HONDA-KADIN

International Symposium“Innovation by Industrial-Academic Collaboration”

本田財団・インドネシア商工会議所（KADIN）共催

国際シンポジウム2012「産学連携によるイノベーション」

A Report of
Honda Foundation ― IndonesianChamber of Commerce and Industry(KADIN) International Symposium 2012

For Publication
The present report is an account of the remarks, speeches, lectures and discussions fromthe international symposium on ecotechnology entitled “Innovation by Industrial-Academic
Collaboration” held in Jakarta, Indonesia on June 12th 2012. The symposium was jointly
organized by Honda Foundation and Indonesian Chamber of Commerce and Industry (KADIN).
The KADIN, who focuses on matters relating to trade, industry and services, is tapping
potentials and synergies of the national economy, offering a strategic forum for Indonesian
entrepreneurs. This was the first international symposium organized by Honda Foundation
since the one held in Bangkok in March 2008.
The business people, policymakers, politicians, researchers and scholars from both
Japan and Indonesia invited to this meeting, were enliven by the lively presentations andexchanges of opinion. The ecotechnology concept for Indonesia was revisited in discussions
and case studies such as “Innovation Systems and Policies,” “Renewable Energies” and “Public
Transportation Systems.” We would like to thank all the participants for their cooperation,
without which it would not have been possible to exchange such fruitful discussions
throughout the meeting.
It is our great hope that the discussions and friendships cultivated through this meeting
will be effective in the mutual edification of Japan and Indonesia, and accelerating theinternational understanding of ecotechnology and development of society in harmony with
the natural environment.

Satoshi Matsuzawa
Managing Director, Honda Foundation

HONDA-KADIN International Symposium
Innovation by Industrial-Academic Collaboration
Ritz-Carlton Mega Kuningan Jakarta, June 12th, 2012

Contents
Opening Remarks
Suryo Bambang Sulisto

Chairman, KADIN Indonesia (Indonesian Chamber of Commerce and Industry) ................................................................................ 6

Hiroto Ishida
President, Honda Foundation (HOF),
Former Administrative Vice-Minister (Science and Technology Agency),
Former Japanese Ambassador to the Czech Republic ................................................................................................................................... 8

Keynote Speeches
Zuhal Abdul Kadir
Chairman, the National Innovation Committee (Komite Inovasi Nasional, KIN)
– Innovation For Sustainable Economic Development ................................................................................................................................... 12

Hiroyuki Yoshino
Former President & CEO, Honda Motor Co., Ltd.,
Former Executive Member, the Council for Science and Technology Policy of the Cabinet Office– The Power of Dreams ............................................................................................................................................................................................. 18

Session 1: Innovation Systems and Policies (Presentation & Discussion)
Akira Goto
Former Fair Trade Commissioner of the Japanese Government,
Professor Emeritus, the University of Tokyo and HOF Director– National Innovation Systems and Innovation Policy ................................................................................................................................... 25

Tateo Arimoto
Director General, Research Institute of Science and Technology for Society (RISTEX),
Japan Science and Technology Agency (JST) and HOF Director– Innovation System and Policy – Administrative Viewpoints – ................................................................................................................... 28

Taizo Yakushiji
Former Executive Member, the Council for Science and Technology Policy of the Cabinet Office,Research Counselor and a Board Member, the Institute for International Policy Studies (IIPS) and HOF Director– Radical Innovation Policies .................................................................................................................................................................................. 31

Franz Gelbke
Senior Advisor to the Indonesian Ministry of Research and Technology (RISTEK)– Innovation Systems and Policies – Flashlights from Indonesia ................................................................................................................. 33

Jusman Syafii Djamal
President Commissioner, PT. Telkom,
Head of Group of Cluster of Innovation, National Innovation Committee– National Innovation Systems Towards Low Carbon Society ...................................................................................................................... 38

Gerald Hane

President and CEO, Battelle-Japan ..................................................................................................................................................................... 41

Session 2: Renewable Energies (Presentation)
Fumiaki IshidaPrincipal Research Associate, New Energy and Industrial Technology Development Organization (NEDO)– NEDO’s Renewable Energy Activities – A Sustainable Future Made Possible by Renewable Energy .................................... 50

Djangjang Sukarna
Secretary to the General Director, Renewable Energies and Energy Conservation,
Ministry of Energy and Mineral Resources, Republic of Indonesia– Indonesian Policies on New Renewable Energy ............................................................................................................. 55

