Forecasting of technology innovation and economic growth in Indonesia

Abstract

This article explored the scenarios of future technology innovation and economic growth. The feedback economics' perspective was applied in forecasting future technology innovation and economic growth. The system dynamics modelling of economic growth by incorporating technology innovation revealed that: i. General Purpose Technologies (GPTs) investment should be linked with industrial policy as a leverage point; ii. The post-COVID-19 industrial policy should diffuse GPTs for inclusive growth and sustainable development, it is different with the Indonesian pre-COVID-19's industrial policy, specifically before the 1997 economic crisis; iii. Rethinking the Indonesian industrial policy is to rejuvenate the existing industrial-based GPTs' complex, and the inter-ministerial policy coordination is a challenge to implement the industrial-based GPTs policy instrument. Putting the GPTs' innovation into practice by using industrial policy for future economic growth sustainability is the unique insight on reindustrialization. The scientific contributions of this study were: i. on theoretical basis, the framework and model enriched the feedback economics' view of Cavana et al. and; ii. on innovation economics' studies, the framework and model support the concepts of Lundvall. Finally, future work from this study is designing different feedback structure that could generate different results.