A strategy to increase indonesian private

A strategy to increase indonesian private sector r&d investment double tax deduction, a fiscal incentive policy Wisnu Sardjono Soenarso 1 and Hasmo Sadewo 2 1 Director of S&T Investment, Ministry for Research and Technology of The Republic of Indonesia, E-mail: wisnu@ristek.go.id 2 Head of Sub Division for Small, Medium, and Cooperative Enterprises, Director for Science and Technology Investment, Ministry for Research and Technology of The Republic of Indonesia, E-mail: hasmo_sadewo@ristek.go.id Abstract The knowledge-based economy concept encompassing science and technology might be able to sustain economic growth in a country which does not have natural resources to rely on. Exploitation to natural resources nowadays is abandoned, many countries start to use knowledge based on economics in developing its country. Therefore, Research and Development (R&D) expenditure becomes a crucial factor to improve its national innovation and capacity building. Science, technology, and innovation play an important role in many manufacturing products, which give a significant contribution to the national s Gross Domestic Product (GDP) and thus increase the national economy competitiveness. The utilization of Science and Technology (S&T) and innovation in industry is still low. It shows from the latest data that R&D investment in Indonesia is reported at 0.08 % of GDP, of which private sector contribution is at 18.7 % (LIPI 2009). Some incentives from government do not give a significant role to push industries to spend more with their investments into R&D; therefore, Indonesian government have been targeted R&D investment to 1 % of GDP. The Ministry of Research and Technology, The Ministry of Finance, R&D institutions, universities, and industries are explored in-depth about the role of incentives for the industry. Industries are expected to give much more of their contribution to the R&D development in Indonesia. The incentive includes the provision design criteria for R&D by double tax deduction policy. The existing incentives include fiscal and financial (research grant) regulations which should be complimented by tax deduction and double tax deduction which proposed to enhance industrial R&D activities. These regulations suppose to bring a favorable climate to private sectors to conduct R&D in Indonesia. R&D activities might influence all the potential stakeholders, government, academia, and business to collaborate among others to accelerate national development. Introduction Economic development of Indonesia as stated in Presidential Decree, Document number 32/2011 on The Master Plan for the Acceleration and Expansion of Economic Development of Indonesia (MP3EI) 2011 2025, has been defined as, Indonesia becomes a developed country, the top 12th powerful countries in 2025, and the top 7th powerful country in the world by the year of 2045 through the inclusive sustainable economic growth. The statement implies to the quantitative targets that must be achieved; GDP per capita in 2025 is expected to reach USD 14,900, while in 2045 is expected to reach USD 46,900 (Ministry of Coordination for Economic Affairs 2011). Those targets will be achieved if it s fully supported by the inclusive sustainable economic growth which not only rely on the consumption sector and exporting raw materials, but much more emphasize onto utilizing S&T and innovation. Indonesia s economic growth in 2013 was reported at 5.9 %. This number is expected to raise up to 6 8 % in 2020. Indonesia s GDP per capita in 2012 was USD 3,952; with the assumption that the R&D activity might contribute improving the competitiveness of the year 2020, the GDP per capita should achieve USD 9,000. The economic growth number expected in 2020 must be supported by manufactured product, which in 2012 was only at 20.8% of GDP (Kompas Newspaper 2013), much lower than in 2008 gained at 27.9%; however, in 2011, it has declined to 24.3%. In addition, a high and medium technology on manufacturing exports gave impact only at 18% national GDP in 2010; however, medium and high technology manufactured products import contributed 49% of the total national economy (OECD, STAN Bilateral Trade Database 2012). Therefore, Indonesia emphasizes S&T and innovation as a key component in achieving the economic growth target. Indonesian competitiveness condition Based on The Global Competitiveness Report (2013), Indonesian GDP per capita in 2013 has increased from USD 3,015 in 2010 to USD 3,592 in 2012. Indonesia has been classified as a country with an efficiency driven development stage. The competitiveness index of 4.5 placed Indonesia s rank at 38th out of 148 countries, far below Singapore, Malaysia and Thailand. Switzerland secured the highest rank, followed by the Republic of Korea, France, Malaysia and China. The key factor of the economic development success of these countries lies in the advancement of science and technology, invention and innovation improvement, as well as pursuit of science and technology in economic development. Based on the data obtained from the World Economic Forum (WEF) in 2014, there is a positive relationship between the growth of a country s innovation and TECH MONITOR Apr-Jun 2014 25