Takashi Moriya
Senior Chief Engineer, Honda R&D Co., Ltd., Research Project Leader, Fuel Cell Vehicles– Honda’s Future Progress in Environmental Technologies ............................................................................................... 57

Writer: Rachmat Gobel
President Commissioner, PT Panasonic Gobel Indonesia, Chairman, Indonesia Renewable Energy Society, 2012 – 2015

Co-writer & Speaker: Riki F. Iblahim

Executive Director, Indonesian Renewable Energy Society(Masyarakat Energi Terbarukan Indonesia, METI)– Innovation by Industrial-Academic Collaboration.. ........................................................................................................ 62

Session 3: Public Transportation Systems (Presentation)
Fauzi Bowo
Governor, the City of Jakarta (DKI Jakarta)– Public Transportation System in Jakarta ...................................................................................................................... 66

Toshio Yokoyama
Senior Chief Engineer, Technology Development Division, Honda R&D Co., Ltd., Research Project Leader,
Next Generation Transportation Systems– Honda’s Views and Approaches on the Next Generation Personal Mobility ........................................................................ 71

Wrap-up Session
Ilham A. Habibie

Chairman, Standing Committee on Research and Technology, KADIN Indonesia ........................................................................... 78

Yoshinori Katori

Ambassador of Japan to Indonesia .................................................................................................................................................................... 81

Akira Kojima

Former Chairman, Japan Center for Economic Research and HOF Director ....................................................................................... 82

Closing Remarks
Kunio Nakajima

Vice President, Honda Foundation (HOF), Former President, Japan Chemical Innovation and Inspection Institute............... 86

Moderator: Atsushi Sunami
Associate Professor, National Graduate Institute for Policy Studies, Special Advisor to Cabinet Office(National Strategy, Science and Technology, and Space Policy) and HOF Director

Opening Remarks

HONDA-KADIN
International Symposium
Innovation by Industrial-Academic Collaboration

HONDA-KADIN International Symposium

Innovation by Industrial-Academic Collaboration

Opening Remarks

Suryo Bambang Sulisto
Chairman, KADIN Indonesia (Indonesian Chamber ofCommerce and Industry)Your Excellency, Ishida-san, President of Honda Foundation, Your
Excellencies, Bapak Wardiman Djojonegoro and Bapak Jusman Syafii
Djamal, Dear Yoshino-san, Former President & CEO of Honda MotorCo., Ltd., Dear Prof. Zuhal, Chairman of KIN, the National Innovation
Committee, Dear Japanese delegates and dear Indonesian guests,
A warm welcome to all of you this morning in Jakarta. It is a great
pleasure for me to open this symposium. We owe the initiative to
Honda Foundation which honors us with a large and distinguisheddelegation. Thank you very much for sharing your knowledge andexperiences with us today.
The symposium could not be coming timelier. Being oneof the engines of growth in Asia, Indonesia is further shaping
its economy to become one of the world’s largest economies
in the next 20 years. While our recent growth primarily is basedon selected sectors like mining, consumption and property
development, we all know that our economy has to rely onseveral pillars to develop more sustainably. With a young andincreasing population, it is a political and economic challenge
to create sufficient employment opportunities for your next
generation. Not at least, thanks to the long-term engagementof our Japanese friends, Indonesia hosts a large number ofworldclass manufacturing facilities. We would like to develop thisfurther, horizontally as well as vertically, which means adding
value domestically as well as broadening the range of productsthat Indonesians are manufacturing in their country. Why should
we continue importing electronic key components from our
Asian neighbors? Why aren’t we in the position to develop andmanufacture automotive components, drugs and IT solutions madein Indonesia?
I am confident that we will discuss some possible answers
during today’s symposium. Let me just make two points:
First of all, on public education, it may be just a symbol, but
it is quite striking: According to international consulting firms, there
are only less than a handful of Indonesian universities among theTop-100 Asian universities. Our flagship university, the Universitas

