The Urgency for a Knowledge and Innovation Ecosystem

Opinion article written by Center for Innovation Policy & Governance (CIPG) Advisor, Yanuar Nugroho. This article highlights the fragile foundations of Indonesia's 2015 vision if knowledge is not truly integrated into policy. So, building a knowledge and innovation ecosystem is urgently needed

The Urgency for a Knowledge and Innovation Ecosystem

This article was originally published in Tempo Magazine, 8 August 2020

Indonesia has launched a vision: To become a just and prosperous nation that sits as one of the world leaders in 2045. Hard work has been done almost non-stop in the last five years to make it happen. But then the COVID-19 pandemic hit. More than 113,000 people have tested positive and more than five thousand died, the economic growth was minus 3.68 percent, unemployment and poverty are soaring, and a recession hit. This epidemic has wiped out many development achievements.

But it also showed the reality. The foundation for Indonesia’s 2045 vision is fragile: knowledge is not really integrated into policies. Perhaps the intention is to be cautious, but what we see is a stuttering response to this pandemic. Policies are accused of not being evidence-based, while communication and data are not transparent, plus half-hearted execution in the field. Fake news has pervaded, shoving common sense aside. Between indifference or frustration, the public is increasingly apathetic as the government tries to balance the ‘stop and go’ between health and economy.

As a result, the pandemic here has gotten out of hand and positive cases continued to climb. While out there, countries are getting ready to open up, even though a vaccine is not yet available. Travel bubbles are designed between countries that have managed to control the outbreak for the mobility of their citizens. Trade in goods and services is also returning slowly. But our country is not included in there. Nobody trusts the way we have handled the pandemic, worried that they may catch it again. As a result, investment has stalled, exports and imports are hampered, and the slumping economy is slowed down even more.

So, if we do not immediately fix ourselves to strengthen our foundations, the 2045 vision may as well stay a dream.

That foundation is the knowledge ecosystem. Indonesia 2045, with a desire to be the fourth or fifth largest economy on earth, is a country with a knowledge and innovation-based economy. We will no longer rely solely on trading commodities or relocating labor-intensive and footwear factories. However, we still have not seriously prepared the knowledge and innovation ecosystem which is actually the key to policy and development.

Integrating knowledge into policy

Knowledge should be integrated in every development policy and plan. However, that has not happened. As a result, the intended results of a policy often fail to take into account the unintended consequences. These consequences are often not identified, anticipated, or even mitigated. For example, infrastructure to boost the economy. The Trans-Java toll road built in 2015-2018 has shortened the journey of goods and people, improved logistics performance, and ultimately economic growth in Java. However, as it turns out, the toll road has unintentionally crippled the economy of the people on the North Coast of Java (Pantura). Shallots and salted egg vendors along the Pantura route in Brebes have lost their buyers. Only after this situation had become known, some of them were accommodated in the rest areas.

There are many similar examples, from protests against the construction of Semen Indonesia factory in Kendeng which has protracted and resulted in casualties, the construction of airport-seaport infrastructure marked by conflicts with local residents, to the rejection by environmental, human rights and labor activists of the draft “Omnibus Law” for Job Creation. All these policies and developments were intended to boost economic performance. However, whether consciously or not, they have left serious social, cultural and ecological impacts that should have been anticipated.

All this happened because the policies or development plans failed to consider non-technical and non-economic aspects that may result in the unintended consequences. Policies should be based on knowledge and evidence. But that is not always the case. The relationship between the two is often non sequitur: knowledge is born in an intellectual moment (research, reflection), while policies are made and decided in a political moment (negotiations, political lobbying).

The implications have been serious: knowledge must be ensured and deliberately used in policy making or development planning. This is a prerequisite for progress. How? By building a knowledge and innovation ecosystem.

Knowledge and Innovation Ecosystem

A developing country like Indonesia will fall into a ‘middle-income trap’ unless it switches from an economy driven by accumulated resources growth to an economy driven by knowledge, productivity and innovation. But this is still weak in Indonesia. Our knowledge and innovation index lags behind other ASEAN members (INSEAD, 2019; WB, 2019); the knowledge and innovation sector also lacks practical, conceptual and policy attention – which is reflected from the non-functioning ecosystem, even the utter lack thereof.

