Surely, there is close relationship between innovation and global competitiveness. According to report made by Information Technology and Innovation foundation, western leadership is being challenged by rapidly advancing Asian nations. This report stated that China, Singapore, Japan, and India are listed among top countries in their achievement on global competitiveness and innovation progress in the last decade. Furthermore, China and Singapore are listed as two highest ranked nations in their rapid progress on competitiveness and innovation. Meanwhile USA, UK, German and other western capitalist countries are listed below those Asian nations. It means in the coming decade, Asian nations will be more competitive and innovative than western countries. In his optimistic point of view, former Singaporean diplomat Kishore Mahbubani wrote there that will be a shifting from Western to Asia.

While other Asian countries are rising, Indonesia is still trapped in stagnation of innovation. Indonesia itself is listed number 54 in Global Competitiveness Index. According to World Economic Forum the driven force of Indonesia’s development is still in the stage of transition from factor driven (infrastructure, macroeconomic policy, etc) to efficiency driven (Good and Labor Market Efficiency) while other Asian Countries such China, Korea, Taiwan, and etc. has been listed in the stage of innovation driven.

With its democracy and Muslim moderate majority, Indonesia should have been following the path of marching toward modernity passed by other Asian nations. The problem for Indonesia is how to fostering innovation Indonesia. At least, there are two major enabler of innovation to be aware of by the government; first is education, second is the incentive

China and India in recent decades are predicted to beat the United States in the field of technological development. One of the most decisive factors of this change is the rapid development of educational institutions that impact upon the development of technology. Everyone knows, now the American educational system is in times of crisis. Year after year, the American students are increasingly unable to compete with students from Asia in terms of science and mathematics. Year after year also, the statistics showed the American schools increasingly under the international rankings. And problems in the United States education system is not a problem but a problem of education quality access for citizens less fortunate. In the United States, public schools far worse than private schools and lower class citizens are not able to attend the best schools.

Education is a matter of opportunity and access. India shows how the development of technology and knowledge dashed when India began to leave the spirit of caste in Indian society. Then what is the relationship between the losses of caste to the spirit of technological developments? Simply, more brains and talents that previously did not have the privilege to gain knowledge can finally feel the delicious science. These talents provide the magic for India. The key to the success of India is a population that can enjoy education. So many Indian scientists who formerly came from lower castes. But thanks to education, they now become the backbone for the rise of India.

Indonesia should create education that fostering innovation. Instead of having the character of education in innovation era, Indonesian education is still characterized as education for the industrial age where schools educate student not to understand but to memorize. Indonesian education like a school bus rolled along the highway, with a teacher standing in front and show interesting and important sights, but to remind the passengers that, they cannot come to explore what is on the side of the road. As a result students who wish to pursue their interests and passions have to do it themselves

Innovation and Public Policy

The public sector policy makers are instrumental in creating innovation. Policy makers are able to innovate by using policies that create incentives for business player, both in the private sector formally and informally, to continue to create small innovations consistently. Effective policy requires an understanding of the relationship of the public sector with the overall economic performance. We must see the public sector is not out of economic activity, but rather an integral part of the economy itself. Today, Singapore, China, and other Asian Countries are actively changing their laws to make themselves more competitive in global business. Furthermore, some of these countries put in place incentives for firms so that they can foster their innovation.

Take for example the convergence Bill discussed in the House of Representative. Structure of the Indonesian telecommunications industry today is still vertical. These vertical market barriers the entry of new players. Such industry structure tends to strengthen the position of the incumbent. The extent of the network, and the amount of assets owned by the incumbent experiences; and high sunk cost and initial investment of network development resulting in high barriers to entry for new players. This will inhibit the emergence of competitiveness and new innovation. With this Act, the market structure is expected to be more easily competitive for new players to enter. Along with the existence of a competitive market, innovation will accelerate increasingly.

The vested interest of major player in the business will certainly inhibit the formation of this Act. In the discussion of this bill in the House of Representative, we will be able to see the tendency of government; whether to support the creation of global competitiveness through innovation or support the big players in the industry.

So, the major enablers in increasing Indonesian global innovation are nothing but education policy and government regulation in creating business competitiveness. China, India, and other Asian rising star have proven that these two enablers are major factor in fostering innovation and creating global competitiveness.