6Opening Remarks

Indonesia (UI) misses the top-50 ranked universities; dozens ofJapanese universities arrange the top positions more or less among
themselves. Sure, this is just a snapshot as it touches our education
elite only; I am afraid that in terms of basis education, the gap
between Indonesian educational institutions and that of our Asianpeers is much more dramatic.
My second point is on the value of education itself. Without
anticipating the contributions of today’s distinguished speakers, I
would like to describe it as a triangular institutional constellation.
The three parties involved are the private sector, education
institutions and last but not least the society itself. Without a strong
societal commitment to education, any state-driven or private
sector-driven approach will not be crowned with success. Education
is a precious good which requires financial means to be spent,which is a long-term investment into the future of our country:
expenditure on educational institutions is an investment that canhelp foster economic growth, enhance productivity, contributeto personal and social development and reduce social inequality.
Relative to GDP, expenditure on educational institutions indicatesthe priority a country gives to education.
With 3.25% of last year’s (2011) GDP spent on education,
Indonesia still is at the bottom of the list of OECD countries. Just
recently, we experienced a growth of public spending on educationin Indonesia, but it certainly needs time until it bears fruit.
While exact data is not available, international studies
estimate some 40% of the total public expenditures arecomplemented by private expenditures. According to the WorldBank (2010), 32% of the average Indonesian household income isabsorbed by expenditures for tertiary education. This is a positive
sign for the belief into the chances of our next generation, but it isalso a result of the widespread distrust in our education system.
Money and expenditures are indispensible, but not sufficientrequirements for paving the way to a knowledge-based economy.
At least, equally important is an intelligent design of an institutionallandscape that intertwines efforts of companies, the government
and the civil society.
I am looking forward to our discussions today. Thank you.

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Innovation by Industrial-Academic Collaboration

Opening Remarks

Hiroto Ishida
President, Honda Foundation (HOF),
Former Administrative Vice-Minister (Science and Technology Agency),
Former Japanese Ambassador to the Czech RepublicYour Excellencies, ladies and gentlemen, it is my great honor towelcome you to the international symposium jointly-organizedby Honda Foundation and KADIN Indonesia under the themeof “Innovation by industrial-academic collaboration.” Before
going further, I want to thank all the distinguished speakers andparticipants here for sharing this opportunity, especially Mr. Suryo B.
Sulisto, Dr. Zuhal, Dr. Fauzi Bowo and Dr. Wardiman Djojonegoro.
Honda Foundation, or shortened HOF, was established by thefather of Honda Motor, Mr. Soichiro Honda who is one of the most
famous entrepreneurs from Japan. Since its inception, HOF haspermeated with ecotechnology as a guidepost to pursue a morehumane civilization and hosted quite a few symposiums in different
countries as forums to freely exchange and inspire ideas among
intellectuals and experts from all over the world. HOF’s attempts
have provoked public interest everywhere as the importanceof ecotechnology increases in the world that much cares about
environmental friendliness.
In the 21st century, innovation through the promotion ofscience and technology is one of the key challenges for policy makers.
It is even said any country can remain viable only if it can successfully
exploit scientific and technological inventions and findings forinnovations that lead to the people’s better quality of life.
There used to be disputes among people who think theadvancement of science and technology would deprive many
people of their jobs, but rather it relieved them of drudgery. In
fact, new technologies create new jobs rather than they are merelycompatible. To sustain employment stability, the most reliablemeasure is to create more jobs to provide the products andservices people need and are willing to buy, and we need to strive
for this goal through innovations. I believe that one of the key
generators of innovation in any country is collaboration between
industry and academia.
Our ultimate goal is clear: it is to assure people of humane
life, both physically and mentally. Policy makers for this end should

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consider providing as good education and training as possible tosupport and encourage the people to become entrepreneurs, andin turn, expedite economic growth by innovations.
Likewise, to build a rich society in both material and spiritual
terms, the government must ensure a stable livelihood in which
they can enjoy a steady income and lead a healthy, secure life under
untroubled living conditions free from grievous disasters. This isexactly what the ecotechnology concept of HOF aims to achieve.
In the decades, Indonesia and Japan have strengthened theircooperation in various areas related to human security and welfare.
I truly hope this Jakarta symposium will be the first big
step toward enhancements in the national innovation system ofIndonesia and Japan. Thank you.

