Conclusion and policy implications

32 Forum Tahunan Pengembangan Iptek dan Inovasi Nasional V, Tahun 2015 quantity rather than small RD grant to achieve the significant results. These efforts can be realized by implementing conducively legal and institutional supports in conducting domestic RD.

6. Conclusion and policy implications

The modes of learning, RD intensity and economic prosperity in LRDCs viewed from varieties of indicators are as follows: first, simple learning by doing with very low RD intensity is maintained by the LRDCs in Indonesia to produce low end products by using low and medium technology LMT; second , RD intensity was the foundation of entering the global networks of production and innovation for the former developing countries Korea and Taiwan and followed by China, India; third , economic prosperity is related to infrastructure quality and intensity of innovation with RD; fourth , raising the intensity of innovation with RD require the improvement of infrastructure quality and the increase of competent researcher in RD; and fifth , high economic prosperity with low RD intensity is uneven phenomenon in the world. High economic prosperity coincide with technology dependence society would create instable and unhealthy economic growth in the long run. The Indonesian government should raise RD intensity by applying science policy for industrial development , those are: i. pushing growth through infrastructure development correspond to innovation with RD investment, ii. driving growth through industrial innovation with RD correspond to the sufficiency of researcher in industrial RD, iii. implementing effective policy instruments to raise industrial expenditure on RD correspond to the increase of researcher in industrial RD, and iv. focusing the limited RD financing on the country potency for industrial technology leader in the future or make some buy some strategy. The leverage point to raise RD intensity in Indonesia is the availability of highly qualified researcher. Therefore, universities and RD institutions should: i. invest in sophisticated research laboratories infrastructure followed by recruiting the highly competent researchers, ii. upgrade the quality and quantity of country’s higher education to produce graduates and post graduates, iii. utilize competitive brain-gain by applying internationally comparative rewards to attract the returning of highly competent researcher from abroad, iv. implement conducively legal and institutional supports to maintain highly competent researcher in industrial RD by, and v. manage new technology mastery by strong support to the priority field of sciences, where new materials and life science-based RD for industrial technology development will be important for Indonesian competitiveness in the future. REFERENCES Aminullah, E. 2007. Long-term forecasting of technology and economic growth in Indonesia. Asian journal of technology innovation, 151: 1-20. Aminullah, E. 2009. The needs for adaptive innovation policy under free market complexity: the Indonesian experiences. Journal of ST policy and RD management, 72:103- 124 Aminullah, E. 2011. Dynamic of research fund and long-term economic growth in Indonesia . National science and technology forum . Jakarta: the Indonesian Institute of Sciences LIPI. Proceedings, in Indonesian Aminullah, E. 2012. Coping with low RD intensity in Indonesia; policy insight from system dynamic model. Journal of ST policy and RD management, 101:1-10 Aminullah, E., T. Fizzanty, K. Kusnandar and R. Wijayanti 2013 . Technology transfer through OFDI: the case of Indonesian natural resource based MNEs. Asian Journal of Technology Innovation , 21S1: 104 –118 33 Forum Tahunan Pengembangan Iptek dan Inovasi Nasional V, Tahun 2015 Aminullah, E., P. Dian, M. N. Irene and C. S. Laksani 2014. How capital goods firms upgrade innovation capacity: a case study. Journal of ST policy and RD management, 122:105-118 Aminullah, E., T. Fizzanty, G. S. Indraprahasta and I. J. Asmara 2015. Technological convergence in Indonesian firms: cases of biobased chemical product innovation. Asian Journal of Technology Innovation , Vol. 23, No. S1, 9 –25 . Bell, M. and M. Albu 1999. Knowledge systems and technological dynamism in industrial clusters in developing countries. World development, 279: 1715-1734. Bygballe, L.E. and M. Ingemansson 2014. The logic of innovation in construction. Industrial marketing management , 43:512-524. Budiwibowo, A., T. Bambang, I. S. Abidin, H.G. Soeparto 2009. Competitiveness of the Indonesian construction industry. Journal of Construction in developing countries , 141. pp. 51-68. Chiang, Y.H., L. Tao, F. K.W. Wong 2015. Causal relationship between construction activities, employment and GDP: The case of Hong Kong. Habitat international, 46: 1-12 Cohen, W. M. and D. A. Levinthal 1990. Absorptive Capacity: A New Perspective on Learning and Innovation. Administrative Science Quarterly 351: 128-152 De Prato, G., D. Nepelski and J.P. Simon 2013. Introduction, in De Prato, G., D. Nepelski and J.P. Simon eds 2013. . Asia in global ICT network, dancing with tigers . Oxford: Chandos publishing. pp. 1-17. Ely, A. and Bell, M. 2009. The Original ‘Sussex Manifesto’: Its Past and Future Relevance. STEPS Working Paper 27 , Brighton: STEPS Centre. 4-8 Ernst, D. 2006. Innovation offshoring: Asia emerging role in global innovation networks . Honolulu: East- west center Special report No. 10. pp. 4-10. Giang, D.T.H., L.S. Pheng 2011. Role of construction in economic development: review of key concepts in the past 40 years. Habitat International, 35:118-125 Gilkinson, N. and B. Dangerfield 2013. Some results from a system dynamics model of construction sector competitiveness. Mathematical and Computer Modelling, 57:2032 –2043 Guimon, J. 2014. Investing in RD and innovation in developing countries for addreessing societal challneges. 5th INCO conference on Addressing future challlenges Athens, June Hausmann, R. and C. A. Hidalgo 2011. The network structure of economic output. Journal of Economic Growth 16:309 –342 Huh, Kwang-Sook 2011. Steel consumption and economic growth in Korea: long-term and short- termevidence. Resources Policy, 36: 107 –113 Iizuka, M. and L. Soete 2011. Catching up in the 21st century: Globalization, knowledge capabilities in Latin America, a case for natural resource based activities. Working paper series 2011-071 UNU-MERIT Khan, R. A., M.S. Liew, Z. Ghazali 2014. Malaysian construction sector and Malaysia Vision 2020: developed nation status. Procedia - social and behavioral sciences, 109: 507 – 513 Kodama, F., Y. Nakata and T. Shibata. 2014. “Beyond learning by doing : behind global shift in technological leadership. Asialics 2014 Conference. Daegu:DGIST. key note address Lee, chong-ouk 1998. The role of the government and RD infrastructure for technology development. Technology forecasting and social change , 33:33-54 Lundvall, B. A., J. Vang, K.J. joseph and C. Chaminade 2009. Innovation system research and developing countries, in Lundvall, K.J. joseph, J. Vang and C. Chaminade eds 2009. Handbook of innovation system and developing countries. Cheltenham: Edward Elgard. pp. 1-30 O’Brien, W.J.,C.T. Formoso,R.Vrijhoef, K. A. London eds 2009. Construction supply chain management handbook. London: CRC Press. Oyeyinka-O, B. and R. Rasiah eds 2009. Uneven path of development: Innovation and learning in Asia and Africa . Cheltenham: Edward Elgard. pp.1-38 34 Forum Tahunan Pengembangan Iptek dan Inovasi Nasional V, Tahun 2015 Ozcelik, E. and E. Taymaz 2008. RD support program in developing countries: the Turkish Experience. Research Policy , 37:258-275 Ozkan,F., O. Ozkan, M. Gunduz, 2012 Causal relationship between construction investment policy and economic growth in Turkey, Technological forecasting social change 79: 362 –370 Pryke, S. 2009. Construction supply chain management: concepts and case studies. Chichester: Blackwell Publishing . Suryani, E., S.Y. Chou, R. Hartono, C.H. Chen 2010. Demand scenario analysis and planned capacity expansion: a system dynamics framework. Simulation modelling practice and theory, 18: 732 –751 Senge, P.M. 1990. The Fifth discipline: the art and practice of leaning organization . New York: Doubleday. Senge P. M. et .al. 1994. The Fifth discipline fieldbook. Cambridge: Pegasus. Snabe, B. 2007. The Usage of system dynamics in organizational interventions. Wiesbaden, Deutscher Universitäts-Verlag, Zong-lai, K.ed. 2010. Toward an innovative nation: 30 years of China’s reform studies series. Singapore: Chenage Learning Asia, p.72. World BankIBRD 2012. Putting higher education to work: skills and research for growth in East Asia. Washington: World BankIBRD. 