While Indonesian research and development output lags behind its regional neighbours (See Making Research & Development Part of Indonesia’s Vision for Growth), the country’s renewed approach to the issue through the development of the new Research and Development and Higher Education Ministry should facilitate improvements. This opens up opportunities to international universities, business schools, scientific bodies and private sector players to forge partnerships for collaboration on research in a number of areas. As the world’s largest archipelago, Indonesia faces unique challenges that require specific solutions. However, the country also faces issues that are common to other emerging markets including the development of renewable energy resources, the tackling of tropical diseases, food security and the need to manage urban development among others. Indonesia as the largest economy in the ASEAN and being among the largest countries by population in Asia provides fertile ground for growing new ideas and innovations through collaborations that can impact the region as a whole and beyond.
Taking the lead from the technology and entrepreneurism hubs and incubators that have been established across the globe, Indonesia is seeking to develop clusters to accommodate research and development. These so called ‘technoparks’ have already been established in Bandung and Solo with some notable success in bringing together academic actors with private and state companies for the development of commercially viable products in the field of ICT. The Minister of Higher Education, Research and Technology announced in March 2015 an ambitious plan to establish 100 more science and technology parks by 2019.
Future technoparks are expected to specialize in other areas where research and investment is sorely needed such as in the energy and power generation sectors as well as maritime related industries. These new and existing clusters should provide an ideal entry point for academic institutions and companies seeking to engage in research and development in Indonesia.
Specific tax breaks to encourage investment within the technoparks would also be a welcome development to lure companies to earmark funds to research and development in Indonesia. Investors should also note that so called ‘pioneer industries’ are subject to tax incentives by the government which includes telecommunication equipment as well as industries related to renewable energy among others. Given the demand for local content requirements within these sectors, undertaking research and development in Indonesia will facilitate swifter market penetration in addition to fiscal optimization.
Indonesia offers numerous examples of successful cooperation in research and development with international partners which have multiplied in recent years in response to a growing interest in the country. The country’s top ranked universities have secured partnerships and funding for R&D projects such as the Bandung Institute of Technology who in 2014 launched a laboratory with Japan based systems integrator NTT DATA as well as the Blackberry Innovation Centre with Canadian based Research in Motion. Universitas Indonesia in collaboration with the Oxford Institute of Population Aging established the Center for Ageing Studies committed to creating solutions to tackle the challenges posed by an aging population. In 2007, Sebelas Maret University started collaboration with three medical institutions: the Branch of Traditional Medicine at the Chinese Medicine Association (China), the Indonesian Collegiums of Acupuncture and PT Tri Mukti Padatguna, which offers education and health services.
Indonesia has the second largest biodiversity in the world after Brazil and ready availability of fertile land as well as a tropical climate well suited to numerous commodities including coffee and cocoa. As the country seeks to strengthen its national food security, a number of projects are underway such as the Merauke Integrated Food and Energy Estate in Papua. However, the country continues to suffer from poor yields due to the lack of quality seeds in addition to the provision of sufficient training for small hold farmers. Research and development into seeds for key foodstuffs as well as tropical variations of high demand commodities offers significant opportunities.
For example, Andalas University in Padang has been working in collaboration with a private sector company on the development of tropical wheat (See Indonesia’s Growing Appetite for Wheat) which has already been successfully cultivated.
Asian Business Studies
The 21st century is widely regarded to be the century of Asia’s rise. The Asian business culture and understanding the intricacies of Asian business is at the top of the agenda for all internationally focused business schools around the globe (See Indonesia's Transforming Economy: Business Education in High Demand). Indonesia as the largest economy in the ASEAN which accounts for half of the total population of the region is therefore an ideal testing ground for research into Asian Business Studies.
Prasetiya Mulya School of Business & Economics has made the study of Asian business its main area of focus and has established a network of partners across Asia for the development of business case studies as well as business culture research within the private sector and state owned companies.
The resilience of the Indonesian economy following the 1998 Asian Financial Crisis and the subsequent 2008 Global Financial Crisis was in large part due to its thriving small and medium enterprises. Over 99% of Indonesian companies are SMEs which equates to over 40 million companies. As demonstrated in mature markets during the most recent financial crisis, SMEs are the largest generators of employment and can be engines of innovation and new technology. Indonesia’s SMEs are still mainly engaged in trading and have yet to move up the value chain in terms of specialized products and services. The country’s business infrastructure therefore offers interesting opportunities to collaborate on research within the field of SME development. Narotama University in Surabaya is one such university establishing a foothold within SME research and training. Tarumanagera University in Jakarta has also been working with the local government of Belitung to provide training as well as financial assistance to create a sustainable SME ecosystem.
The Indonesian capital, Jakarta, has been awarded the unwelcome accolade by international polls for having the worst traffic in the world (Castrol, 2015) as well as being among the worst places to live. Poor urban planning is seeing this story being replicated in secondary cities and satellite suburbs. Research into solutions for urban planning taking place within a continuously expanding urban sprawl in addition to technology for developing ‘smart cities’ which can reduce energy costs and improve efficiency are further areas for prospective research collaboration. This is therefore an area that offers considerable potential for the development of new products to meet the needs of fast growing urban centres and new infrastructure projects.
Global Business Guide Indonesia - 2015
Number of Tertiary Education Institutions: 4,384 (2015)
Type: 91.5% Private, 8.5% Public
Students in Higher Education: 6,959,622 (2015)
Net Enrolment Rate in Tertiary Education: 20.18% (2014)
Relevant Law: Higher Education Law No. 12 of 2012 provides universities with the autonomy to set their own tuition fees and authorising the set up of foreign universities in partnership with Indonesian institutions.