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HONDA-KADIN
International Symposium
Innovation by Industrial-Academic Collaboration

HONDA-KADIN International Symposium

Innovation by Industrial-Academic Collaboration

Innovation For Sustainable
Economic Development
Zuhal Abdul Kadir
Chairman, the National Innovation Committee (Komite Inovasi Nasional, KIN)

Indonesia is the planet’s largest archipelago, consists of morethan 13,000 islands that are beautifully strung like beads acrossthe equator forming the world’s only Maritime Continent. This
maritime continent is blessed with abundant natural resources –primary oil, timber and minerals, world’s most biological diversityof combined terrestrial and marine organisms. This richness is ourtreasure. It is our comparative advantage that is available to support
us thriving to prosperous Indonesia. But, we must manage this
precious treasure sustainably, or else it would disappear and we risk
endangering our future generations.
To date, Indonesian economy is still heavily depending
on exploiting its natural resources (comparative advantage) andmuch less on its competitive advantage. For example, we havehigh exports of raw materials, but with equally, if not higher,
imports of products made from those exported materials. To
achieve a sustainable economic development, we must develop
our competitive advantage such as our ability to transform raw
materials into high value-added finished products. Innovation isessential for the challenge to establish and maintain Indonesia’scompetitive advantage.
The late 2000s’ financial crisis has caused the emerging anddeveloping economies to replace advanced economies to lead
global economic growth. Inevitably, there is a shift of epicenterfrom the US and Europe to Asia. Many Asian countries such as
South Korea, Japan, Singapore, Taiwan, China and India have been
preparing themselves well in advance to enter an era of innovation
driven economy and to take charge at global stage.
Indonesia, the only ASEAN country selected as a memberof the G20, the Global Economic Steering Committee, has a great
potential to become the Big7 by the year of 2025. This is one of
the reasons that our president has boldly initiated the courseof strategic actions to prepare Indonesia to shift from a natural
resource-based economy to innovation based economy by 2025.
The World Economic Forum (WEF) determines thecompetitive index of a country based on 12 pillars: Infrastructures,
Macro economic environment, Health and primary education,
Higher education and training, Goods market efficiency, Labour
market efficiency, Financial market development, Technologicalreadiness, Market size, Business sophistication and Innovation.
Let’s take a look at the diagram and see where we are (See No. 2).

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Indonesia has been at the level of “factor-driven economy” – a medium
category for competitiveness – for a while. We are at this category
mainly because we have a relatively low income per capita as our
economy lean heavily on export of raw materials which have low
added-value (World Economic Forum, 2010). Currently, Indonesia hasentered the “efficiency-driven economy” (World Economic Forum, 201112). Compared to Malaysia, who is also at the level of efficiency-driven
economy, we are weaker in the following areas: Technological readiness(Malaysia 44, Indonesia 94); Higher education and training (Malaysia
38, Indonesia 69). However, for the Market size criterion, Indonesia has
a better index of 15 (Malaysia 29). Significantly lower index value of thiscategory is, of course, a strong attraction to other countries such as
China, South Korea, Japan, etc., to flood Indonesia with their products.
Fortunately, we could still keep our courage and hope highbecause in the criterion of Innovation factor, we are ranked 36. Thisrank shows that Indonesia actually has a capable human capital toinnovate. Our researchers, despite limitation in research facilities andthe supporting innovative ecosystem, have shown that they are able toproduce innovation and compete globally. We can elevate this rank if
we seriously put the efforts to improve our ecosystem of innovation.
Actually, Indonesia have had many supporting components
of innovation. However, they are not structured in a well organizedecosystem of innovation (See No. 3). Each component still belongs
to its own box of its own individual sector and is not stronglyinteracting with other components.
Several strategic sectors that require serious attention are:Education, Good work ethic and ethical systems, Socio-cultural
aspects, Synchronization of public policies and Research funding.
Compared with other Asian countries, Indonesian R&D budget
and S&T infrastructure are relatively low (See No. 4). Thus, efforts toincrease the R&D budget is a challenge of its own which must be
accompanied by the creative and innovative efforts in R&D itself.
This low R&D funding of Indonesia is reflected in thecompetitiveness indicator according to the World Economic Forumwhich shows low index of Technological readiness and Innovation.
Obviously, we need to increase this rank to catch up with other
Asian countries.
Indonesia has the lowest of both number of scientists andengineers. Both numbers are much lower than those of Malaysia.
Needless to say, science and technology innovation inIndonesia will develop only if its R&D funding is increased at least to
about 1% of GDP.
The goal is to create a system where all actors of the triple
helix (Academic, Business & Government) function as prime movers,
in a harmonious system, supporting each other that are different
but one (See No. 5).
I choose this slide depicting several gears that work together
in harmony as an analogy to the essential of togetherness in reachingcommon dream and goal: that is to increase global competitiveness.
The challenges are to provide IPR (Intellectual Property Right),
R&D management, research management system and intermediary

