Unleashing Domestic Firms' Potential to Innovate

The case of ICT in Indonesia

Conference paper (2023)

Authors

M.S. van Geenhuizen Economics of Technology and Innovation - TPM
L.M. Syamsuri Economics of Technology and Innovation - TPM
Z. Roosenboom-Kwee Economics of Technology and Innovation - TPM
Research Group
Economics of Technology and Innovation (TPM) (TU Delft)
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Published Date

2023

Language

English

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Faculty

Technology, Policy and Management

Department

Values Technology and Innovation

Research Group

Economics of Technology and Innovation

Abstract

Indonesia is facing strong challenges of enhancing the innovation level of the ICT sector. There is a quickly growing domestic demand for ICT products and services in this country, however, domestic firms are not able to fully respond to this demand. This situation calls for more understanding of innovation practice in ICT firms in Indonesia, and accordingly the first part of the paper provides an analysis of firms’ internal (specifically management) and firms’ external conditions, using a survey of more than 200 ICT firms, mainly SMEs. Management factors, like ICT skills, manager’s experience, cognitive capability, and market-related skills, are positively related to innovativeness. Regarding external conditions, collaborative networks in clusters and foreign direct investment also witness a positive association with innovativeness. In the second part, key quantitative findings are enriched with expert opinion revealing a main challenge, namely, to improve quality of the ICT education system with emphasis on modern management (of entrepreneurial risk-taking).

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