Governing Innovation

Minimizing the risk of technological change in Indonesia

By Gilang Ardana
Monday, January 29, 2018

A strong regulatory framework and institutional capacity needs to be prioritized to address emerging technological innovation issues. This was the key takeaway from the Center of Innovation Policy Governance research report “Innovation Outlook: Reflection of IT-based Innovation in Indonesia”.

The January 11 launch event featured three experts on telecommunications: University of Indonesia academic Yudho Giri, telecommunications practitioner Rachmat Affriadi Anggara and CIPG lead researcher Wirawan Agahari.

The research outlined the technology innovation milestones in Indonesia and how they affect people. Its aim was to understand the dynamics of information and communications technology based innovation by analyzing the forms of innovation that occur and the impact caused.

The research revealed several concerns that need to be addressed in light of technological innovation in Indonesia. 

The first is the issue of social inclusion. ICT may benefit people by providing resources (information, opportunities and skills upgrades) to improve their quality of life. However, as telecommunications infrastructure is not yet widely distributed, access is not available evenly to all regions and so is a source of inequality. The adoption of new technology will also demand a more comprehensive understanding from its users to maximize innovation and prevent negative impacts. People need to be empowered to select information and be aware of cyber security to avoid risks.  

The second issue is changing business models. Digital innovation has disruptive effects that can interfere with conventional business practices and lead to conflict and resistance. This includes the shifting of employment as companies shift from traditional workers to those with IT and data science backgrounds. This can lead to the loss of jobs in some sectors, and also the creation of jobs in new fields, which will change the country’s workforce dynamics. 

To help navigate these issues, CIPG suggested stakeholders in technological innovation prioritize the creation of a strong regulatory framework and institutional capacity. The government needs to realize the importance of a sound regulatory framework, especially to protect personal data and enhance cyber security.  There is a need to ensure healthy competition between players in the sector and to avoid a direct negative impact on people by the adoption of technology. 

In terms of institutional capacity, the report emphasized that governing innovation needs the involvement of all stakeholders – academia, business, government and the public. There is a need to align the digital economic vision of President Joko Widodo to the academic sector so the country can supply digital talent that fits market needs. 

IPG said that it hoped its research would contribute to technological innovation. 

“We hope these findings will become the basis for formulating opportunities, challenges and change agendas to address the IT innovation dynamic,” Wirawan said.

“Furthermore, we hope this study can help the government and others to maximize the benefits of digital innovation as a catalyst for the acceleration of national development.”

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