1.2.4 [related to the Economics in Practice on p. 658] In a March 2013 press release, the World Bank announced its support to assist Indonesia in accelerating its economic growth through the Research and Innovation in Science and Technology Project (RISET). This project is designed to boost research and innovation in Indonesia and assist the country in evolving into a knowledge-based economy. According to Stefan G. Koeberle, World Bank Country Director for Indonesia, “Improving human resources and national capabilities in science and technology is a key pillar in Indonesia’s masterplan to accelerate and expand its economy. Shifting from a resource-based economy to a knowledge-based economy will bring Indonesia up the value chain in a wide range of sectors, with the help of homegrown innovation and a vast pool of human resources.” The press release states that a large part of the RISET program will involve assistance in raising the academic credentials of Indonesian researchers involved with science and engineering, and it is hoped that the program will eventually lead to increased investment in R&D, where as a percentage of GDP, Indonesia’s R&D investment falls significantly below many of its Asian neighbors. Using the information presented in this chapter, explain how increasing research and innovation and raising the academic credentials of researchers can assist in increasing long-run economic growth in Indonesia.

Source: “World Bank Supports Move to Accelerate Indonesia’s Economic Growth through Science, Technology, and Innovation,” www.worldbank.org, March 29, 2013. Used by permission.