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Overcoming the Declining Competitiveness through SME Innovation

Totok Hari Wibowo Deputy Assistant for Technology Policy Assessment Agency for the Assessment and Application of Technology (BPPT) Jln. MH. Thamrin No. 8 Jakarta Indonesia 10340 totokw@gmail.com. Country Report: Indonesia. Overcoming the Declining Competitiveness through SME Innovation.

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Overcoming the Declining Competitiveness through SME Innovation

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  1. Totok Hari Wibowo Deputy Assistant for Technology Policy Assessment Agency for the Assessment and Application of Technology (BPPT) Jln. MH. Thamrin No. 8 Jakarta Indonesia 10340 totokw@gmail.com Country Report: Indonesia Overcoming the Declining Competitiveness through SME Innovation

  2. OUTLINE I. Rationale & Framework II. Institutionalizing SME Development Initiatives National Competitivenesss III. Initiatives in SMEs Capacity Building IV. SMEIC – Action in FY 2009 V. Modus for Synergy VI. Moving Forward - Technology Based SME Development

  3. Market Demand Costumer (End-demand) Producer (Intermediate demand) Industrial System R&D and Education System Big Enterprise Professional Education & Training Intermediaries Political System SMEs R&D and Higher Education Government New Technology Based Businesses R&D by Government Governance R & T Policy Specific Supra- & Infrastructure Norms & Standards Business Innovation Support IPR & Information Financial General Requirement for Government • Economic Policy • Macro Economic Policy • Monetary Policy • Fiscal Policy • Tax Policy • Trade Policy • Competition Policy • Culture • Value & Attitude • Openness for Change • Innovativeness & • Entrepreneurship • Mobility Industrial Policy Financial Policy Promotion & Investment Policy Basic Infrastructure Natural Endowment I. Rationale & Framework: A Concept of National Innovation System

  4. I. Rationale &Framework Improvement of Existing Businesses Knowledge & Competence Innovasion & Diffusion Value Chain The Role of SMEIC Learning process Knowledge & Technology Stock Interaction & Linkage Production Value Chain Improved Competitiveness Investment for Innovation in R&D Investment from External System New Business Development Improved ROI Investment to external System

  5. II. Institutionalizing SME Development Initiatives Industry Later Stage Financing Early Stage Financing Business Start Up Marketing & Commersialization “Testing the Water” Business Meeting Show & Exhibition Business Plan & Valuation Development IPR Application Evaluation of Commercial Prospect Research Evaluation of Technological Feasibility Idea Generation Drafting Research Proposal Stages Agents & Services Coordinated by SMEIC Risk Capital ENI IP Centre ENI, Incubator ENI, Incubator Research Advisor, etc

  6. II. Institutionalizing SME Development Initiatives - Towards Network of Innovations Role Function Business Development Consultation services on productivity, general management & financial management Technology Development Prototyping, technology licensing (technology transfer) Business Incubation Development of innovative start-ups HRD Training provider on apprenticeship and entrepreneurship Facility Provider Provide multipurpose facilities Expertise Provider Technical assistance on specific expertise Information Provider Information services: technology, market, financing schema, IPR, etc Accreditation Certification and accreditation of product or service Intermediaries Technology, Market & Financial brokering Networking Business partnership, R&D Cooperation, Consultative Forum

  7. II. Institutionalizing SME Development Initiatives - Guideline Towards Fusion Networks • Ubiquitous Center of Excellences (COEs) • Synergy in SME development – no person is alone • Fusion networks built by proven capability to innovate • Improved by collaboration evidence (willing to share for a piece of a bigger pie) • Grow using “guided innovation” where networks are united around common problems. What are the problems?

  8. II. Institutionalizing SME Development Initiatives - Position within National Innovation System PRESIDENT Parliement Coordinating Ministry for Economic Affairs SMEIC MOF BAPPENAS MOST • Ministries: • MOI • Coop and SMEs • Education • State-owned Enterprises • Others DRN State Owned (Strategic) Enterprises LIPI LAPAN Private Industries and their R&D Centers • Departmental R&D Institutions • Public Universities BPPT BATAN Private Research Institutions and Private Universities State Enterprises Bakosurtanal Venture Capital and Financial Inst BAPETEN BSN

