Standards, Innovation, and Industrialisation: Three Keys to Becoming an Advanced Industrial Nation

Indonesia’s government-announced 8% economic growth target for 2030 requires a productivity leap—not merely an increase in raw commodity-based output. In the modern economy, industrial competitiveness is determined by the capacity to produce technology-intensive, safe, and consistently high-quality products that can access global markets with low transaction costs.

This is where the “three-part formula” of standards, innovation, and industrialisation converge. To date, innovation discourse has often stopped at R&D expenditure figures, patent counts, or research project numbers. However, economically impactful innovation is innovation that can be replicated at industrial scale—possessing clear specifications, repeatable test methods, and evidence of quality conformance recognised by the market.

Literature demonstrates that standards are not merely technical rules; they define interfaces, critical safety features, and even innovation assessment metrics—their relevance increasing with digitalisation, global trade, and sustainability measurement requirements. In this context, standardisation is itself recognised as part of innovation activity.

Experience across many sectors teaches that standards emerge from innovation, yet innovation is often “accelerated” by standards. Classic studies in design and manufacturing show that standards’ benefits for interoperability, safety, and process uniformity typically outweigh their potential constraints on creativity. In other words, good standards are not “brakes” but rather “rails” that enable ideas to advance safely towards the market.

However, standards cannot stand alone. They require quality infrastructure: metrology (measurement standards), reference materials, testing laboratories, accreditation systems, certification, and market surveillance. In high-technology industries, “non-product” standards such as measurement methods and conformity assessment procedures are prerequisites for improving research efficiency—without comparable data, research becomes wasteful and difficult to transfer to production.

National measurement institutes also play a role in transferring primary standards into references usable by industry for calibration and quality control. The impact is not merely technical but economic: transaction costs for marketing complex products fall because quality claims can be verified.

Therefore, if Indonesia wishes to accelerate industrialisation through mineral downstream development (nickel, bauxite, copper, and their derivatives) and bio-based downstream development (palm oil, coconut, and other plantation commodities into chemicals, biofuels, and biomaterials), it must position standards as “productivity infrastructure.”

Economic studies of standardisation in several advanced countries estimate standards’ contribution to growth at approximately 0.7-0.8% of GDP—a figure underscoring that standardisation is an economic policy instrument, not merely a technical matter.

Empirically, research examining the relationship between standardisation, R&D, and productivity reveals patterns relevant to countries pursuing industrialisation. Standardisation and R&D can function as “two engines” driving productivity: standardisation operates primarily through improved technical efficiency and technology diffusion, whilst R&D drives technology development and efficiency gains simultaneously.

However, research also reminds us that R&D’s impact is not automatically positive in the long term if implementation is hindered by knowledge diffusion, skills readiness, and supporting infrastructure. This illustrates the classic problem of “rising patents, stagnant productivity” when downstream ecosystems are unprepared. The implication is clear: Indonesia’s innovation agenda must incorporate a “standardisation pathway” from the outset.

European practice, for instance, emphasises that standardisation is an integral part of R&D—research, prototyping, and standardisation overlapping rather than sequential. They even employ rapid workshop mechanisms to generate consensus-based technical agreements and test research results as “experimental” standards. The core lesson: without a package of standards (specifications, test methods, and quality references), innovation will struggle to exit the laboratory for the factory.

Meanwhile, we live in an era of geoeconomic confrontation and supply chain fragmentation. The latest global risk report assesses that partial decoupling (trade, investment, finance, technology ecosystems) could raise business costs and slow global economic activity.

In this situation, Indonesia requires intelligent economic resilience: building domestic capacity for critical components whilst continuing to leverage global trade and networks to reduce costs and accelerate learning.

Supply chain literature warns against becoming trapped in myths—for instance, that “overly lean” supply chains are the root problem, or that foreign supplies inherently make systems less resilient.

Empirical evidence shows that involvement in global supply chains often actually aids faster recovery; resilience solutions are more effective when combining inventory, backup capacity, and contingency capability designed collaboratively within public-private partnership frameworks.

In Indonesia’s context, standards and conformity assessment become the “common language” linking local suppliers with global buyers, whilst simultaneously protecting domestic consumers. The crucial question is: how to execute these three keys to pursue 8% growth?

I propose six practical steps. First, develop a national standards roadmap based on industry priorities: batteries, materials and semiconductors, pharmaceutical chemicals, mineral processing, bio-based chemicals, and renewable energy products. The focus is not accumulating Indonesian National Standards (SNI), but selecting standards that determine market access.