP no 20/2005. As with budget financing, according to Zuhal KIN had taken the initiative to increase budget for R & D for science and technology to 1% of GDP. This, according to Zuhal was accommodated in MP3 El based on the formula of 1:747. This formula was an initiation of innovations precedeeded by increasing R & D fund amounting to 1% per PDB up to 2014.
Zuhal estimated that Indonesia’s national GDP in 2014 would come to Rp 1,200 trillion. Hence fund for R & D could reach Rp 120 trillion. Zuhal rated that the condition national R & D could not convince industrial and manufacturing circles to use local technology. Yet it was most important to keep the industry and manufacturing from fleeing overseas because the local climate was not conducive to growth, in addition to the incentive system which lacked Government’s attention.