This knowledge ecosystem consists of actors and elements. There are at least four actors (Hertz et al., 2020): (i) knowledge producers, usually universities, government and non-government research institutes/think tanks; (ii) users who utilize knowledge, such as governments that create and implement rules/regulations, and policies; (iii) enablers, such as the government as the maker of regulations, or donor/funding agencies, and philanthropy; and finally (iv) intermediaries that bridge and advocate for the importance of knowledge, such as media and civil society organizations.

Meanwhile, there are at least five elements (Nugroho, 2020). First, a regulatory framework so that all actors in the knowledge ecosystem can move and work. Law Number 11/2019 regarding the National System of Science and Technology (Sinas Iptek) is the game-changing policy as it emphasizes the importance of the position and role of knowledge as the foundation for policy making and development planning. However, derivative regulations are needed to implement it by taking into account the role of the Ministry of Research and Technology/National Research and Innovation Agency (BRIN) as the ‘axis’ of policy research and ‘referee’ in policy making.

Second, an institutional framework to regulate the roles, obligations, responsibilities and relations of actors with the aim of integrating knowledge into policies. R&D agencies of Ministries/Institutions must ensure that policies are produced based on evidence, in coordination with the Ministry of Research and Technology/National Agency for Research and Development and Bappenas whose architecture is organized by the Ministry of Administrative and Bureaucratic Reform. Private sector/industry participation must be encouraged. The roles, responsibilities and networks of media and civil society must be clear in promoting the use of knowledge in development policies and public decisions.

Third, governance and accountability mechanisms to manage resources and networks in an open and transparent manner to ensure that the knowledge generated can be accounted for as a basis and reference for policy making. In particular, for example, competition mechanisms for funding should ensure checks and balances on why certain research or innovations are funded while others are not. Likewise, there has to be accountability in promoting the commercialization and downstreaming of research results, including publication channels with a credible peer-review mechanism.

Fourth, incentive and funding mechanisms so that all actors can move independently, collaboratively and sustainably. Funding allocations need to be guaranteed, both for universities and research institutions (Rakhmani & Siregar, 2016). An Endowment Fund or a Trust Fund scheme can be an option. This is not only a matter of numbers, but also management that is different from the annual management of state finances, and the bureaucracy that must be simple (Brodjonegoro & Greene, 2012). This mechanism is important for bridging the ‘valley of death’ between invention and commercialization of innovation, besides fostering resource mobilization initiatives, both locally (for example through tax cuts) and internationally (collaboration).

Finally, the development of the greatest asset of a knowledge ecosystem: the people. Career paths, remuneration schemes and appreciation for researchers and lecturers need to be reorganized. The Tri Dharma Perguruan Tinggi, the credit system (kum) must be reviewed for its suitability to encourage performance (Nugroho, Prasetiamartati, & Ruhanawati, 2016). The capacity of the State Civil Apparatus and government institutions must be improved so that the bureaucracy understands why knowledge must be the mandatory basis of every policy, and why all its impacts must be anticipated.

These five components in the knowledge and innovation ecosystem produce at least three outcomes. One, an increased capacity for access and use of knowledge by individuals, communities, and policy makers to build a society with a scientific temper (Nehru, 1946). Policies are more comprehensive and anticipatory because knowledge is integrated in their making process. Two, downstreaming the results of research and innovation so that they can be marketed or used for economic/social benefits, and boost progress, national competitiveness and quality of human life. And three, increasing the state capacity, namely, the state’s ability to build, starting from drafting regulations, planning, implementing, to monitoring. This is reflected in its institutional capacity and civil service capacity whose performance can be judged by the efficiency and effectiveness of its processes and governance.


Despite battering us, this pandemic has been eye-opening: building a knowledge and innovation ecosystem can no longer be delayed. This is hard and systematic work from upstream to downstream, across actors and sectors. Although not a guarantee, President Jokowi’s political commitment is urgently needed, not just as a legacy or memory, but to be the key to the success of building this ecosystem. We must make sure that Indonesia still stands on its feet to achieve our dreams at the age of 100.

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