Sectoral Innovation Systems Hinder Indonesian Electric Vehicle Growth

Why It Matters

Understanding these systemic disconnects is crucial for policymakers and industry leaders aiming to foster technological advancement and market adoption. Addressing these challenges can unlock opportunities for sustainable transportation solutions and economic growth.

Key Finding

The research identified eight key challenges hindering Indonesia's EV industry, spanning institutional issues like ineffective fiscal incentives and local content struggles, knowledge and technology gaps in R&D quality, and demand-side problems such as low consumer response and insufficient charging infrastructure.

Key Findings

• Fiscal programs are ineffective in promoting collaboration between industry, universities, and R&D institutions for EV innovation.
• Local content targets are difficult to achieve due to the unreadiness of local industries for the EV supply chain.
• Domestic R&D quality and standards for EVs are inadequate for commercial scale.
• Investor interest in local EV development is insufficient.
• Lack of accessible charging infrastructure (ECS) is a barrier to the domestic EV market.

Research Evidence

Aim: To map the challenges in connecting the elements of the Sectoral System of Innovation (SSI) for the development of the electric vehicle industry in Indonesia.

Method: Desk research using secondary sources.

Procedure: The study analyzed existing statistical data, official documents, and scientific references to identify and categorize challenges within Indonesia's EV innovation ecosystem.

Context: Electric vehicle industry development in Indonesia.

Design Principle

Ecosystemic Design: Design solutions must account for the interconnectedness of technological, institutional, and market factors.

How to Apply

Before launching a new product or technology, conduct a thorough analysis of the relevant innovation system to identify potential barriers and opportunities for collaboration.

Limitations

The study relies solely on secondary data, which may not capture all nuances or real-time developments.

Student Guide (IB Design Technology)

Simple Explanation: It's hard to build electric cars in Indonesia because the government's money incentives aren't working well to get companies and universities to work together, local parts aren't ready, the technology isn't good enough yet for mass production, investors aren't interested, and there aren't enough charging stations.

Why This Matters: This research shows that even if you have a great product idea, it might fail if the surrounding system isn't set up to support it. This is important for any design project that relies on external factors.

Critical Thinking: To what extent can a single company or design team overcome these systemic challenges, or is significant government intervention and industry-wide collaboration essential for success?

IA-Ready Paragraph: This research highlights the critical importance of a well-integrated Sectoral System of Innovation for the successful development of new industries, such as electric vehicles. The findings indicate that challenges in fiscal policy effectiveness, local industry readiness, R&D quality, investor interest, and infrastructure accessibility significantly impede progress. Therefore, any design project aiming for market introduction in a complex sector must consider and address these broader systemic factors.

Project Tips

• When researching a new product idea, think about who else needs to be involved (government, other companies, research institutions) and if they are ready to participate.
• Consider if the infrastructure needed for your product to work (like charging stations for EVs) is already in place or needs to be developed.

How to Use in IA

• Use this research to justify why certain external factors (like policy or infrastructure) need to be considered in your design process, especially if your project aims for wider adoption.

Examiner Tips

• Demonstrate an understanding of how external factors and systemic issues can impact the feasibility and success of a design solution, rather than focusing solely on the product itself.

Independent Variable: ["Effectiveness of fiscal programs","Local industry readiness","Quality and standards of domestic R&D","Investor interest","Accessibility of charging infrastructure"]

Dependent Variable: ["Development of the electric vehicle industry"]

Controlled Variables: ["Country context (Indonesia)","Sectoral System of Innovation framework"]

Strengths

• Provides a comprehensive overview of systemic challenges.
• Uses a recognized framework (SSI) for analysis.

Critical Questions

• How can the identified institutional challenges be practically addressed through policy changes or new collaborative models?
• What specific R&D improvements are needed to meet commercial scale standards for EVs in Indonesia?

Extended Essay Application

• Investigate the Sectoral System of Innovation for a specific emerging technology in your region and identify key challenges and opportunities for intervention through design.

Source

Challenges in Connecting The Elements of Sectoral System of Innovation for Developing Electric Vehicle Industry in Indonesia · STI Policy and Management Journal · 2023 · 10.14203/stipm.2023.383