Tue, 24 Feb 2009
From: The Jakarta Post
By I M. Dennis Pratistha, Jakarta
When will Indonesia have a globally recognized internet and technology company? This is a difficult question to answer, because our governments have focused mostly on the natural resources sector. Many incentives and initiatives backed by the government are directed to the energy and agriculture industries, while the innovative technology industry is given limited attention.

The enormous attention directed previously to the natural resources sector is understandable due to the bull market in commodities. Our economy significantly benefited from the profit windfall, foreign and domestic investments, employment opportunities and tax revenues. The current slowdown, however, means the government needs to realign their strategy in order to maintain growth and national development. Developing the innovative technology industry is an alternative option for the government, which will be beneficial not only for our economy but also for our pride.

The country's large population and consequent human resources at our disposal will, logically, enable us to develop a robust and globally recognized innovative industry. In the *70s and *80s our government started to develop the industry, with the establishment of state-owned enterprises like aircraft producer PT IPTN and telecommunication company PT INTI. IPTN successfully developed small to medium commercial airlines and INTI successfully developed base transmission station equipment and other telecommunication equipment used by local operators. These companies were reasonably successful until their demise due to the Asian economic crisis.

In developing the blueprint for the innovative industry, our government needs to learn from strategies used by other countries in developing their innovative technology industry, such as China and India.

The first strategy involves stimulating the innovative and creative environment. The environment can be stimulated by encouraging multinational technological companies to build research and development centers and manufacturing facilities here. The collaboration of the government with reputable companies enables the transfer of knowledge to local workers; helps develop companies to deliver niche products and to serve the multinationals.

China, for example, built the Hangzou city industrial complex specifically to accommodate technology firms, provided tax exemptions and low interest financing. China has earned a good reputation by developing several successful global technology companies, such as Huawei, ZTE and Lenovo.

The second strategy relates to developing human resources. Skilled workers can be developed by encouraging students to study fields that support the industry. Software designers and engineers are exempted from income tax in China, thus attracting skilled workers to the specific fields.

The third strategy involves acquiring public endorsement and trust in using Indonesian made products. Initially we can develop companies which cater for local consumption and then slowly build a global reputation once the necessary experience and portfolio is acquired.

The fourth strategy relates to entrepreneur support. The government needs to support entrepreneurs either directly or indirectly. Direct support can be provided through grants for product innovation, tax breaks and cheap financing for innovative companies. Indirect support can be presented through joint programs with private sector.

The fifth strategy relates to copyright. There needs to be clearly stated and enforcement of copyright laws for innovative products and services. Copyright laws will prevent infringement and piracy, thus protecting the company's investments in innovation.

Having a robust innovative technology industry will elevate our nation's image, by being recognized as a country that produces highly skilled workers and cutting-edge technological products - enabling Indonesia to be the same calibre as Japan, South Korea and the US.

The writer is the chief executive officer of PT. Demeta Telnet, a telecommunications contracting company in Jakarta. The article is the writer's personal view.



News Search/Filter
Transaction Rates
19 Aug 17
Buy
Sell
BTC1
53,646,549
53,646,549
Taxation Exchange Rates
31 Aug 16 - 06 Sep 16
USD 1
13,232.00
AUD 1
10,043.30
CAD 1
10,213.70
DKK 1
1,999.40
HKD 1
1,706.22
MYR 1
3,283.28
NZD 1
9,623.63
NOK 1
1,605.23
GBP 1
17,433.70
SGD 1
9,757.68
SEK 1
1,569.45
CHF 1
13,631.10
JPY 100
13,101.00
MMK 1
11.01
INR 1
197.29
KWD 1
43,920.70
PKR 1
126.23
PHP 1
285.00
SAR 1
3,528.53
LKR 1
91.12
THB 1
382.08
BND 1
9,756.53
EUR 1
14,885.50
CNY 1
1,987.61

Okusi Associates: Indonesian Business & Management Services