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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
Emergent events could raise unexpectedly as the consequence of system properties and performance as a whole. The system of growth under lack of investment in the economy will manifest on the patterns of
economic growth. The possibility of event that needs to be anticipated forward in relation to driving growth through infrastructure developement and low RD investment for technology innovation is the economic
growth fluctuation from the delay effect of construction investment on output, which would be manifested in the form of
slow economic growth toward 2020
. The events of instability would possibly prolong towards year 2030. Furthermore, from the 1930-45 the Indonesian economic magnitude would be US 5-9 trillions,
the economic growth would be stable because of too big to be unstable. See Graph 10.
Graph.9
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Forum Tahunan Pengembangan Iptek dan Inovasi Nasional V, Tahun 2015
DELAY EFFECT OF INVESTMENT IN CONSTRUCTION ON SLOW GROWTH 2016-2020
TIME
CONSTR_INV rGDP
1990 1995
2000 2005
2010 2015
2020 2025
2030 2035
2040 2045
CONSTR_INV rGDP
0,0 -13,0
CONSTR_INV rGDP
4.200 -8,4
CONSTR_INV rGDP
8.400 -3,8
CONSTR_INV rGDP
12.600 0,8
CONSTR_INV rGDP
16.800 5,4
CONSTR_INV rGDP
21.000 10,0
SLOW GROWTH
Source: the simulation results of EGRI model, 2015 future
past
The EGRI model simulated technological efforts to stabilize the possible fluctuation of economic growth in the future. The technology efforts was run by multiplying RD spending to create high value in
output through innovation with RD intensity. However, the very small initial condition of RD expenditure only 0.1 of GDP and private sector only 0.025 of GDP, it could not effect to stabilize the
possible fluctuation of economic growth in the future. Aminullah 2007, 2011, and 2012 claimed that the economy can grow up with capital investment, but can be unhealthy because of malnutrition in technology
innovation. As a result, the economy with malnutrition in technology innovation is vulnerable to disease of crisis as experienced in the crisis of 20072008.
Focusing on physical capital investment that ignoring RD intensity for technology innovation will depress the production growth due to lower capital efficiency. Capital efficiency is determined by capital-
output ratio and influenced by technological innovation. The higher the capital-output ratio means the lower capital efficiency, while the balance of physical capital investment and technology innovation will drive the
increase of production growth supported by higher capital efficiency and it will create a stable economic growth in the long run. Furthermore the more intensive RD intensity for technological innovation will
create the higher capital efficiency. The higher the capital efficiency and finally the higher the private consumption rate for high quality of product and service in the economy. From the period of 1930- 2045
economic growth would stable where private consumption will account for 65 as the sources of economic growth and private RD will be Rp 654 trillions or US 50 billions at 2013 dollar price. See Appendix 2.
5. Researcher in RD and science policy
