Connecting all the dots: Identifying the “actor level” challenges in establishing effective innovation system in Indonesia

• Limited interaction between developers and users leads to the creation of irrelevant technologies.
• Low adoption is due to irrelevant and economically less competitive indigenous technology.
• Synchronizing regulations and actions is a critical challenge.
• Low absorptive capacity of domestic industries contributes to low technology adoption.
• The role of a government-affiliated intermediary agency is not yet significant.

Establishing an effective innovation system is a gigantic effort for Indonesia and surely will face many and diverse challenges. The challenges can be found at all three levels (core, ecosystem, and anatomy) within the innovation system. At the core level, communication and interaction between domestic technology developers and users have to be intensified. At the ecosystem level, it is more complicated for creating a favorable atmosphere for nurturing an effective and productive innovation system which will significantly contribute to economic growth and social welfare improvement. Hard challenges at the ecosystem level are to harmonize all regulations and public policies such that they are more in favor of innovation system development; and to synchronize prioritized programs and activities of all related public and private institutions. Deeper insight into each actor of innovation system and the challenges faced is required for advancing innovation. This analysis uses case methodology to identify these challenges. Scientific collaboration among technology developers is low; therefore, it could cause inefficient use of national R&D budget. In-house R&D activities and technology absorptive capacity of domestic industries are also low. Finally, the role of an intermediation agency is not yet significant.