Indonesia Malaysia economic growth. This can be seen in the Figure 1. The empirical facts show that a country that has a low innovation index has a low GDP per capita relatively. On the other hand, increasing the index of a country s innovation will lead to the growth of GDP per capita. The incremental trend of innovation index is exponential, where the higher country s innovation index will follow the significant inclination of the GDP per capita, for example, Switzerland, Singapore, and Sweden. The huge impact of innovation on the national economic growth can be witnessed in several countries. Some new industrialized countries, such as the Republic of Korea, Taiwan province of China, and Malaysia have been consistently investing large expenditures to promote innovation Switzerland Singapore Figure 1: Relationship of innovation and GDP per capita Source: WEF, 2014, modified Table 1: Innovation index of the ASEAN countries Sweden and encouraging private sectors involved in S&T development. The Company Spending Index presented in 2008 2013 showed that those developed countries were more than 4.5 in a mean; however, the average index of Company Spending Indonesia since 2008 was less than 4.0 (WEF, 2013). The percentage of R&D financing to GDP in the Republic of Korea and Malaysia continually increase every year. The Republic of Korea R&D expenditure reached out 3.74 % of GDP, Malaysia got 1.07 % of GDP in 2010, and Singapore spent up to 2.09 % of national GDP (UNESCO, 2014). Indonesia s innovation was ranked 33rd and innovation index was at 3.82 in 2013, below Malaysia (ranked 25th and the innovation index at 4.39) and Singapore Country Score Rank Singapore 5.19 9 Malaysia 4.39 25 Indonesia 3.82 33 Brunei Darussalam 3.38 59 Philippines 3.21 69 Viet Nam 3.14 76 Cambodia 3.05 91 Source: Global Compewtitiveness Report 2013/2014 (ranked 9th and the innovation index at 5.19) (Table 1). This low rank shows that Indonesia s economic growth has not been relying on competitive advantage which is based on innovation (knowledge-based economy). Data recorded in 2009 showed that manufactured industries contribution amounted to only 0.02% of GDP. It indicates that a private sector requires support from government to improve its competitiveness through sustainable R&D activity in order to produce innovative products. The import-export balance shortcut data included technology component launched by OECD explains that importexport in Indonesia is mostly dominated by low-tech industries (OECD, 2012). This indicates that the competitiveness of Indonesian products is still low and requires S&T and innovation injection. This imbalance reveals that Indonesia has a very potential market for manufacturing products. Other data reported by UNIDO in 2013, also indicates a need for improvement to enhance the competitiveness of Indonesian industry. Indonesia s industrial competitiveness in the international world can be seen in Table 2. The Competitive Industrial Performance Report 2012/2013 by UNIDO explained that the position of Indonesia s industrial competitiveness is low among other Asian countries. From 135 countries, Indonesia is ranked 38th in the world. Some Asian countries which are leading on the industrial sector have better ranking, such as Japan (rank 1), Republic of Korea (4), Singapore (6), China (7), Malaysia (21), Thailand (23). Indonesia is slightly advance than the Philippines (44) and Viet Nam (54). Competitiveness linked with private R&D investment The new paradigm of economic growth in the future will no longer be based on the benefits of natural resources, but will be determined by the ability of a nation to produce high value-added commodities using innovation (competitive advantage). According to WEF, in order to achieve sustainable growth in innovation, it is needed for private sector s contributions in R&D activities. This contribution is indicated by the Company Spending on R&D. 26 TECH MONITOR Apr-Jun 2014