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Innovation by Industrial-Academic Collaboration

agency to transfer science and technology into innovation.
Government plays crucial role to provide legal umbrella tothe investors, both domestic and international, so the transfer oftechnology will occur through clusters in each region in which projects
are done. Similarly, the missing link between research institutes,
academia and industry to transfer knowledge and results from research
into a competitive marketable product requires an intermediaryagency. Indonesia is lacking of it, or if it exists, it is not well functioning.
Therefore, the National Innovation Council (KIN) recommends an
Innovation Initiative 1-747 to the President of the Republic of Indonesia(See No. 6). This initiative consists of four main interrelated segments:
1. INPUT: 1% of the GDP by 2014 to fund R&D activities. It is
recommended to gradually increase the total R&D budget up
to 1% of GDP by 2014. This substantial increase is obtained
through the partnership with state-owned companies and private
sectors, i.e.: through venture capital, angel capital, corporatesocial responsibility, state-owned companies and foreign direct
investment. The ultimate goal is to gradually increase R&D
funding from 1% to 3% by 2025.
2. PROCESS-1: Seven strategies to improve national innovation
ecosystem.
3. PROCESS-2: Four strategic industries are brought into focus to
be developed as vehicles to accelerate the national economic
growth, i.e.: a. Basic needs industries: b. Creative industries: c.
Regional based industries: and d. Strategic industries.
4. OUTPUT: Seven goals of Indonesia 2025 Vision.
This Innovation Initiative 1-747 is designed to create a conducive
environment for the implementation of Long term National
Development Plan (RPJPN) and the Master Plan for the Acceleration andExpansion of Indonesian Economic Development (MP3EI).
The goal of Indonesian vision of national development– Vision 2025 – is to become a self-supporting, advanced andprosperous society of Indonesia by 2025 (See No. 7). This vision will
be achieved through improvement on three strategic sectors:
1. To increase value added, to expand production processes,
distribution and asset management and to provide access topotential resources at different geographical regions through thecreation of synergistic activities among economic growth centers.
2. To strengthen national economic resistance by improving
production and marketing efficiency and integration of domestic
markets.
3. To boost national ability to compete globally and sustainably,
through the promotion of innovation in all sectors.
Vision 2025 targets a GDP of US$1.206 trillion in 2014 (amongthe 14 countries of global economic power), and will reach GDP
of US$3.750 – 4.470 trillion (among the 12 global economic power
countries) in 2025.
Vision 2025 is aimed to “support Indonesia to become anadvanced country by 2025 and become one of 12 global economic
power countries through inclusive and sustainable high economic
development.”

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Indonesian government is targeting to get a predicate ofa developed country by 2025. To reach this goal, it has launched
MP3EI as a complementary to its existing RPJP. KIN is determined
to ensure that innovation aspects are embedded in all theMP3EI programs to guarantee a continuous economic and social
development to the local community.
I believe that the establishment of innovation clusters bothat national and regional levels are crucial to succeed in reachinginnovation driven Indonesia. Six corridors have been determined in
MP3EI: Sumatera, Java, Bali – Nusa Tenggara, Kalimantan, Sulawesi
and Maluku-Papua (See No. 8).
Sumatera corridor: “Center for Production and Processing of Natural
Resources and National Energy Barn”;
Java corridor: “The Driving Force for the National Industry and Services”;
Bali-NTT: “Gateway for National Tourism and the Support to National
Food Production”;
Kalimantan corridor: “Center for Sustainable Mining Exploration and
Production and the National Energy Barn”;
Sulawesi corridor: “Center for the Processing and Production ofAgricultural Products (including fisheries andplantation), Oil & Gas and Mining”;
Papua-Maluku corridor: “Center for Development of Food, Fisheries,
Energy and National Mining.”
This is an example of a National Innovation Cluster, consistingof the three elements of the triple-helix: Government, Business and
R&D Institute/University (See No. 9).
It is essential that industry, government and higher
institutions (research institutions) all have the same vision: toincrease national competitiveness through innovation. With thisunderstanding, government should provide incentive either
through tax incentive or innovation funds to encourage innovation
activities and the use of products of national innovation.
It is noteworthy that innovation plays an important role ineach section, industrial supportive components, production, quality
control and marketing. Closed collaboration among industrial sector(especially the state-owned companies), research institutions/higher
education and government is the key success toward innovationbased economy.
Such triple helix collaborations with government incentive,
as described in the previous slide, should occur in a well designed
location where all actors of innovation including their researchand business facilities and government with its supporting
regulation exist. In the spirit of this concept, KIN recommends theestablishment of Bandung Raya Innovation Valley (BRIV), a scienceindustry-innovation park (See No. 10).
This ecosystem consists of innovation actors such as ITB(representing research institute/university sector); local governmentof West Java (representing government sector), Indosat, Telkom,
Inti, Pindad, Kimia Farma, Bio Farma, DI and LEN (all representing

