To face global competition and survive in a fast-changing world, innovation is a necessity for Indonesia, according to former Trade Minister Gita Wirjawan.
Speaking for second time at the annual Indonesia Economic Forum (IEF), Gita said Indonesia had a lot of catching up to do.
For instance, Indonesia filed less than 500 patents from 2007 to 2013, in contrast to China, which filed more than 700,000 patent applications in the same period – well beyond the figures for the United States, Japan and South Korea.
The founder of the Ancora Group also pointed out that only 16 percent of Indonesian college graduates have engineering degrees, compared to 33 percent in Malaysia and 24 percent in Vietnam.
“Indonesia needs to increase its engineering graduates if it wants to be innovative,” he said during his presentation on the second day of IEF at the Shangri-La Hotel Jakarta on November 15, 2016.
Gita said innovation is really about the hunger or thirst to change the world for the better, and it is a derivative solution. GO-JEK, for example, would not be around if there was no chaos on the roads.
Innovation has also led to the biggest media company in the world, Facebook, being a company with no content of its own, and the biggest hotel company in the world, Airbnb, being a company with no rooms of its own.
In the same way that the Stone Age didn’t end because the world ran out of stone, Gita said the Oil Age will not end because the world will run out of oil. These changes are due to innovations on the demand and supply sides of the game.
“Innovation will continue to haunt us,” he said.
To be innovative, Indonesia will have to put more money on the table. This will help make sure that the 80 million people in the middle class that Indonesia will have in the coming years are going to be able to function effectively and efficiently.
“The key thing is that we have to be able to pierce through the middle income trap and to stay relevant in just about every metric you can imagine,” Gita said.
So will Indonesia innovate or die?
“I certainly choose not to die. I think Indonesia will innovate,” Gita said, adding that history shows how Indonesians survive hardships – from struggling for independence in 1945 to pulling through global and regional economic difficulties in the past decades.
“We beat the odds that people were putting, we survived,” Gita said, pointing out that Indonesia has trimmed its debt to 20% of GDP, is now the 8th largest economy in the world, and is part of the G-20.
The art of the possible is there, he said, and Indonesia is not going to stop at spending $8 per person on research and development. Indonesia is going to stop when its R&D spending exceeds that of its neighbors, such the $60 per person Singapore is spending.
“What would it take to get there? Perseverance, a lot of prayers too, more money on the table and a few innovators to set examples for other people who have not been thinking about being innovative,” he said.
“It’s not the strongest that survives, it’s not the most intelligent, but it’s the most adaptable, and Indonesia is an adaptable nation,” he said.