At this time, private sector s R&D financing in Indonesia is still low. This is due to the expensive and lack of access to financial R&D investments source. The R&D investment returns are also uncertain (Aswicahyono, 2012). Based on a survey conducted by the Indonesian Institute of Sciences (LIPI), R&D expenditure of Indonesia in 2009 amounted to 0.08% of GDP, the government proportion amounted to 0.04%, 0.03% from higher education, and manufacturing industries contributed only 0.02%. Most of Indonesian R&D financing still comes from government budgets while private contributions in R&D activities is still relatively small. The data of science and technology indicators PAPIPTEK-LIPI in 2011, shows that from 2001 2009, R&D budget from private sector and government respectively are 18.70% and 81.30 %. This condition is inversely proportional to the developed countries. Developed countries are generally funded their R&D from industry or business sector. Based on WEF report, companies in Indonesia which spend on R&D are ranked on number 23 under Singapore and Malaysia (Table 3). While compared with other ASEAN countries, Indonesia s ratio of R&D expenditure to GDP is far behind. The ratio of R&D expenditure to GDP in Malaysia and Thailand is above 0.5%, while Singapore has exceeded 2% of GDP (Pappiptek - LIPI, 2013). Another indicator that affects innovation process is the University-Industry collaboration in R&D. The collaboration of the two institutions can be established if it is supported by government policies which is conducive to the synergy of industry and academia. Collaborative research in universities and industry in Indonesia was ranked 30 of 148 countries in the world, far behind compared to Malaysia which is ranked 16th and Singapore in the fourth position. While in the ASEAN countries, the country is in position 3 under Singapore and Malaysia, on Brunei, Thailand, and the Philippines (Table 4). In the Government Regulation number 32 of 2011, The Master Plan for the Acceleration and Expansion of Economic Table 2: The national industries competitiveness Country UNIDO 2012/13 WEF 2012/13 IMD 2012/13 Japan 1 10 27 Germany 2 6 9 United States of America 3 7 2 Republic of Korea 4 19 22 Taiwan Province of China 5 13 7 Singapore 6 2 4 China 7 29 23 Switzerland 8 1 3 Belgium 9 17 25 France 10 21 29 Italy 11 42 40 Netherlands 12 5 11 Sweden 13 4 5 United Kingdom 14 8 18 Ireland 15 27 20 Indonesia 38 50 42 Source: Competitive Industrial Performance Report 2012/2013, UNIDO (2013) Table 3: Company spending on R&D of the ASEAN countries 2013 Country Rank company spending on R&D Singapore 8 Malaysia 17 Indonesia 23 Philippines 51 Viet Nam 59 Thailand 60 Brunei 67 Table 4: University-Industry collaboration in R&D of ASEAN countries year 2013 Country Rank in University-Industry collaboration in R&D Singapore 4 Malaysia 16 Indonesia 30 Philippines 69 Viet Nam 87 Thailand 51 Brunei 65 Source: The Global Competitiveness Report, 2013 Source:The Global Competitiveness Report, 2013 TECH MONITOR Apr-Jun 2014 27

Development of Indonesia, Indonesia will achieve 1% of its GDP for R&D expenditure. Indonesian Innovation Committee (KIN) has also supported the concept to be included on this regulation. The program was known as the Innovation Initiative 1-747, where 1 indicated the achievement of private sector s R&D expenditure of 1% of Indonesia s GDP. The Battelle R&D Magazine (December 2013), showed that the prediction of Indonesia Industrial association Investor Scientific journal/technical publication/trading Conference/ exhibition Non profit R & D Institution Government s R & D Institution and university aren t being innovation source for industries Entrepreneur Internet Government s R & D Institution Polytechnic R&D expenditure in 2012 was 0.1 % and 0.2 % of GDP in 2013. This number is not only government responsibility but the private sector also supports the number by spending its R&D. Pappiptek-LIPI (2009) conducted a survey of companies that already have a collaboration with R&D institutions and universities as well as in the companies that do not have R&D cooperation. In the survey, it revealed that only 17% of R & D Unit s staff University/other education institution Industry without R & D collaboration Industry with R & D collaboration Marketing and selling unit s staff Production unit s staff Consultant Commercial Laboratory Management s staff Table 5: The Indonesia manufacturing industry exports in 2013 Other R & D unit in holding company Row material/software distributor Custommer Competitor industries Figure 2: Innovation information source Source: Innovation of Manufacture Industries Survey, 2009, Pappiptek-LIPI No. Items (USD Million) Portion (%) 1. Coconut / Palm oil processing 20.661,00 18,28 2. Iron, Steel, Machinery and Automotives 14.689,20 13,00 3. Textile 12.667,00 11,21 4. Rubber processing 9.722,70 8,60 5. Electronics 8.527,20 7,54 6. Pulp and