Govt Research Funding Needed To Match Western Innovation

India's big drugmakers will need at least five more years to improve their manufacturing standards and data reliability to a level demanded by international regulators. (Reuters Photo/Wolfgang Rattay)

By : Vanesha Manuturi | on 8:42 PM March 24, 2014
Category : Business, Economy

Jakarta. The government and the private sector must improve their cooperation in research and development to allow Indonesia to catch up with advanced countries, according to a senior official at the Agency for the Assessment and Application of Technology, or BPPT.

Government research funding amounts to less than 1 percent of the annual state budget, or Rp 6.5 trillion ($650 million) per year, according to Ridwan Djamalludin, the deputy chairman of the BBPT’S natural resources development technology unit.

Ridwan told the Jakarta Globe on Monday that there was much room for improvement.

“Look at the pharmaceutical industry, for example. Research to push public use of herbal medicine is supported by both private companies and research institutions,” he said, but added that this support had not been followed up with policy or action.

While several research institutes have initiated studies on energy sources, companies — both state-owned and private — rarely put the research to good use, he said.

Lukman Hakim, the head of the Indonesian Institute of Sciences (LIPI), said Indonesia would have to provide more funding to develop its own technology research capabilities if the country aims to become one of the world’s top 10 economies in the future.

“Advanced states are conscious of the importance of scientific research in developing industrial competitiveness for their economic growth,” Lukman said in October last year.

Data from the World Bank showed that Indonesia spent the equivalent of 0.08 percent of its gross domestic product on research and development in 2009.

Meanwhile, Malaysia and Singapore spent 1.01 percent and 2.43 percent respectively in the same period.

The percentage grows for more developed countries like Sweden — ranked sixth out of 148 countries in the Global Competitiveness Index — which spent 3.6 percent on research and development in 2009.

Sweden has continually topped global innovation lists, ranking in third place out of 142 countries in the Global Information Technology Report by the World Economic Forum last year.

“As a small country, it’s especially important for us to be at the forefront of everything,” said Jan Sandred from Vinnova, the Swedish government agency that administers research and development funding.

Last year, the agency disbursed approximately $400 million to thousands of startups and research institutes in Sweden.

The innovative efforts of the Swedish government are supported by private companies such as Kapsch TrafficCom, which also places great value in research and development.

Kapsch, which provides intelligent transportation solution services globally, allocates 12 percent of its total revenue for research and development, which amounted to 355 million euros ($489 million) between April and December last year.

“Investing in research and development is crucial for us to become the market leader in the world,” Goran Andersson, the senior sales manager at Kapsch, told the Globe last week in Stockholm .

According to Sandred, Sweden’s strength in innovation lies in the little things that most would take for granted.

“Electricity, for example. [Sweden] hasn’t had a blackout since 1979,” he said.


Vanesha Manuturi’s trip to Stockholm was sponsored by the Swedish Institute.

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