Development of Technology-Based SMEs, Transfer of Technology, and Innovation Strengthening in Indonesia

Abstract

SMEs have become a backbone of Indonesia’s economy. An improved innovation capacity of this sector will significantly contribute to the economy growth and accelerate poverty alleviation. Indonesian government has introduced various policies, program and schemes to enhance the competitiveness of SMEs such as providing wider access to financial resources, access to market, technical skill and business development, technology adoption, and procurement. SMEs have also played an important role in the development of energy security such as in the adoption of micro-hydro power technology in various parts of Indonesia. On transfer of technology initiatives, there is an increasing trend in many R&D institution and higher education institutions to systematically develop their capacity to be better service providers to industry. A number of technology intermediaries have been established from institutional level up to national level. Since the last ten years, there has been a growing interest in development of technology business incubation which, amongst other, can become an effective technology transfer mechanism for R&D institution and higher education institutions to further develop the growth of newly technology-based SMEs. Yet, some challenges on this transfer of technology remain. These, among other, include: a need for a sustainable supports to intermediaries until they have minimum capacity to stand on its own, human resources capacity building, and more importantly creation of a conducive ecosystem to new entrepreneurs to access and adopt technology innovation. On national innovation system (NIS/SINAS) strengthening, Indonesia has taken a systematical approach by introducing and implementing various policies and programs. Policies include, for example, inclusion of NIS as a development priority in the mid-term national development plan (RPJM) and institutionalization of policy making body through the establishment of National Committee for Innovation (KIN) who directly responsible to the President of the Republic of Indonesia. Further, a number of initiatives and programs on strengthening of regional innovation system (SIDA) have also been introduced. This includes strengthening capacity of local governments in the development of SIDA in selected regions. In 2011 the government has launched a new initiative, i.e. Master plan of Acceleration and Expansion of Indonesia Economic Development (MP3EI) 2011-2025 where strengthening national human resources capability and science & technology is one of the three strategies. It seems that this political commitment needs to be pushed further to become a national movement. It is therefore necessary to undertake a number of initiatives especially in the area of capacity building of policy makers and executives in central and more importantly in local government. Finally, this paper proposes three proposals, i.e., International Conference Sustainable Energy Engineering and Application: Solar and Biomass Energy, International Seminar and Workshop on Enhancement of Grassroot Innovation Competitiveness for Poverty Alleviation, and strengthening technology business incubators management capacity on specific skills