paper 5.644,50 4,99 7. Copper, Tin processing, etc. 4.843,60 4,29 8. Basic chemistry 5.083,90 4,50 9. Food and Beverage 5.360,00 4,74 10. Timber processing 4.724,60 4,18 11. Leather, Leather goods and Shoes / Footwear 3.934,00 3,48 12. Electric equipment 3.188,60 2,82 13. Others 13.983,80 12,37 Total Industry 113.030,10 100,00 Source: Zakiyudin (2014) the respondents have R&D cooperation with R&D institutions and universities. Majority of companies (83%) conduct their R&D activities themselves. The survey shows that government R&D institutions and universities are not a primary and the most influential source of innovation s information to the industry (Figure 2). In general, the information from the sales and marketing staff is the most influential source of information, followed by customers, industry associations, the production staff, conferences, materials, and software suppliers. Because not as the main reference for the industry, the role of R&D institutions and universities have not been optimized to support the development of national industry. Private R&D investment enhancement policy The increase in the population of Indonesia is in line with the increase in income and the growth of the middle income class. The growing population requires the supply of goods and services that are daily necessities. These needs cannot be met by the domestic products. The domestic production requires a strong industrial structure which requires R&D support. Indonesia also needs a strong industrial structure to utilize and giving value additions to the process of Indonesia s natural resources. However, due to the lack of R&D expenditure, the epitome of Indonesian s industry is contract and/or toll manufacturer. As an indication, the export of Indonesian main manufacturing industry products is still dominated by the export of raw materials (Table 5). Data on manufacturing export growth shows that the element of technological change did not have a role in Indonesia s economic growth. If industries such as the steel industry, electronics, processing of copper and tin, as well as power tools are supported by the R&D, the export value of Indonesian manufacturing industry can be improved. Therefore, the Indonesian government seeks to speed up downstream industries based on natural resources, especially the pharmaceutical industry and electronics. This effort also encourages foreign industries to relocate R&D 28 TECH MONITOR Apr-Jun 2014

activities to Indonesia by promoting incentives scheme and facilities. The Government of Indonesia, according to the President of Indonesia, on August 16, 2013 (Darussalam 2014), provided R&D tax incentives that are more specific to advance R&D activities. To improve the competitiveness of the goods or services produced, the Indonesian government has provided some facilities for business entities that conduct R&D as well as through donations to parties that conduct R&D. Indonesia nowadays has the fiscal facilities such as the Income Tax Act, government regulation, Ministry of Finance regulation and the Director-General of Tax regulation to support R&D activities. The regulations related to fiscal R&D facilities present today are given below. The Government Regulation number 35/2007 and also Act number 36/2008, stated that the Indonesian government will provide tax incentives in the form of income tax reduction or exemption of import duty fees for companies that spend on R&D purposes and activities conducted in Indonesia. These regulations should create conducive environment to make enterprise or institution to conduct R&D within Indonesia. The scheme also provides custom exemption for equipment which will be used in R&D activity (Table 6). Besides that, tax exemption is also provided to the private sector for financing the R&D institutions in the framework of research and development conducted in Indonesia. The company which is investing directly in specific sectors will also obtain compensation for damages in the form of investment allowance for 1 year if the cost of R&D spend in Indonesia. The Government of Indonesia also seeks to encourage the defense industry to allocate part of the company s net profit for research and development activities through Law no. 16 in 2013. Compensations for the company will be obtained in a reduction of the corporate tax. However, implementations of these regulations have not been successful. Many corporates show little or no interest in utilizing the tax incentives that are already available. It seems that other regulations are still needed to support the implementation of the fiscal incentives. The Indonesian government should immediately develop the regulation to support the fiscal incentive. As