One-Day Conference on A Quest for Development Paradigms in Indonesia: Micro and Managerial Perspectives
6 March 2008, 09.00 -15.30
Seminar Room I, ISEAS

The fever of the 2009 direct Presidential election is rising in Indonesia. Preparations for the campaign and the search for candidates have been intensifying. Many surveys have been carried out to find the most popular candidates. Experience from the first direct Presidential elections, and many regional elections throughout the country, has shown that popularity became the most decisive factor in electoral victory. Not surprisingly, celebrities have better chances of winning in the elections regardless of their development paradigms. Unfortunately, little work has been done on the development paradigms themselves. Democracy means educating citizens to see beyond popularity and getting them to discuss development paradigms.

What kind of development does Indonesia need? Was the economic growth rate of 6.32 per cent in 2007 too low or too high? What is the basis of evaluation? These are not easy questions. They are not even mentioned in any textbook on development studies since the texts are usually decades behind current reality. Indonesia now is very different from Indonesia 40 years ago and even 10 years ago. It is encouraging that Indonesian scholars have begun to share views on what development paradigms Indonesia should adopt. This effort is commensurate with one of the studies ISEAS is currently doing: on the quest for suitable development paradigms for Indonesia. The results of the study will be disseminated to a wide Indonesian audience so that it can influence campaigns for the election of the President and the Vice-President. A better Indonesia resulting from more suitable development paradigms will also mean a better ASEAN and the world. Hopefully, any candidate for President/Vice-President will benefit from the ISEAS effort.

As a beginning, ISEAS is collaborating with scholars from the Faculty of Economics at the University of Indonesia. ISEAS will conduct a one-day conference on “A Quest for Development Paradigm for Indonesia: Micro and Managerial Perspectives.” The emphasis of this conference is on perspectives from microeconomics, management and business, approaches that are frequently neglected in public debates on Indonesian economic development. On the other hand, Indonesia needs excellent entrepreneurs, innovators, managers, and leaders. Therefore, one of the emerging paradigms is the need for Indonesian policy-makers to strengthen micro and managerial perspectives of economic development.

Three Indonesian scholars and three Indonesian top-level business leaders will be the speakers at the conference. The scholars are lecturers at the Faculty of Economics, University of Indonesia, with management as their expertise. The business leaders are currently working for their doctorate degrees at the Faculty of Economics, University of Indonesia. In addition to the speakers and moderators, the conference also expects active discussions by participants.

You are cordially invited to attend the conference. It is free and on a first-come, first-served basis. Seats are limited. Please register to Karthi at If you happen not to be able to attend the conference after registering, we will appreciate very much if you could inform us.

The programme of the conference is as follows:


09.00-09.15: Welcoming Address

09.15-09.30: Objective and Plan of the Conference
Dr. Aris Ananta, Coordinator of the Conference

Banking Industrial Structure
Chairperson: Dr. Denis Hew, Senior Fellow, Institute of Southeast Asian Studies, Singapore

09.30 – 10.00 Dynamics of Banking Industrial Structure and Implications for Industrial Stability
Dr. Bambang Hermanto, Head of the Department of Management, Faculty of Economics, University of Indonesia

Bambang Hermanto uses an industrial organization approach to analyze the structure, dynamics, and performance of the banking industry against industrial stability and strategic risk. Hermanto uses banking financial reports of the Central Bank (Bank Indonesia), including data from all commercial banks in Indonesia for the periods September 2000 (156 banks) until May 2006 (131 banks). His finding demonstrates that the Indonesian banking industry is still in a stable condition, as normal competition has not yet occurred. In terms of asset measurement and performance, however, tight competition is found to be discrete within the inter sub-industry. The tight competition exists in the medium sub-banks. The research also shows that the declining number of banks within the industry has been followed by lower concentration indices as well as a decreasing market share of the 15 large banks.

State Owned Enterprises and Public Service Institutions

Chairperson: Dr. Denis Hew, Senior Fellow, Institute of Southeast Asian Studies, Singapore

10.00-10.30 Ownership Reforms: Do They Matter? A Study of the Privatization of Indonesia’s State Owned Enterprises
Dr. Viverita, Lecturer at the Faculty of Economics, University of Indonesia

State-owned enterprises (BUMNs) have received much attention in Indonesian economic development because they are expected to contribute to the nation’s economy, though they are also subsidized by the government. Not surprisingly, the BUMNs must secure good economic outcomes as well as high financial and productivity performance. Otherwise, they will not be sustainable. To achieve these goals, the Indonesian government launched a privatization policy by selling parts of the government ownership in some of the BUMNs through public offerings and private placements. However, Viverita Yosman has found evidence that, so far, there have been no significant changes in the BUMNs’ performance in the privatized firms. Yosman also examines whether the government policy to privatize some of the state firms (BUMNs) was appropriate.

