Relationship between infrastructurue quality and RD intensity

26 Forum Tahunan Pengembangan Iptek dan Inovasi Nasional V, Tahun 2015 FUTURE TRENDS OF RD INTENSITY AND GDP PER CAPITA US000 IN INDONESIA 2012-2045 TIME RDpGDP GDPpCAP 1990 1995 2000 2005 2010 2015 2020 2025 2030 2035 2040 2045 RDpGDP GDPpCAP 0,080 0,000 RDpGDP GDPpCAP 0,208 5,000 RDpGDP GDPpCAP 0,336 10,00 RDpGDP GDPpCAP 0,464 15,00 RDpGDP GDPpCAP 0,592 20,00 RDpGDP GDPpCAP 0,720 25,00 Source: the simulation results of EGRI model, 2015 South Kore a 1990-2013 TIM E GN IpC ap RDpGDP 1990 1995 2000 2005 2010 GNIpCap RDpGDP 6.000 1,60 GNIpCap RDpGDP 9.800 1,98 GNIpCap RDpGDP 13.600 2,36 GNIpCap RDpGDP 17.400 2,74 GNIpCap RDpGDP 21.200 3,12 GNIpCap RDpGDP 25.000 3,50 future past Although Indonesia is rich in natural resources and biodiversity but it seems would be unsuccessful to exploit promising technology through RD activities. Indonesia would face the “uneven phenomenon” of high prosperity with moderate RD intensity, that is high living standard with GDP percapita of US 24 thousand coincides with technological dependence society. The medium figure of RD intensity around 0.72 of GDP generally relate to moderately innovative society. It is the feature of a country still buy much and make less in fulfiling of people needs for products and services. Indonesia could prosper and be strong in term of GDP parallel with unhealthy condition due to lack of nutrient in technological learning with RD intensity.

4. Balance of infrastructure quality and RD intensity

4.1 Relationship between infrastructurue quality and RD intensity

The development of infrastucture in EGRI model represented by construction investment which covers investment for: first category of buildings such as industrial factories and warehouses, commercial retail and leisure facilities, offices all office workspaces, including in mixed-use, public education, health and administration, residential houses and apartments, dam agricultural irrigation miscellaneous; and second category of infrastructure such as utilities energy, water and waste generation, processing, distribution and collection networks and plants, rail tracks and sleepers, bridges road and rail bridges, airports, harbours miscellaneous. 27 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