Slide1: Presented by Budi Rahardjo PPAU MIKROELEKTRONIKA ITB Presented @ BITE 2000


BACKGROUND: BACKGROUND Indonesia’s economy is not in a good shape We must find ways to strengthen Indonesia’s economy New economy provides opportunity we cannot miss Opportunities in the Global New Economy Various statistics have shown growth in Information Technology (IT) and Electronics Indonesia is not far behind in this field


ECONOMICAL BACKGROUND: ECONOMICAL BACKGROUND Export is a viable means to support Indonesia’s economy Indonesian export: Oil & Gas (2020 & 2040 will be gone) Wood (destroying our jungle) Textile (competition from China) Electronics (including IT)


ELECTRONICS: ELECTRONICS Defintion of “Electronics” according to DEPRINDAG includes Information Technology Modules and components Semiconductor Consumer Electronics Telecommunications Home Appliances Misc.


INDONESIA ELECTRONICS EXPORT: INDONESIA ELECTRONICS EXPORT 3.9 6 13 30 1996 1997 1988 1999 2000 2003 2006 2010 In billion US$ source: Dept of Commerce, Indonesia Target 24% p.a. target US$ 30 billion Rescue Recovery Growth


DEPRINDAG: DEPRINDAG 1996 Electronic Super Sites (ESS) Super Highway / 3 Jalur Kemudahan (Koridor Cilegon-Jakarta-Cikampek-Purwakarta-Padalarang-Bandung) Incentive, Taxtion, Training Domestic market – distribution Bandung High Tech Valley (BHTV) Technology Transfer Agency Software dan Engineering Support Development 1997 Crisis!


Slide7: Jakarta Cikampek Purwakarta Padalarang Bogor Bandung Cilegon Cikande Rangkasbitung Pamanukan Koridor JKT-CKP Koridor JKT-CLG Rencana Koridor CIPULARANG R&D Centers Central Government Electricity & Hydro Serpong BHTV Source: DEPARTEMEN PERINDUSTRIAN DAN PERDAGANGAN


WHY BANDUNG: WHY BANDUNG Bandung’s “goldmine” Science & Technology Top universities, research centers, tech-related corporations (crown corp./BUMN & private) Talented and intelligent human resources Top students study in Bandung. Universities in Bandung are attended by top Indonesian students Nice place to work and live (ecosystem)


Bandung SciTech community: Bandung SciTech community ITB Universities: UNPAD Parahiyangan IKIP, UNISBA Etc. Research Centers: PPAU RISTI LIPI MIDC B4T Etc. LEN INTI CMI TELNIC IPTN: aircraft industry PINDAD TELKOM BHTV Technology Infrastructure Software Hardware Houses source: Direktorat Industri Elektronika, Dirjen ILMEA, Deprindag PJKA POS


ECONOMIC VALUE: ECONOMIC VALUE High tech creates economic value If there are 500,000 hi-tech workers in Bandung and their salary is Rp1,000,000/month (paid by private companies, not by government), calculate the amount of money flowing Money will be spent in Bandung’s area Generate new economy Note: High-tech worker’s salary is more than Rp 1,000,000 Companies provide work


LESSONS FROM OTHER COUNTRIES: LESSONS FROM OTHER COUNTRIES Silicon Valley, USA (July 2000) The definite model 50 mil long 3.2 million people More than 7000 IT companies 11 companies started every week 1 company goes public every 5 days 20% of top IT companies in the world Market capitalization: US$ 450 billions 62 new millionaires/day


LESSONS FROM OTHER COUNTRIES: LESSONS FROM OTHER COUNTRIES India The success of India in software industry proves that everybody can participate in the new economy In less than (5) years, India’s software export multiplied and became US$ 4 billion in 2000. Estimated US$50 billion in year 2008 NOT DOMESTIC MARKET! Political situation in India is not stable (Kashmir, change in government, etc.), yet business progresses English (language) is not a barrier Government commitment


LESSONS FROM OTHER COUNTRIES: LESSONS FROM OTHER COUNTRIES China Progressing very rapidly! Techno parks are being created everywhere (near Beijing) Internet users grow exponentially Yet not a rich country Piracy is high, but Microsoft (and other high tech industries) open research centers in China! English is still a barrier Government commitment


LESSONS FROM OTHER COUNTRIES: LESSONS FROM OTHER COUNTRIES Malaysia Multimedia Super Coridor (MSC), Cyberjaya, Putrajaya Provides incentives for high tech companies! Still struggling (but moving forward) Government commitment, Top down approach


CHALLENGES: CHALLENGES Human Resources Crisis! The demand is greater than the supply India can generate 70,000 IT new professional/year. How about Indonesia? Various initiatives have been started in Indonesia “Sekolah 2000” [school 2000 program] SMK-TI [Sekolah Menengah Kejuruan bidang Teknologi Informasi] IT training centers, certification, non-degree & competency learning centers private initiatives (Bali Camp, Cybercity)


CHALLENGES: CHALLENGES Indonesian Human Resources Quality Lack/poor of English capability Not known as high-tech workers Not efficient (slow workers) Low on working ethics


CHALLENGES: CHALLENGES Government policy Unclear Too many hidden agendas from many groups Lack of incentives to private sectors Infrastructure Poor to lack telecommunication infrastructure (difficult to get telephone lines) Monopoly & duopoly problems Small PC penetration (400,000 market share) But big in wireless (4 million cellphones)


CHALLENGES: CHALLENGES Bandung’s problem No international airport Telecommunication infrastructure problem (problem between PT Telkom and Aria West) Poor (lack of) city development Lack of luxury homes (eg with swimming pool)