10.30-11.00 Break

Chairperson: Dr. Lee Poh Onn, Fellow, Institute of Southeast Asian Studies, Singapore

11.00-11.30 The Role of Knowledge Management in the Public Service: A Case Study in PT PLN (Persero)-State Electricity Company, Indonesia
Mr. Manerep Pasaribu, Director of PLN (State Electricity Company), Province of East Nusa Tenggara; Ph.D candidate in Management, Faculty of Economics, University of Indonesia.

Since the beginning of the 1990s, the public organization has been facing stronger demands to perform better. Yet, progress has not been as expected. At the same time, best practices have been expected to be the base to create effective public services. Manerep Pasaribu focuses his presentation on the distribution, replication, and re-use of best practices in organization units of PT PLN (Ltd.), the Indonesian State Electricity Company. Pasaribu utilizes a knowledge-management approach to identify factors affecting the effectiveness of best practices application to all levels of the organization. He addresses several types of influence on an organization’s performance: knowledge type, collaboration, adaptation, strategic leadership, transfer implementation, knowledge-sharing, and practices transfer.

Innovation and Development
Chairperson: Dr. Lee Poh Onn, Fellow, Institute of Southeast Asian Studies, Singapore

11.30-12.00 An Evaluation of Indonesia’s National Innovation Systems: A Case Study of the Telecommunication Industrial Cluster
Mr. Didit Herawan, Country Director/General Manager of Motorola Home & Networks Mobility. PhD candidate in Management, Faculty of Economics, University of Indonesia.

Innovation has turned out to be an increasingly significant factor in the competitiveness of firms, the prosperity of nations and economic growth. In the past two decades, the use of National Innovation Systems (NIS) approach to analyze the development and sustainability of an industry has been receiving more attention. The implementation of this approach depends on the specific situation of the country, region, city or industry. At a higher level, Didit Herawan evaluates different stages of NIS development in Indonesia, where the notion of NIS has been discussed in various forms since the beginning of 1998. Herawan uses the traditional framework of NIS as a point of reference to guide the corporation. His observations show NIS has not been implemented well. The study leads to an improvement of the current NIS model and calls for research to develop a more robust model.

12.00-13.0 Lunch

Chairperson: Yohanes Eko Riyanto, Assistant Professor, Department of Economics, National University of Singapore, Singapore

13.00-13.30 The Role of Intuition in Accelerated Product Development in Food Industry in Indonesia
Ms. Pepey Riawati Kurnia, a former Product/ Project Manager at Primafood International Ltd., Charooen Popkphand Group of Companies. PhD candidate in Management, Faculty of Economics, University of Indonesia.

In the midst of tightening competition, managers must make risky, quick and accurate decisions. To do this, they often rely on their intuition, built from their cumulative experiences in the market. A manager said that 70 per cent of his decisions were based on intuition and a willingness to take risk. The best decisions are based on both analysis and intuition. Pepey Riawati Kurnia discusses this issue, using the Indonesian food industry as her case study. The industry has been growing annually at about 6 per cent for all kinds of food, with strong demand from both domestic and international markets. It is no wonder that many businesses have entered the market. She analyzes how intuition contributes to decision-making in this promising business in Indonesia.

Chairperson: Yohanes Eko Riyanto, Assistant Professor, Department of Economics, National University of Singapore

13.30-14.00 The Linkages between Innovation and Economic Development: Initiatives to Empower Society’s Entrepreneurship and to Build National Competitive Advantages
Dr. Avanti Fontana, Lecturer at the Faculty of Economics, University of Indonesia

Avanti Fontana highlights the link or relationship between innovation and economic development. Innovation is seen as the generator for Indonesian development and growth. Fontana discusses the importance of innovation at the societal level, the organizational level, and the individual level. She also examines the urgency and importance of implementing innovation at the societal level via creative entrepreneurship, micro-financing, conducive regulations for entrepreneurship, and the revival and the increasing number of micro, small, and medium enterprises as the engine for Indonesian economic development and growth. She places the discussion in the context of Indonesian firms and people living in Indonesia. She also investigates the role of innovation (at various levels of units of analysis) for Indonesian economic development and growth. Finally, she emphasizes the micro and managerial paradigms in policy-making in Indonesia.

14.00 – 14.30 What are the Paradigms?
Dr. Aris Ananta, Coordinator of the Conference

Aris Ananta will discuss some interesting findings from the conference. He will also invite inputs from all participants on the follow-up to the conference and other agendas on the study of the quest for development paradigms in Indonesia.

14.30-14.45 Closing Address

(Blog content from Dr. Aris Ananta – AF260208)