Saturday, October 13, 2012

Innovation in Indonesia - and what we can learn from it

I just spent the best part of a week in Jakarta, Indonesia. The occasion was the National Science & Technology Development Forum, organised by PAPPIPTEK, a research centre focusing on Science & Technology Development. This is a part of LIPI, the Indonesian Institute of Sciences. I gave a talk at the Forum, but will return to that in a later blogpost. In the meantime, here are some insights into innovation in Indonesian industry that I gleaned from my interaction during my visit.

Innovation in Indonesian Industry

The overall innovation story in Indonesia doesn’t sound too different from that of India - low spending on R&D, limited interaction between academia/research institutions and industry, and a lack of confidence in local research capabilities. Of course, there are some significant differences as well. Indonesia has not had the benefit of two powerful Indian growth engines – software and pharmaceuticals.

But, during my short stay in Indonesia, I saw at least two bright spots that signify Indonesia’s innovation potential.

PT Bukaka

During my stay in Jakarta, I had the opportunity to join a group from the NSTD Forum that visited Bukaka, a large engineering conglomerate located on the outskirts of the city, on the way to Bogor. Founded in 1978, Bukaka has industrial units that design and manufacture steel bridges; manufacture forgings for a variety of industries; build special purpose vehicles (like fire fighters, not the financial type SPVs!); execute hydel power projects on an EPC basis; etc.

But the impressive dimension of Bukaka is the senior management’s “can-do” attitude, willingness to learn by doing, and refusal to be daunted by the complexity of engineering or the nature of competition. A good example of this is Bukaka’s diversification into the aerobridge business. Bukaka entered the aerobridge business without prior experience and without a formal technical collaboration. But today it is a significant player in the manufacture and installation of aerobridges in Asia with significant installations in Japan, Hong Kong and India. I visited the aerobridge assembly facility – several elegantly engineered aerobridges were ready and awaiting testing and dispatch to Japan and India.

Looking at Bukaka’s success in the aerobridge domain made me wonder why Indian companies couldn’t have done something similar. I am sure a company like L&T, for example, has the engineering competence to design and manufacture aerobridges. My hunch is that Indian companies would have hesitated to make the upfront investments in R&D/engineering that would have been required to emulate Bukaka. That’s a pity because our reluctance to make such investments prevents us from getting into products like aerobridges that have considerable visibility and branding potential.

What also impressed me about Bukaka was the clarity of the senior management about the company’s strategy and where their competitive advantage lies. In response to a question about why Bukaka doesn’t make trucks, the company representative present explained how Bukaka’s advantage is in custom-built products that have a high engineering content rather than in mass production where they would have to compete with well endowed global companies with long experience in the field.

Warsito Taruno and EdWar Technology

Dr. Warsito Taruno was a star speaker at the NSTD Forum. Dr. Taruno is a pioneer of the Electrical Capacitance Volume Tomography (ECVT) field. His work in this field goes back to his days as a student at Shizuoka University in Japan where he was awarded his PhD degree. Later, he worked at Ohio State University, leading to outstanding publications and patents for extending the ECVT domain.

ECVT allows 4-dimensional tomography scanning and is very useful in early detection of breast cancer. Other applications of ECVT include power plant simulation and non-destructive testing.

Dr. Taruno moved back to Indonesia over 5 years ago and today leads teams doing research in the ECVT field and also developing and selling ECVT systems. ECVT work involves straddling disciplines as diverse as electronics and signal processing, high performance computing and sensors, and industrial process imaging and medical physics. Dr. Taruno strongly advocated building open innovation networks straddling academia and industry, citing the experience of the Virtual Center of Industrial Process Tomography and the OSU industrial Consortium.

Dr. Taruno is also pioneering electrocapacitance cancer (ECC) therapy. According to him, ECC therapy has the advantages of being non-invasive, non-oral, non –contact and is based on low voltage and dielectric polarization with limited side-effects. He has developed a wired and computed “suit” that can be worn for breast cancer therapy. According to information available on Indonesian websites, Dr. Taruno used ECC therapy to control breast cancer in his sister. However, it is not clear whether ECC therapy has gone through the trials and tests usually required of medical devices and technologies; some comments by the Indonesian medical fraternity suggest that his methods still need to be validated.

But notwithstanding these issues, Dr. Taruno is a good example of an accomplished scientist returning to Indonesia to pursue advanced science and technology. So far, he seems to be succeeding. Dr. Taruno should be a powerful catalyst for advanced yet practical science and technology in Indonesia. He has a strong sense that technology development and commercialization must go hand in hand. He believes that open innovation and strategic partnerships are the way forward. Stressing that cooperation is a more critical requirement than funding, he underlines that self-belief drives research.

In India, I haven’t seen too many scientists like Dr. Taruno who are able to straddle theory and practice. He seems to enjoy support from the Indonesian government and perform both academic and business roles (something that is again difficult in India) with ease. If Dr. Taruno is representative of what’s happening in Indonesia, it appears that in its own quiet way, Indonesia is creating powerful technology companies for the future.

Software start-ups

I didn’t have a chance to meet any Indonesian software start-ups, but I did have an opportunity to talk to Purnama Alamsyah, a researcher at LIPI. Purnama’s research shows that the success rate of software start-ups in Indonesia is very low – only 5 out of 500 start-ups he has been tracking are moving forward. While funding is a challenge, Purnama attributes quick technological changes and difficulties in sales / conversion of products into revenues for the low success rate. But, he says that the environment is quite dynamic, with new start-ups being created rapidly and existing start-ups morphing into new ones if and when their current business model doesn’t work. So, we should watch out for Indonesian software companies in the future.


In my short exposure to Indonesian industry, I got a glimpse of what is possible in that country, as also in other developing countries. Both Bukaka and Dr. Taruno impressed me by their intense desire to innovate to succeed. I was impressed by their quiet confidence based on their expertise and willingness to overcome odds. Both of their experiences underline the importance of openness to external inputs yet at the same time not giving up on internal efforts. They should be an inspiration not only to Indonesian innovators but to Indian innovators as well.

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