From The Jakarta Post

'Indonesia must find its own strengths in ICT field'

Zatni Arbi, Contributor, Jakarta

When President Susilo Bambang Yudhoyono attended the APEC Summit Meeting in Chile in late 2004, Craig Mundie, currently Microsoft's chief research and strategy officer, happened to be the person to whom it fell to introduce the President to the forum.

Since then, the two of them have bumped into each other a couple of times, including during President Yudhoyono's visit to Redmond in the U.S. state of Washington in May 2005, and at the subsequent APEC leadership meeting in Busan, South Korea, in November 2005.

Last week, Mundie, who works closely with Bill Gates and is responsible for working with policymakers around the world, came to Jakarta to meet with Yudhoyono while on his way to the APEC Meeting in Hanoi.

Along with three other media publications, The Jakarta Post was given an opportunity to talk with Mundie the evening before he was scheduled to meet the President.

During the discussion, some standard questions were raised, such as whether intellectual property rights (IPR) were one of the issues he would talk to the President about.

It should have been a hot issue, as Indonesia is still ranked third in software piracy after Vietnam and Zimbabwe, according to 2005 data. Mundie was noncommittal, however.

"We are here to discuss what Microsoft can do to help Indonesia grow its ICT industry, especially the local software development sector," he said.

But of course, he explained, IPR protection and law enforcement provided the foundation for an environment in which the software industry could flourish.

In addition, there was no limit to best practices from around the world that Indonesia could study and adopt. Mundie provided the example of how China had helped stimulate its local software industry.

In China, he said, the government budget for buying new computers for the last few years had been broken down into hardware and software allocations. This gave assurances to local software developers that the fruits of their labor would be recognized as having market value, thus encouraging them to produce more. It made sense as software development could never survive as a labor of love alone.

Protection of IPR remains Indonesia's Achilles heel. Even today, a lot of pirated software is still used in government offices. This has serious consequences for law enforcement.

The running joke at the moment is that IPR raids are carried out here by law enforcement agencies that themselves use illegal software in their offices.

Mundie stressed that he was "more interested in future issues that technologies could represent as opportunities and challenges."

It was easy to tell developing countries to look at India and China, and then try to replicate their success stories, but perhaps Indonesia should take a more cautious approach. Indonesia differed in a lot of respects from India and China.

India had experienced rapid growth in its information and communications technology (ICT) industry due to the influence of the Indian diaspora, the members of which had accumulated tremendous financial wealth and entrepreneurial experience in Silicon Valley, and then decided to return home and work on building an Indian IT industry.

Meanwhile, China had been growing thanks to massive amounts of foreign direct investment.

Indonesia, on the other hand, did not have large numbers of successful overseas-based entrepreneurs who could return to build up the country's economy. Nor had it succeeded in attracting large inflows of foreign direct investment.

Mundie said that Indonesia had to find its own strengths and identify the niche segments in which it could set itself apart.

Having worked with the Russian government quite extensively, Mundie mentioned how the need to find special strategies had been recognized there.

The Russians were very good in fields such as advanced mathematics, state-owned enterprises, aerospace, nuclear and other sophisticated engineering. They could differentiate themselves from the Indians and Chinese by focusing more on these selective fields as they harnessed their engineering talents and put them to use in software development houses.

"Unfortunately, this is my first visit here, and I still have a lot to learn about Indonesia before recommending what selected fields Indonesia should focus on".

He warned, however, that competing on the basis of low cost alone would be a bad strategy.

When asked whether a top-down approach was a prerequisite for a country's ICT development, Mundie said that in some countries, like India, for example, the driving force was not the government. In other countries, especially Malaysia, it was clear that visionary leaders had taken the driver's seat.

In Indonesia, we have had a series of government initiatives and programs, but the fact remains that we are still far behind in our ICT development. So, which is the better approach?

In responding, Mundie once again gave the example of India. In that country, the government helped the IT industry grow by not standing in its way. Large companies, such as Infosys and Wipro, were allowed to set up their own internal universities. These were privately run and funded.

They invited world-class teaching staff to educate local people, who would then find work with the companies. The government leadership could help by serving as a catalyst for the industry's growth.

President Yudhoyono recently inaugurated the National ICT Council, which involves a number of ministries. It is a move we all should support. Mundie has reportedly been asked to advise the council.

While Indonesia certainly has a lot of capable and competent people who can contribute to the advancement of its ICT ecosystem, there is still so much global experience that we can tap into from outsiders like Craig Mundie.
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