Konsinyasi TKBJ Kemendag R&D and Computer-Related Services Riza Noer ARFANI PSPD UGM 15 Des 2020

Konsinyasi Tim Koordinasi Bidang Jasa (TKBJ) Kementerian Perdagangan 15 Desember 2020

RESEARCH & DEVELOPMENT (R&D), COMPUTER AND RELATED SERVICES: CASE ON INDONESIA Riza Noer Arfani Chair/Direktur WTO Chairs Programme Center for World Trade Studies Pusat Studi Perdagangan Dunia

Latar – Presentation Outline ■ Services Sector in Indonesia – Key Features in Areas relating to R&D, Computer and Related Services – Status of Services in the Economy: Locating Indonesia – Identifying Key Services Sectors: Moving Beyond Manufacturing/Industrial and Raw Materials/Agricultural Sectors – Key Policy Issues in Services Sectors and TKBJ (Tim Koordinasi Bidang Jasa) as a Platform ■ R&D, Computer and Related Services – WTO GATS (World Trade Organization General Agreement on Trade in Services) Classification – FDI Trends and Patterns in Services Sector in Indonesia: How to Respond?

– Smiley Curve of Value Chains: R&D and Digital Linkages, Clusterings ■ Agenda to Track – a Food for Thought – Research Agenda Proposals – On Circularity of Services Sector – Focused Linkages of Services to R&D and Digital Clusterings

Status of Services in the Economy: Locating Indonesia

Shares of Indonesia Services Sectors to GDP in the Past 10 Years (2009-2019) (Statista, 2020)

In 2019, the share of agriculture in Indonesia's gross domestic product was around 12.72 percent, industry contributed approximately 38.95 percent and the services sector contributed about 44.23 percent. (Statista, 2020) Actual development of Indonesia services sector (since Jan 2018, up to the current Covid-19 pandemic situation

Identifying Key Services Sectors: Moving beyond Manufacturing/Industrial and Raw Materials and Agricultural Sectors [towards R&D, Computer and Related Services? Information and Communication Technology/ICT? Industry 4.0? Digital Economy? ] Possible/prospective areas of services sectors crosscutting and intermingling R&D, computer and related services, ICT, Industry 4.0 and digital economy: 1. Financial Sector, Fiscal & Monetary Instruments 2. Creative economy and industry 3. Internet of Things (IoT), Cloud Computing, Big Data Analytics, and other Digitalizing Works, etc.

4. Public Works and Utilities (Procurement in Construction, Roads, City/Urban Planning, Sewage and Waste Management etc.) and Basic Services (Health, Education and Water/Sanitary) 5. Precision Manufacturing and Upskilling, Upgrading Specialized Workers/Talents **Circular Economy** as a basic conceptual, practical and policy framework

Indonesia Key Policy Issues in Services Sectors

Sectoral Governance

Prioritizing Sectors: Digital and R&D Linkages Agreed Roadmap(s) Inter-sectoral Policy Frameworks

Industrial Transformation

TKBJ as a Platform

TRANSITION towards Intersectoral Digitizing and R&Doriented Areas/Clusters

Policy Hub and Clearing House

TKBJ as a Platform Foreign Policy

Strands of Economic Diplomacy (ED) as Conceptual/Policy Framework

• Beyond Strategic Objectives

[see next slide]

TKBJ Economy at Home • Inter-sectoral Services Industrial Governance

Economic Diplomacy • Commodity Diplomacy

Strands of ED (Western Countries) [Maaike Okano-Heijmans, 2011]

R&D, Computer and Related Services: WTO GATS Classification

Research and Development Services

Computer and Related Services

R&D services on natural sciences

Consultancy services related to the installation of computer hardware

R&D services on social sciences and humanities

Software implementation services

Interdisciplinary R&D services

Data processing services

Data base services

Other

Overall FDI Trends in Indonesia (CI-TPSA, 2017)

FDI in Indonesia Services (1): Values 2011-2016 (CI-TPSA, 2017)

FDI in Indonesia Services (2): Breakdown across Sectors 2011-2016 (CI-TPSA, 2017)

FDI in Indonesia Services (3): Greenfield Breakdown across Sectors 2011-2015 (CI-TPSA, 2017)

FDI in Indonesia Services (4): Sub-sectors Breakdown 2011-2015 (CI-TPSA, 2017)

FDI in Indonesia Services (4): Professional, Scientific and Technical Subsectors Breakdown 2016 (CI-TPSA, 2017): Towards Digital and R&D Linkages?

Smiley Curve of Value Chains

Linkages of Indonesia R&D and Digital Clusters

R&D and Digital Linkages: Roles of TKBJ, Ministries of Trade, Foreign Affairs, and Other Related Key Clusterings: Commodity, Industrial and Services-based Integrated Policy Schemes & Roadmaps Linkages & Clustering s

Research and Practical/Policy Agenda Proposals Digital Economy

R&D, Computer and Related Services

FOREIGN POLICY AND DIPLOMACY CONTEXT: ADOPTION OF ECONOMIC DIPLOMACY COMMODITY DIPLOMACY

Services Sectoral GVCs/GPNs Mapping

TRADE NEGOTIATION STRATEGY: WTO GATS & OTHERS

LINKAGES, CLUSTERINGS

Indonesian Services Sector: Putting “Circular Economy” as the Key

ECONOMY AT HOME: TRADE, SERVICES AND INDUSTRIAL GOVERNANCE *Vertical Integrated Policy Scheme by Sector/Commodity* *Agreed Services Sectoral Roadmaps*