Innovation at Heart

AmCham’s Innovation Mission seeks ways to help Indonesia develop an innovation-driven economy

By Gilang Ardana and Christ Ponderosa
Tuesday, March 13, 2018

Pharmaceuticals, fast-moving consumer goods (FMCG) and information and communication technology (ICT) companies met with key government stakeholders March 5-6 to discuss crucial intellectual property rights issues when AmCham Indonesia, the US Chamber of Commerce, and the Global Innovation Policy Center (GIPC) jointly held a successful 2018 Innovation Mission.

The mission, part of our ongoing US-Indonesia Investment Initiative, included a series of engagements with the Ministry of Law and Human Rights on the draft implementing regulations of the Patent Law, and meetings with other key government stakeholders covering broad intellectual property (IP) and research and development issues.

US Ambassador to Indonesia, Joseph R. Donovan and Creative Economy Agency (BEKRAF) Deputy for IP Facilitation and Regulation Ari Juliano Gema also spoke during the mission, which marked the launch of the US Chamber’s Global IP Index 2018.

The group also met with the board of the Indonesian Employer’s Association (Apindo), led by chairman Hariyadi Sukamdani, for a wide-ranging discussion on private sector concerns.

Innovation for economic growth

During the mission, the delegations emphasized that innovation will support Indonesia’s economic growth and create employment, provided that a robust intellectual property rights (IPR) framework is in place. Visits to several ministries also emphasized the critical need for a joint effort to promote IP awareness to broader stakeholders, in which the private sector could have a key role in the process.

At the Ministry of Law and Human Rights, Director General (DG) of Intellectual Property Freddy Harris spoke of his vision of the IP Office, and also the progress on drafting implementation guidelines for Article 20 of the Patent Law, the provision requiring that all patent holders manufacture or use their patents in Indonesia. Companies have long complained that Article 20 is out of step with best international practices. DG Freddy has agreed and has pledged to put in place a legal basis for companies to delay local manufacturing.

At the Ministry of Research, Technology and Higher Education, the delegation was received by the DG of Research and Development Strengthening, Muhammad Dimyati and DG of Innovation Strengthening, Jumain Appe. Both sides exchanged insights, including progress made in enabling more open collaboration with foreign researchers and universities.

The delegation also visited the Ministry of Industry and Ministry of Communication and Information Technology to further understand their role in the IP regulatory framework and IP promotion. During the industry ministry visit, AmCham and the US Chamber conveyed their stance on local manufacturing requirements embraced by several offices.

“If you push foreign companies to manufacture locally, what they bring is today’s technology, but if Indonesia wants to be a leader in innovation, the government needs to go beyond that premise and promote companies to do research and development – they will bring you the technology of tomorrow,” said Arian Ardie, the US-Indonesia Investment Initiative Coordinator

Broader engagement

This year, the mission expanded its reach to more stakeholders, covering an inter-agency meeting on national IP strategy with 10 plus government institutions involved; multi-stakeholder meetings with key associations and organization. The Global IP Index Launch reception brought together level government officials and a wider company audience.

On the first day of the mission, an inter-agency meeting discussed the progress of drafting the National IP Strategy (NIPS). It provided a good platform to exchange views between the delegation and the government on the drafting of the document. Dr Cita Citrawinda, one of NIPS’ expert team, spoke mostly on the educational, partnership and commercialization aspect of NIPS. 

Director of Patents Dede Mia Yusanti also spoke about and areas of cooperation between companies and the patent office. All speakers emphasized the critical need to promote awareness of a strong IP framework both to the public and policymakers.

On the second day, there was a multistakeholder meeting on IP. Senior Advisor to the Vice President, Sofjan Wanandi joined the meeting attended by key associations including the Indonesia Telematics Society (MASTEL) and the International Pharmaceutical Manufacturer Group (IPMG). The discussion emphasized the need for the private sector to push for greater awareness of IP to startups.

The eighteen representatives from 12 organizations and companies discussed challenges they face in fostering innovation and the increased competition from neighboring countries, such as Vietnam. Stakeholders agreed that ensuring Indonesia is more attractive for investment is critical.

In addition to explaining the government’s intention to strengthen anti-piracy enforcement, and clarifying e-commerce tax regulations, Sofjan Wanandi assured the group that the office of the president is determined to push dramatic action forward on many front efforts to encourage greater investment.

The Create launch

The mission closed with the Indonesia launch of the US Chamber of Commerce’s Global IP Index 2018 at the Mandarin Oriental Hotel. The report, titled Create, benchmarks the IP environment in 50 economies around the world and demonstrates how IP-driven innovation and creativity fosters economic competitiveness.  

“US-Indonesia innovators’ collaboration has the potential to change every aspect of Indonesia’s economy, making farms and factories more competitive, making cities smarter and safer, and connecting Indonesia’s 17,000 islands to simpler and cheaper telecommunications and travel,” said Ambassador Donovan during the launch.

“We encourage the two countries to continue dialogue to champion IPR, to generate breakthrough solutions to global challenges, and increase public awareness.”

This was echoed by BEKRAF’s Deputy for IP Facilitation and Regulation, Ari Juliano Gema, who also emphasized the need for continued collaboration for IP promotion.

“This year and next, we hope to collaborate with other Indonesia government agencies, the US Embassy and US government institutions, and AmCham Indonesia to conduct several activities related to IP development in Indonesia,” he said.

US-Indonesia Investment Initiative 2018

The mission was also the starting point for the 2018 US-Indonesia Investment Initiative (USIII), which over the last several years has explored the many dimensions of the economic relationship between the US and Indonesia. Now entering its sixth year, the USIII offers US companies the opportunities to engage directly with the Indonesian government to better understand and gain greater access to the Indonesian market.

"The Investment Initiative has really become a key place to deepen relationships between the US private sector and the Indonesian government," said AmCham Indonesia’s Managing Director Lin Neumann. "We use the Initiative to seek solutions and find a path forward on numerous issues."

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