  9. II. Institutionalizing SME Development Initiatives - SMEIC - Management National Team • Role: • National Policy • Coordination • Financing SC • Role: • Local Policy • Coordination • Financing Adv OC Role • Technology services • HRD • Intermediation & Business Networking • Facilitating access to Funding resources Local Team SC Adv OC ENI ENI ENI ENI ENI ENI: Enterprise Nurturing Institution

  10. Steering Committee Chair: Coordinating Minister for Economic Affairs Member: State Minister of Cooperatives & SMEs, Minister of Industry, Minister of Internal Affairs, State Minister of Research & Technology, Minister of Finance, Minister of Planning, Chairman of BPPT, etc Organizing Committee Chair: Deputy Chairman for Technology Policy, BPPT Secretary: Director of Center for the Assessment of Technology Diffusion Policy, BPPT Member: Higher level Officials of Departments and related institutions II. Institutionalizing SME Development Initiatives - SMEIC - Management

  11. Innovation Research, development and/or engineering activity aiming at developing of practical value and provisionof new scientific context, or finding new way for the implementation of the existing Science and Technology into product or production process. (Source: Law No. 18 Year 2002 on National Innovation System) SME Innovation Centre An institution that facilitates the transfer and diffusion of innovation to SMEs and promote the development of innovative SMEs II. Institutionalizing SME Development Initiatives – SMEIC - Working Definition

  12. II. Institutionalizing SME Development Initiatives - SMEIC - Roadmap M A R K E T 2008 – 2009 Demand pull, primary extractive-increased low added value MSME based industries Sustainable – Green MSMEs 2010 – 2015 Supply push resource based, new market, higher added value, innovation based MSMEs & Innovation-based networked-symbiotic industries > 2015 Market leader in selected niche: (genetic) resource and knowledge based MSMEs high end and boutique products and services Pilot Project Replication of Best Practises Agribusiness, manufacture and creative industry 12

  13. II. Institutionalizing SME Development Initiatives - SMEIC – Work Breakdown Structures WBS I. Institutional Strengthening WBS II. Network and Basis data WBS III. Intermediation WBS IV. Promotion of Innovation WBS V. Coordination, Monitoring and Evaluation 13

  14. Interconnectivity of Processes within National Innovation System (NIS) II. Institutionalizing SME Development Initiatives S&T Development Policy Sub-system Basic Education Sub-system S&T Utilization Policy Sub-system Business & Industry Sub-system HRD in S&T Sub-system The strength of NIS depends on the performance of the weakest node (or link). Which node (or link) is the weakest?

  15. III. Initiatives in SMEs Capacity Building

  16. IV. SMEIC – Action in FY 2009 • Pilot Project: Solo Technopark and Batam Outsourcing Area • Developing Formal Curriculum on Technopreneurship for undergraduate and graduate programmes • Developing Legal Base for Risk Capital Schemes • Building Database Support System • Intermediation, Promotion and Marketing, etc. 16

  17. V. MODUS OF SYNERGY - TECHNOLOGY INTERVENTION ALONG VALUE CHAIN Trading Sub-system Technology Intervention Technology Intervention Technology Intervention Technology Intervention Domestic Market Distribution Sub-system Export Market Input Factors Production Sub-system After Sales Technology, HR, Capital, IP, Inf. syst, Policy, Inst. Arrangement, Program, etc.

  18. V. MODUS OF SYNERGY - Commodity Rating Agro-based Industry

  19. V. MODUS OF SYNERGY - Commodity Rating Manufacturing

  20. V. MODUS OF SYNERGY - Commodity RatingCreative Industry

  21. VI. MOVING FORWARD -TECHNOLOGY BASED SME DEVELOPMENT 1. Technology Incubator 3. Business Innovation Fund Nurturing New SMIs 2. Business Incubator Prototyping Centers SMEIC 4. Extension works Technology Diffusion 5. Facilitation Start-Up Business Improved Existing Business W o r k i n g U n i t s BPPT LIPI MOI Risk Capital SMESCO Dir.Gen. Higher Educ. Universities Other Institutions Implementing Institution

  22. DAFTAR LEMBAGA INTERMEDIASI YANG LOLOS SELEKSI AKHIR Recipients of SME Innovation Centre Grants FY 2009

  23. DAFTAR LEMBAGA INTERMEDIASI YANG LOLOS SELEKSI AKHIR Recipients of SME Innovation Centre Grants FY 2009

  24. Thank you Questions, Comments and Suggestions can be directed to totokw@gmail.com

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