5-39 35 Forum Tahunan Pengembangan Iptek dan Inovasi Nasional V, Tahun 2015 MODEL VALIDATION RESULTS SIMULATION VERSUS ACTUAL 1990-2012 TIME P E R C E N T rGDPs rGDPa rCAPFs rCAPFa rPRVCs rPRVCa 1990 1992 1994 1996 1998 2000 2002 2004 2006 2008 2010 2012 -40 -35 -30 -25 -20 -15 -10 -5 5 10 15 20 ESTIMATION OF ECONOMIC AND RD ACTVITY INDICATORS IN INDONESIA 1990-2045 gov_exim_sh 1990 1995 2000 2005 2010 2015 2020 2025 2030 2035 2040 2045 Pop mill ion GDP_cp bil li on GDP_rp bill ion rGDP GDPpCap thousand GDPpCAPs US thousand GDP_s US bil lion defl _p1993 =100 RD_exp bill ion Gov_RD bi ll ion Prv_RD bil li on RDpGD P GOVRD sh PRVRDsh capf sh prvc_sh gov_exim_sh rGOVRD rPRVRD exch_r_avg rupi ahdoll ar r_Pop 179 196 207 221 235 250 265 281 299 317 336 357 211193 467339 1357478 2659059 6498115 11747140 18725687 29512099 43525988 61432745 83400752 108249610 263662 396391 427574 551026 724700 979663 1241226 1592490 1958544 2361502 2806132 3266721 9,05 8,18 4,52 5,76 4,23 5,07 3,99 5,35 3,80 3,73 3,27 2,67 1177 2390 6559 12033 27621 47042 70646 104893 145745 193795 247862 303084 0,639 1,06 0,779 1,24 3,04 3,76 5,65 8,39 11,66 15,50 19,83 24,25 114,59 207,80 161,18 273,99 714,86 939,77 1.498,05 2.360,97 3.482,08 4.914,62 6.672,06 8.659,97 80,10 117,90 317,48 482,57 896,66 1.199,10 1.508,64 1.853,21 2.222,36 2.601,43 2.972,09 3.313,71 274,55 597,66 1.378,37 2.743,75 5.843,54 14.770,7 40.323,1 123.207 227.267 353.958 546.942 769.682 247,10 537,89 1.171,61 2.332,19 4.674,83 11.481,0 28.702,5 45.924,0 63.145,5 80.367,0 97.588,5 114.810 27,46 59,77 206,76 411,56 1.168,71 3.289,74 11.620,6 77.282,6 164.121 273.591 449.354 654.872 0,13 0,128 0,138 0,114 0,0915 0,111 0,217 0,418 0,523 0,577 0,656 0,711 90,00 90,00 85,00 85,00 80,00 77,73 71,18 37,27 27,78 22,71 17,84 14,92 10,00 10,00 15,00 15,00 20,00 22,27 28,82 62,73 72,22 77,29 82,16 85,08 26,37 28,49 20,89 24,73 23,84 26,06 25,78 24,78 22,30 20,55 18,96 17,64 58,82 58,97 64,37 61,42 60,25 56,60 59,11 59,60 61,53 62,67 63,67 64,67 14,81 12,55 14,74 13,85 15,91 17,34 15,10 15,62 16,17 16,78 17,36 17,69 15,01 9,27 16,05 11,33 5,71 13,94 12,00 7,50 5,45 4,29 3,53 3,00 27,15 9,27 17,15 11,33 33,44 34,60 4,88 23,59 15,36 8,70 8,27 6,55 1843 2249 8422 9705 9090 12500 12500 12500 12500 12500 12500 12500 2,00 1,20 1,40 1,30 1,20 1,20 1,20 1,20 1,20 1,20 1,20 1,20 Source: the sim ulation r esults of EGRI m ode l, 2015 Appendix 1 Notations: r GDPs: rate growth of GDP simulation r GDPa: rate growth of GDP actual rCAPs : rate growth of capital formation simulation rCAPa : rate growth of capital formation actual rPRVCs: rate growth private consumption simulation rPRVCs: rate growth private consumption actual Appendix 2 36 Forum Tahunan Pengembangan Iptek dan Inovasi Nasional V, Tahun 2015 BIOGRAPHY Dwi Soetjipto, 59 years old, was born on 10 November 1955 and has been serving as the President Director CEO of PT Pertamina Persero based on the Decree of Minister of SOEs No.SK- 265MBU112014 dated 28 November 2014 until now. In addition to become the President Director CEO of Pertamina, Dwi Soetjipto is also a Commissioner of PT Bursa Efek Indonesia. He is a graduate of Chemical Engineering from the Institute of Sepuluh November, Surabaya 1980, Master Management Program from University of Andalas 1999, and Doctorate Program from University of Indonesia 2009. His career started in 1981 in PT Semen Padang and was once trusted to hold the position of RD Director at PT Semen Padang 1995-2003, President Director of PT Semen Padang 2003-2005, President Director of PT Semen Gresik Persero Tbk 2005- 2013, and President Director of PT Semen Indonesia Persero Tbk 2013-2014. Dr.Ir. Dwi Soetjipto, MM, PT. Pertamina, Indonesia Title of the Speech: RD and Innovation in