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Forum Tahunan Pengembangan Iptek dan Inovasi Nasional V, Tahun 2015
As described in section one, the country with better infrastructure will have active innovation through RD, thus the more sophisticated the infrastructures tend to have higher RD expenditure and the
more competitveness the industries. Then, the more industries with the globally competitive product and service the more they spend on RD to meet very high demand in global market. The relationship between
infrastructure quality and RD intesity is depicted in Graph 8.
Private RD mostly in industrial sector would increase by more than three times from the amount of Rp 3.3 trillions in 2010 to become Rp 11.6 trillions in 2020 and national RD expenditure
will become 0.22 of GDP in 2020. The prerequisites to realize this estimation are:
first,
implementation of government institutional supports tax incentive for RD activities;
second,
committed private sector to grow through innovation with RD activities not satify with what they have been very succesfully doing
before through innovation with low or without RD activity. Aminullah, 2014
4.2 Industrial and economic impacts of construction investment
Even though innovation in construction sector is limited and is often accused of being non- innovative and conservative sector. Most of innovation type is organizational innovation and technical
change such as prefabrication of material for construction Bygballe, 2014. However, the important output of investment in construction sector is better facilities for easyness in doing business, that provides wide
ranges of impact for economic and industrial development.
The impact of construction investment on economic development are as follows. The construction investment would increase by twice within next 5 years, from current position of 8 trilllion to become 16
trillion in 2020, then continue to increase to reach 21 trillion in 2025. The long term infrastructure development will become backbone of strong economic growth, that would bring the Indonesian GDP US
2.3 trillion in 2025 then doubling to US 5 trilillons in 2035 then reach US 8.6 trillions in 2035. As a new developed economies the constribution of construction sector in GDP will continue to decline in the long
run. See Graph 9.
Graph. 8
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Forum Tahunan Pengembangan Iptek dan Inovasi Nasional V, Tahun 2015
FUTURE TRENDS OF INVESTMENT IN CONSTRUCTION AND ITS CONTRIBUTION TO GDP 2012-2045
TIME
CONSTR_INV CONSTR_INGDP
1990 1995
2000 2005
2010 2015
2020 2025
2030 2035
2040 2045
CONSTR_INV CONSTR_INGDP
0,00 2,60
CONSTR_INV CONSTR_INGDP
4.200 4,14
CONSTR_INV CONSTR_INGDP
8.400 5,68
CONSTR_INV CONSTR_INGDP
12.600 7,22
CONSTR_INV CONSTR_INGDP
16.800 8,76
CONSTR_INV CONSTR_INGDP
21.000 10,30
Source: the simulation results of EGRI model, 2015 future
past
The impact of construction investment on industrial development are:
first,
competitive product and service quality are pushed by easiness in doing business from excellent infrastructure.
Second
, the more national industries to become global industries with outward foreign direct investment OFDI, regarding
Indonesian OFDI see Aminullah 2013.
Third,
shifting manufacturing sector from low value, foot loose light engineering industries or LMT low and medium technology industries to MHT medium and high
technology industries such as basic industries, structural, metal, chemical based industries.
Fourth
, emergence of promising high technology or sunrise industries such as nano-technology, biotechnology and
renewable energy.
4.3 Anticipating emergent events
