Review of literatures Introduction

17 Forum Tahunan Pengembangan Iptek dan Inovasi Nasional V, Tahun 2015 innovation networks GIN De Prato, 2013. The rise of some developing countries in global innovation networks was driven by blending between upgrading through learning and substantially increasing in RD intensity Ernst, 2006. LRDCs need to raise RD intensity to become the players of GPN and GIN in the future, it is an actual reason. But the important reasons of raising RD intensity for LRDCs are: i. to increase productivity and competitiveness of leading economic sectors mining, agriculture and industry, ii. to disersify the sectors of economy towards higher value added activities and foster structural change in the economy, iii. to address the basic needs problems including clean waters, foods availability, electricity supply, health and medicine availability, etc., iv. to increase the absorptive capacity of industry in modifying and adapting the foreign technology beside to generate new knowledge and technology, v. to increase the level of domestic technological capability in the process of catching up foreign tehnology; vi. to create high quality standard in higher education in producing highly competent scientist and engineers to work in RD. Ernst, 2006, Bell, 1999; Iizuka, 2011; Cohen, 1990; Hausmann, 2011; Guimon, 2014; World BankIBRD, 2012 The key problems of LRDCs are more than RD and inovation. Global competitiveness index 2014-2015, released by World Economic Forum WEF put infrastructure, innovation and company RD as the problematic elements in developing countries. For example, the problematic elements of Indonesian competitive index are infrastructure rank: 36, innovation rank: 31 and company RD rank: 24 among 143 economies. It means that infrastructure, innovation and company RD are the critical problems in Indonesia. The Indonesian government has set infrastructure program as one of development priorities in the next 5 years 2014-2019 to speed up more efficient economic activities to compete in global market in the long run. Indonesia goverment improved institutional framework to tackle institutional weakness embedded in innovation and RD, that was by upgrading the Ministery of Research and Technology MRT to becoming Ministery of Research and Technology and Higher Education MRTHE. The development of infrastructures roads, irrigation, ports, dam supported by strengthening the structure of upstream industries iron and cement and deepening the development of downstream industries manufacturing sectors are critical to drive economic growth. Indonesian infrastructure development successfully drove economic growth before the economic crisis of 2007. The past events of overshooting in property construction and lack of competitiveness based on RD activity stirred economy growing up followed by crisis. After the 2007 economic crisis, infrastructure development has lacked behind. The importance of infrastructure development has become the development priority at present, where the sources of financing for infrastructure investment will increase due to increase in the availability of government savings from the withdrawal of fuel subsidies. Meanwhile the importance of raising RD intensity has been discussing for a long time, but it has not yet come to the implementing agenda in Indonesia.

1.2 Review of literatures

Coping with the problems of infrastructure generally refer to the development of construction sector. Pushing the construction sector to grow more rapidly is expected to drive economic growth in the future. The driving growth through construction sector development has been explained in some literatures Giang, 2011; Ozkan, 2012; Kahn, 2014, and Chiang,2015. The supply chain of construction sector have the backward linkages not only with the mining sector iron, cement but also engaging directly to advance the manufacturing sector heavy industry, automated construction and attract indirectly regional development industrial zones and innovation infrastructure techno-parks regions. Investment in construction sector and its multiplier effects to develop backwards and forwards linkages through supply chains have been widely studied by O’brien 2009 and Pryke 2009. More specific evidence of steel supply by Huh 2011 has proven the relationship between steel consumption and economic growth in the long run. The influence of the construction sector to economic growth in Indonesia has been described by Budiwibowo 2009 found that the competitiveness of Indonesian construction industry is low due to the lack of success of its development strategy and policy. 18 Forum Tahunan Pengembangan Iptek dan Inovasi Nasional V, Tahun 2015 The LRDCs urgently need massive own science and technology ST capabilities for creating and shaping their own knowledge and technologies, where ‘systemic’ changes in ST management, organization and policy as well as broader economic and political structures should be implemented. Elly, 2009 Moreover in coping with the problem of innovation, the government of former developing countries took active part for the promotion of science, technology and innovation STI. The Korean government took a leading role in RD infrastructure for technology development. Korea built integrated RD estates for developing technologies at regional levels in 1980s. Lee, 1988 The Turkey government spent significantly to increase public RD expenditure that affected the increase of private RD investment. Ozcelik, 2008 Then, promoting innovation through techno-park has been becoming the mainstream program of current Indonesian administration. In case of Indonesia, innovation in the manufacturing sectors generally as the results of learning through “informal experiences” and not through “formal scientific activity or RD intensity” Aminullah 2012, 2014. Modes of learning include: i. learning through working in the production floor as the learning by doing, ii. learning through the use of machinery equipment and production systems as the learning by using; iii. learning through interaction with users, suppliers, parent companies in the design and modification of product and production process as the learning by interacting; iv. and learning from the succesfull of past experience as a role model for the future as the learning by modelling. About learning by DUI doing, using, and interacting see also Lundvall 2009 A state of the art in learning was constructed by Kodama that the modes of learning shifted beyond the simple mode of learning by doing toward learning by porting, via learning by using and learning by integration. In the past, Japan went beyond simple learning by doing toward learning by using in steel making technology, so as to Japan surpassed Germany and the US. Korea went beyond learning by using toward learning by integration in steel making to catch up Japan in 1990s. In ICT Japan went towards learning by integration in the production of LCD technology then moved towards learning by porting in numerical control NC technology. A shift from simple learning by doing to learning by using, integration and porting are the results of learning through RD activities conducted by competent researcher in RD. Kodama, 2014

1.3 Way of understanding the complex problems