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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
As explained in detail that raising RD intensity and improving infrastructure quality are becoming the key to open the door of competitiveness for LRDCs. However the door of competitiveness will only
opened by turning the key in the hand of researcher in RD. The availability researcher in RD is neccessary, and the quantity of highly qualified researcher in RD must be sufficient to lever RD
activities at country level. The relationship between quantity of researcher and RD intensity is depicted in Graph 11.
Graph. 10
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Forum Tahunan Pengembangan Iptek dan Inovasi Nasional V, Tahun 2015
An increase in the number of researcher in RD tend to have relationship with the increase of RD intensity. The large number of researcher in RD per milllions population RiR mostly dominated by
developed countries. The research work are conducted by more than 3000 of RiR for the level of high RD intensity more than 1 of GDP in developed countries. While some newly emerging economies except
India, the value of RiR for the level of high RD intensity more than 1 of GDP are vary from 500 to 3000. Most of developing countries have the value of RiR less than 500 for the level of low RD intensity
less than 0.5 of GDP.
LRDCs need to increase the value of RiR more than 500 to catch up the general value of RiR in newly emerging economies. The trends of increase in the number of RiR depend on average change in the
RiR value within a period of time that reflects the production of new RiR. LRDCs have to increase the production of new researcher in RD nRiR. Generally, all countries produced nRiR except new Indonesia
reduced existing RiR. South Korea yearly produced 324 nRiR in the period of 2000-2010, followed by Malaysia 124, Slovakia 93, Italy 53, and China 38, except Indonesia reduced the existing RiR by -12
in the period of 2000-2010. A change in RiR is also depend on country population, the more larger the population the more slower of changing in RiR, for example China increased in RiR from 542 to 924 in ten
years, while Malaysia a small population country surpassed China by increase in RiR from 124 to 1517 in ten years. See Graph 12.
Graph. 11
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Forum Tahunan Pengembangan Iptek dan Inovasi Nasional V, Tahun 2015
To catch up the general value of RiR in newly emerging economies, Indonesia should increase the value of RiR by 500 in 2025 and reach 1500 in 2045. The actual number researcher in RD should be
raised from 22,150 in 2010 RiR=90 to 142,500 in 2025 RiR=500. If the Indonesian RiR was stable at 90 in the last five years 2010-2015, the number researcher in RD is being 22,500 in 2015. Indonesia
should create nRIR= 41 or yearly recruiting 12000 new researchers in the next period 2015-2025. If Indonesian maintain its stable value of RiR around 100 or back to the business as usual BAU activity, it
means that Indonesia would consistenly devote with LRDCs status in the next ten years.
An increase in the quantity of RiR is neccesary but the availability of highly qualified researcher is
the point of leverage
to create effective RD activities, which is depend on: i. investing in sophisticated research laboratories infrastructure followed by recruiting the highly competent researchers, ii. returning of
qualified scientists and engineers from abroad to work in domestic RD, iii. increasing in the quality and quantity and of country’s higher education in producing graduates and post graduates, iv. applying
competitive brain-gain by internationally comparative rewards to attract the returning of highly competent researcher from abroad, v. implementing conducively legal and institutional supports to maintain highly
competent researcher in industrial RD, and vi. managing technology by strong support to the priority field of sciences, where new materials and life science-based RD for economic development will be important
for Indonesian competitiveness in the future.
For the future competitiveness, Indonesia should focus the limited RD financing on the country potency of technological leadership or make some buy some strategy. Indonesia needs to develop RD
capacity in
new materials and life science
–
based
industry in the future. The promotion of RD based on unique mineral and natural wealth have two advantages.
First
, the utilization of Indonesian comparative advantage of having vast mineral and biological diversity in land and sea.
Second
, revitalization of life science RD park CSC currently managed by the Indonesian institute of Sciences LIPI will develop
towards progressive ST infrastructure to support the development of leading industry in the future. The development natural resource based industry driven by new materials and life science based
technologies for the future should not create a totally new industry, but by developing the existing industries that have strong potency to develop further. It is therefore, the new materials and life science
RD programs and its implementations need to cooperate with existing related industries such as steel, bio- based chemicals, biomedical and biotechnology industries, etc. In applying
science policy for industrial technology
development,
the Indonesian
government needs
to encourage
public-private partnershipconsortium of joint research. It is the long term-research grant for 5-10 years in sufficient
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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