the fiscal incentives such as tax regulations are not optimally implemented, the R&D investment is also not optimally deployed in Indonesia. In Indonesia, expenditure contribution of private sector in R&D activities in the year 2011 was only 18.7%. In one of the provinces in Indonesia, East Java, the source of private R&D budget was only 9.75% of GRP in 2010 (Balitbangda Jatim and BPS, 2010). On a national level, R&D financing is undertaken by the government. This indicates that private industry has not been conducting research and development. In addition, their R&D activities may not be recorded and reported to the survey institution. The amount of this investment should be obtained by conducting a survey periodically. The last survey of R&D expenditure was conducted in 2008/2009 by Pappitek-LIPI. In 2013, Battelle made Indonesia s R&D expenditure prediction. It is also important to note that R&D conducted by foreign investment Table 6: R&D facilities regulations No. Regulation Main issues 1. Government Regulation Number 35 Year 2007 Private sector (industry) allocating a portion of income for R & D activities will receive incentives in the form of tax incentives, customs, and / or technical assistance for research and development. 2. Income Tax Act Number 36 Year 2008 (Article number 6) The company that issued the costs of research and development conducted in Indonesia can obtain tax incentives in the form of a reduction in income tax. 3. Government Regulation Number 93 Year 2010 The company that issued financial contribution to R & D institutions in the framework of research and development conducted in Indonesia can obtain tax incentives in the form of a reduction in income tax. 4. Government Regulation Number 52 Year 2011 5. Ministry of Finance Regulation Number 70 Year 2013 6. Director General of Taxation Regulation Number 16 Year 2013 7. Defense Industry Act Number 16 Year 2013 Private sector can earn additional 1-year compensation for losses (Investment Allowance) with provisions if the cost of research and development in the country in order to develop a product or production efficiency of at least 5% (five percent) of the investment within a period of 5 (five) years Goods for the purposes of scientific research and development are exempted from levy of import duty. Goods for the purposes of research and development of science and technology are exempt from income tax collection. Defense industry which allocates 5% of net profit for research and development activities will obtain tax relief company. TECH MONITOR Apr-Jun 2014 29

companies or an affiliate of the parent companies are still conducted in the overseas. Most of the multinational companies only carry out market research and product development. These figures may also indicate that the stimulus or fiscal incentives have not been utilized maximally by the business entities. In 2007, there were 52 applications that were approved for tax allowance. However, in the following years, the number of tax allowance applications dropped to under 10 approvals every year (Darussalam Tax Center 2014). In fact, researchers in the private sectors also have the capability to conduct research and generate new innovations. Indonesian government must develop new regulations that will make it easier for companies to undertake R&D (Ministry of Research and Technology, 2013). Many companies do not conduct R&D because the atmosphere is not conducive. It is necessary to increase the number of qualified researchers to support R&D activities in Indonesia. The company which conducts R&D requires qualified manpower resources and in sufficient quantities. For fiscal incentives too, the Indonesian government also encourages research collaboration between industry or private sector and R&D institutions. One of these financial incentives is National Innovation System (SiNas) Research Incentive. SINas Research Incentive is aimed in strengthening the National Innovation System (SINas) through developing synergy, productivity, and utilization of the national R&D resources. The incentive is in the form of funding for legal entities that carry out R&D activities, both in the form of individual and in consortium. SINas Consortium is a collaboration of three (or more) institutions consisting of elements of government R&D institutions, universities and industry which agree to find a new invention. The low increase in R&D investment is also likely due to a weak orientation towards competitiveness of those companies. This low investment is also due to lack of adequate support of government policy. Based on empirical studies, it is known that firms in developing countries are not successful in improving the efficiency