Indonesian Oil CompanyPT. Pertamina Persero 37 Forum Tahunan Pengembangan Iptek dan Inovasi Nasional V, Tahun 2015 38 Forum Tahunan Pengembangan Iptek dan Inovasi Nasional V, Tahun 2015 39 Forum Tahunan Pengembangan Iptek dan Inovasi Nasional V, Tahun 2015 40 Forum Tahunan Pengembangan Iptek dan Inovasi Nasional V, Tahun 2015 41 Forum Tahunan Pengembangan Iptek dan Inovasi Nasional V, Tahun 2015 42 Forum Tahunan Pengembangan Iptek dan Inovasi Nasional V, Tahun 2015 43 Forum Tahunan Pengembangan Iptek dan Inovasi Nasional V, Tahun 2015 44 Forum Tahunan Pengembangan Iptek dan Inovasi Nasional V, Tahun 2015 45 Forum Tahunan Pengembangan Iptek dan Inovasi Nasional V, Tahun 2015 46 Forum Tahunan Pengembangan Iptek dan Inovasi Nasional V, Tahun 2015 Dr. Michiko Iizuka, UNU Merit, the Netherlands Title of the Speech: Natural Resource-Based Activities and The Role of Institutions In a Global Context E-mail: iizukamerit.unu.edu BIOGRAPHY MICHIKO IIZUKA, Research Fellow, UNU-MERIT, the Netherlands. Michiko Iizuka is a policy specialist in the field of development, innovation and sustainability. Since 2008, she has been a research fellow at the United Nations University-MERIT. Before that, she worked as a researcher at International Development Center of Japan and as an environmental officer at the United Nations Economic Commission for Latin America and the Caribbean UN- ECLAC. She has also provided consultancy works for UNIDO, ECLAC, EU, JICA, DFID and WWF-UK. She has a DPhil in Science, Technology and Innovation Policy from the Science Policy Research Unit SPRU and MPhil from the Institute of Development Studies IDS, both at the University of Sussex.She also holds a Postgraduate diploma in Environmental Management from Imperial College, University of London. Her main areas of interest are: 1 innovation systems in the context of developing countries; 2 the role of innovation policy in the development process; 3 the impact of global institutions such as standards and global agreements on local capacity building; and 4 agriculture, natural resources and environmental policy. 47 Forum Tahunan Pengembangan Iptek dan Inovasi Nasional V, Tahun 2015 ABSTRACT Natural Resource-Based Activities and the Role of Institutions in a Global Context Michiko Iizuka UNU-MERIT Recently, many studies have claimed that natural resources NR are no longer considered a ‘curse’ but are increasingly being considered an opportunity for development, as long as the institutions to sustainably manage NR are present. NR are essentially public goods. This means that government plays a critical role in shaping informal and formal rules —institutions—to define ‘access’ and ‘ownership’ and enforce them effectively to ensure sustainability. The circumstances surrounding NR-based activities nowadays have become increasingly complex due to the integration of NR into turbulent global markets, while productive activity hinges upon the sustainability of local environmental conditions. Institutions —rules that shape the behavior of stakeholders involved —have great importance in the sustainability of NR-based activities. However, the process of institutional change in meeting various challenges, especially the ways that rules are effectively created and enforced to achieve developmental goals in increasingly globalizing NR-based industries have not been systematically studied. This paper aims to do the following: 1 understand the current discussion in relation to natural resources and their potential for development 2 clarify the importance and complex nature of institutions in developing natural resources and 3 understand the process of institutional change. After going over the main points, this paper presents a case study of the salmon industry in Chile to illustrate the points related to NR raised in the earlier sections. In the last section, the paper will draw generic conclusions in light of the current discussion on NR-based industry in developing countries. Keywords: natural resources, institutions, sustainable development, salmon aquaculture, Chile 48 Forum Tahunan Pengembangan Iptek dan Inovasi Nasional V, Tahun 2015

1. Introduction