There are some worries on mismanagement of natural resources by local government after the decentralization law has been enacted in Indonesia. Also, there are some concerns associated with ineffectiveness of development programs at local and national levels on improving prosperity of the people. On the other hand, despite intensive and massive exploitation of natural resources which in many cases cause very serious damage to ecosystem, economic performance of Indonesia has not been significantly improved and income per capita is increasing but still relatively low for a resource-rich country like Indonesia. Income disparity seems to be widened.
Environmental problems, disparity and low income per capita, and disintegrating legal frameworks have become tough challenges for future Indonesian economic development. Under these circumstances, science and technology (S&T) have been expected to come up with the solution. However, Indonesian S&T sector has been somehow neglected for some decades. S&T budget has been very low (below 0.1 percent of Gross Domestic Product) and consequently will not be instantly ready to answer the challenges.
All of these constrains, along with the mainstream of S&T policy had been heavily in favor of supply-push approach for such a long time in the past, have caused very low percentage of domestic technologies adopted by users in almost all social economic sectors.
Consequently, it would take some time to reverse mindset of academicians and researchers from supply-push to demand-driven approach in developing technology. Similarly, it would also be as challenging to persuade business communities to adopt domestic technology, instead of importing available technology from global market. These two issues will be major obstacles in establishing an effective and productive national innovation system. Aligning policies of all government agencies will also be another challenge, especially if the processes are contaminated by multi-polar political interests. Local (political) interests in current decentralization era make this issue become more complicated.
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