even after getting an injection of capital and transferring of science and technology (Ministry of Research and Technology, 2013). In this case, innovation has not been used to improve the production efficiency and develop new product. Fiscal incentives policy of double tax deduction Various efforts other than financial incentives and development regulations need to be made in order to create innovative and sophisticated industries with high productivity. A fiscal incentive being discussed and expected to be issued in the year 2014 is double the tax deduction. This deduction is in the form of tax allowance, which is a reduction of taxable income up to 200 % for the corporate or institutions that issued the R&D financing. This incentive scheme is eligible to corporate houses which conduct in-house R&D in Indonesia. These incentives also cover the company cost of R&D which is conducted by Indonesian R&D institution. This R&D institution, such as universities and R&D institutions, is in need of approval from the government of Indonesia. The incentives also apply for the institutions which increase the number of researchers from previous year. ASEAN member countries, such as Malaysia, Thailand and Singapore have implemented the concept of incentives. In other words, incentives in the form of a deduction from taxable income or tax losses can lead to the absence of income tax payable. For this reason, this scheme is also equipped with an additional provision of carry forward or carry back where excess expenditure in R&D that led to the tax losses will be compensated to the next or to the previous year. In addition, there are three types of R&D expenditures that will be given tax reduction. Those R&D expenditures are the R&D employee salary, the R&D general spending and the R&D general spending plus capital spending for R&D activity. The Indonesian government will impose fiscal incentives to increase R&D investment, particularly private sectors in order to boost the competitiveness of Indonesia using knowledge-based economy paradigm. In addition, fiscal incentives should also be able to attract overseas R&D activity move to Indonesia. Some requirements for the design of fiscal incentive policy of this scheme are: (1) a significant incentives amount which would attract industry to conduct R&D, (2) a time period of incentive which is sufficient to match the industry s investment planning, (3) an easy, uncomplicated and inexpensive incentive application procedure, and (4) a clear-cut target of the industry recipients and also suitable with recipients competence. The application of the concept of incentives is expected to encourage industrial R&D activities in Indonesia so that the company not only buys the existing technology but is also capable for learning and technology transfer. This scheme is also expected to increase foreign direct investment (FDI) and to accommodate the pattern of beneficial cooperative relationship between the industry, academia and government. However, regulatory of Double Tax Deduction is still in need of support by other regulations, such as regulation of underwriting the risk of the use of domestic technology applications, regulation for the relocation of R&D activities to Indonesia, regulation in facilitating research collaboration betwen industry, universities and R&D institutions, as well as regulation of incentives facilities for technology transfer from large industry, university and R&D institutions to small and medium industries. Conclusion Innovation and economics are inseparable elements in the development of the nation s competitiveness. Countries that rely on excellence in competition through innovation and power will certainly be able to face competition in the global market. Meanwhile, Indonesia has not used innovation as a prime tool to develop its economic sector. Some indicators, especially innovation indicator and knowledge-based economy indicator show that Indonesia position behind some ASEAN countries, such as Singapore, Malaysia and Thailand. In addition, the industry in Indonesia has not yet been taking advantage of innovation in providing products which have high added value. Indonesia s exports are dominated by 30 TECH MONITOR Apr-Jun 2014

