Knowledge Governance in an Industrial Cluster: the Collaboration between Academia-Industry-Government

Europe of Knowledge |

Farah Purwaningrum

My book ‘Knowledge Governance in an Industrial Cluster. The Collaboration between Academia-Industry-Government in Indonesia’ examines the diverging strands of normative, social and territorial order of the science system. The insights from one of dynamic Asian countries – Indonesia provide interesting comparisons and contrasts with higher education and innovation policies in European countries. Several key findings of my research on Indonesian science system are as follows:


Lack of coordination

The institutional space afforded by the normative order shows a fuzzy and inconsistent norms and lack of coordination between ministries in Indonesia involved in the science and industrial sector. The Ministry of Research and Technology’s (RISTEK) science policy is geared towards national innovation system. The national research agenda composed by the National Research Council (DRN) and RISTEK is centralistic. It is decided in the capital city Jakarta. DRN itself act as a unit of RISTEK. The production of knowledge is aimed at seven areas: food security, energy, technology, transportation management, information and communication technology, defense and security, medicine and health technology, and advanced materials.


Romanticizing on the past of high-technology during the former President Habibie is also evident in the vision of IPTEK (ilmu pengetahuan dan teknologi/science and technology) for the welfare and progress of civilization. IPTEK and the knowledge produced from it is viewed as a panacea. The national innovation system strategy was later on carried out as a project by RISTEK due to the apathetic response from the local government. Indeed the matter of research and development depends substantially on the regional government commitment, which can be restricted due to limited local budget capacity and clientele related matters.


Liberalization agenda

Directorate of Higher Education (DIKTI) in Ministry of National Education (MENDIKNAS) are taking measures to liberalise the higher education system. However, it is temporarily halted due to the Constitutional Court Decision that regards education as a public good and secures the right to education for Indonesian citizens. The Court is a lonely guardian of the citizen rights in contrast to the liberalization agenda pursued not only by MENDIKNAS but also Ministry of Industry. The recent legal reform proposes the introduction of non-profit legal entity (Badan Layanan Umum) for the state universities in the end of 2012. Profit or non-profit character of the organization is to be dictated by empirical reality instead of normative purview.


Industrial policy is also emphasising the liberalization agenda by reliance of its fiscal policy through tax incentives rather than through standardization mechanism. The current Master-plan for the Acceleration and Expansion for Indonesian Economic Development 2011-2025 is ambitious in its plan of connecting diverging hubs in different islands in Indonesia. The capital demands of this Master-plan is considerable large namely up to 400 billion US dollars, this is six times of Indonesia’s GDP in 2010. Java Economic Corridor focuses more on services, the remaining corridors are still largely based on natural resources.


From the analysis of the clusters related policies it becomes evident that 35 clusters specified do not point out to a bounded area of cluster either in a specific area such as the one in Ceper, or in Jababeka where there is natural industrial agglomeration. The extent of the feasibility of this policy in practice is contentious first due to the patchy bottom up planning and second due to sectoral planning due to lack of coordination between ministries. The Investment related laws exhibit friendliness towards tax holidays, tax incentives and labour policy. Less is shown in terms of reliance of smart regulation as incorporated in the technical engineering standards or national standardisation norms. The automotive industry policy also shows fiscal intervention in terms of import duty and luxury tax. There is a vacuous absence of industrial policy for knowledge transfer in the automotive sector, which exemplifies the reliance of the knowledge transfer process from the principal customers.


Research system: patronage, entrepreneurship and scattered resources

Universities are the main scientific knowledge producing organizations in terms of research as well as national publication activities. The pattern I observe from the statistical inference of the allocation of Insentif (research incentive programme) RISTEK grant from 2008-2010 and from the publication of scientific national journal indicates is geographical disparity of knowledge distribution. Practices of research-based organizations indicate that the science system still represent the tension of patronage, personal linkage harnessed with good relations. These practices enact the social space of interaction between actors. Centralization still persists. Researchers cope with the lack of funding by resorting to taking up additional jobs. Some are being entrepreneurial.


Moreover, the fluid character where ministries have their budget for research creates different doors to attain research funding. This underlines the fact that the existing capacity of research is restrained, resources are scattered due to ‘shared poverty.’ Further research is evaluated in terms of completing administrative requirements in the fiscal year, which may hamper the linkage between industry and research institutes. Nonetheless there is linkage between academia and industry as exemplified in the case of Biomaterial R&D and the Toyota case. The different modes of representation of academia and in industries may inhibit the knowledge flow. The case of Polymer Technology Center indicates how an academia is becoming more entrepreneurial.


Decentralization: connecting knowledge with locality

The territorial order then asks for the progress on decentralization and how the decentralized government as encapsulated in the pemekaran (splitting of administrative regions) process partake the role in development of bonded zone, and connecting knowledge with the locality. There is a plan of developing a bonded zone which will include Jababeka, Lippo & Delta Silicon, Hyundai, EJIP, Bekasi Fajar, MM2100 and Deltamas. It is likely that the bonded zone in the Bekasi district which will have the same fate like Batam, it will be relying to the central government funding, facilitated by the West Java Province with Estate Companies.


The District Government of Bekasi is facing challenges due to bureaucratization. The bureaucratization process is interwoven in the practices of the officials in which there is a high regard for more lucrative administrative positions than for functional positions. The rapid rotation of manpower also implies the loss of knowledge in the government. Constraints in the usage of budget is visible, this is aggravated with patron-client relations between the parliament and the local government and corrupt practices in the usage of budget. Pemekaran contributes to the bureaucratization process and the rise of bureaucratic elites. Thus pemekaran allows the geographical space in a decentralized government unit for a competition for resources.


This sketches the picture of the science system in Indonesia, where the authority relations and practices of the policy that keep the order of science system arises from differing orders. They signify on the one hand, the continuities of past practices of patronage, ‘shared poverty’ and centralization, and on the other hand formally there is increasing regulatory trend to expand and liberalize even more spaces. This collaboration, competition, centralization and liberalization construe the spaces of the science system in Indonesia.


Dr. Farah Purwaningrum is a sociologist with an interdisciplinary background in law. She holds law degrees from Universitas Islam Indonesia, Yogyakarta and the London School of Economics and Political Science, UK. She completed her Dr. phil. in Rheinische Friedrich Universität Bonn, Germany in 2012. She currently holds a lectureship in sociology at the Institute of Asian Studies, Universiti Brunei Darussalam. She has a keen interest to do research in areas of science policy, science system and knowledge governance. She will present her recent research at the ERA CRN section on the global governance of knowledge policies at the ECPR General Conference in Montreal, Canada, August 2015.