raw material exports only. Indonesia must change the pattern of economic development by implementing the knowledgebased economy paradigm in which new innovations will boost the economy. The Indonesian government has tried hard to reach the target of 1 % of GDP on R&D expenditures. To reach this target, it requires cooperation and partnership between the government and the private sectors. The lack of attention of private sectors to the R&D which activity can be caused by the investment in R&D which requires a substantial amount of money with uncertain returns. In contrast, overall, the government does not have enough budget to fund research and development activities. For the government as a regulator needs to address the market failure in the provision of both fiscal and financial incentives. This incentive will be able to create a favorable climate for the industry in R&D activities. In the year 2014, the Government of Indonesia will implement fiscal incentives doubling the tax deduction. This incentive is a reduction in taxable income multiplied for a business entity that issued the R&D financing. This incentive will complement a variety of regulations and incentives that have been previously issued in an effort to increase the contribution of private R&D funding for the improvement of the competitiveness of the nation. References ü Aswicahyono, Haryo (2012), Enhancing Science and Technology Investment, Enhancing Science and Technology Investment, Ministry for Research and Technology Indonesia, December 2012 (in Indonesia language). ü Center for Science and Technology Development Studies (PAPIPTEK-LIPI) (2010), Innovation of Manufacture Industries Survey 2009, Indonesian Institute of Sciences; Jakarta. ü Center for Science and Technology Development Studies (PAPIPTEK-LIPI) (2012), Indonesia s Science and Technology Indicators 2011, Indonesian Institute of Sciences, Jakarta (in Indonesia language). ü Darussalam (2013), Income Tax Incentive on Research and Development Expenditure: Comparative Study, Danny Darussalam Tax Centre; September 3, 2013 (in Indonesia Language). ü Darussalam (2014), The Correlation of The Tax Incentive To Income Tax With Research and Development Productivity, Private Sector R&D Investment Enhancement FGD, Ministry for Research and Technology Indonesia, March 11, 2014 (in Indonesia language). ü Hakti, Astera Primanto (2014), The Policy in Facilitating Incentive to Research and Development Activity, Seminar of Incentive Fiscal Support for Industry Which Conducting Research and Development In Indonesia, Ministry For Research and Technology of Indonesia; March 27 2014 (in Indonesia language). ü OECD, STAN Bilateral Trade Database 2012; https://stats.oecd.org. ü Rosdiana, Haula (2014), The Tax Incentive Policy to Enhancing Research and Development in Industry: Quo Vadis?, Seminar of Fiscal Incentive Support for Industry Which Conducting Research and Development In Indonesia, Ministry For Research and Technology of Indonesia, March 27, 2014 (in Indonesia language). ü Soenarso, Wisnu Sardjono, Development of Science and Techno Park (STP) in Indonesia, Proceeding of 10th Indonesian National Science Congress (2011), Indonesia Institute of Sciences, http//: situs.opi. lipi.go.id/kipnas/peserta. ü Soenarso, Wisnu Sardjono, Nugraha, Dadan, Listyaningrum, Eryda (2013), Development of Science and Technology Park (STP) in Indonesia to Support Innovation- Based Regional Economy: Concept and Early Stage Development, World Technopolis Review, v2, no 1, page 32-42, June 2013. ü Soenarso, Wisnu Sardjono (2013), Science, Technology and Innovation Investment for Strengthening STP Role to Support Indonesia Competitiveness, International Conference at The Management and Economic Research Institute, Chungnam National University of Korea, September 2013. ü United Nations Educational, Scientific, and Culture Organization (UNESCO), Science Technology and Innovation, http:// www.data.uis.unesco.org. ü United Nations Industrial Development Organization (UNIDO); Competitive Industrial Performance Report 2012/2013, http://www.unido.org ü World Economic Forum, Global Competitiveness Report 2013 2014, http:// www.weforum.org. ü Zakiyudin (2014), The Policy and Strategy of The Ministry of Industry to Enhancing Research and Development Activity Relocation to Indonesia, Seminar of Incentive Fiscal Support for Industry Which Conducting Research and Development In Indonesia, Ministry For Research and Technology of Indonesia, March 27, 2014 (in Indonesia language). ü, Enhancing of Science and Technology Investment, Academic Paper, Asdep Investasi Iptek, Kementerian Riset dan Teknologi, Jakarta, 2013 (in Indonesia language). ü, 2014 Global R&D Funding Forecast, Battelle R&D Magazine, December 2013. ü, The Master Plan for the Acceleration and Expansion of Economic Development of Indonesia (MP3EI) 2011 2025, Ministry Coordination for Economic Affairs, Jakarta, 2011. ü, The National Industry Structure is Weak, Kompas, Indonesia Newspaper, August 21, 2013 (in Indonesia language). ü, The Science and Technology Indicator of the East Java Province 2010, Balitbangda Jatim and BPS, (in Indonesia language). TECH MONITOR Apr-Jun 2014 31