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Innovation by Industrial-Academic Collaborationindustry sector).
Indonesia is the emeralds of the equator. It is among thevery few countries with the most culturally diverse and biologicallyrich environment in the planet. This beautiful archipelago spans
5,000 km2 95° east to 141° east and 2,000 km2 6° north to 11°
south. Uniquely, most areas of this archipelago are covered withwater (70%, or about 3.2 million km2) with only 2 million km2 ofterrestrial area. Even more interesting is that all of the bodies ofwater connecting islands within this archipelago are relatively muchshallower than the oceans surrounding it. Hence it is called the
Maritime Continent, the only one in the world (See No. 11).
What is the implication of a Maritime Continent in the equator?
It simply means that this area has abundant amount of sun light,
rain falls and vast oceanic regions. By putting these three together,you end up with a paradise on earth extremely rich in biodiversity,
in marine biota and in all the imaginable renewable energy sources
such as: wind, hydro, solar, geothermal, bioenergy, etc.
Here is the composition of energy mix in 2005 in which oil
was the most dominant energy provider (See No. 12). However, sinceIndonesia, as shown in the previous slide, is also rich in other sources ofenergy, the 2005 energy mix or composition will and must be altered.
It is predicted that by 2025, through technology innovation as well as,of course, socio-cultural innovation (energy preserving/green living
mind-set), this composition will be changing into an increasing use ofrenewable energy and descending use of oil as the energy resources.
Through Kyoto Protocol, 187 states have agreed to combat
global warming. I would like to propose what I called Medici
Diplomacy: A meeting point between developed and developing
nations to solve or at least to ease our environmental issues (See No.
13). As agreed in Copenhagen in 2010, the Industrial countries will
reduce 50% of their current CO2 emission; while developing countries
are expected to decrease up to 40% of their deforestation activity.
This is not an easy goal, but I am convinced that if there are politicaland scientific wills and each of us play our role to help each other,
this target is achievable. Here is the scenario: developing nations,with their natural richness in biodiversity, provide natural laboratory
to scientists of developed nations to collaborate to find alternative
green energy through technology innovations. On the other
hand, developed nations provide financial incentive to stimulate
developing nations to produce and utilize green technologies. I
developed this idea based on the need of harmonious and peacefulinteraction among the have and the have-not.
Through research collaborations between Japan and Indonesia,
together we could develop biofuel (See No. 14). In this case, Japan
has the advanced technology that could help Indonesian scientists
to develop biofuel industry. Indonesia, on the other hand, has
the comparative advantage of having both human capitals andhuge terrestrial area that could be used to grow (with sustainableagriculture means) the raw materials needed for the developmentof bio fuel industry. Products of this research collaboration such as
ethanol, BDF, methanol, dimethyl ether and diesel, enhance list of

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green energy resources available to be used in Japan by exportingthem from Indonesia. This is a win-win cooperation.
This is a schematic diagram of several products that can beused as fuel for transportation such as ethanol, BDF, methanol,
dimethyl ether and diesel (See No. 15).
If we can achieve following measures, it may be possible that
we have “Energy-Independent City” (See No. 16):
1. Government subsidy of about US$ 10 billion (Rp. 100 trillion) per year
for the fuel, and other refined petroleum products (BBM) need to be
reduced and/or relocated to support research and development ofIndonesia’s renewable energy such as: solar, geothermal, wind, etc.
which is actually our comparative advantage.
2. For this reason, it needs a strong political and economic will toinvest on the research, exploratory and production stages ofthese alternative energies. For example, solar cells, geothermal
units, batteries, etc. should be made by Indonesians by using
technology that is invented in Indonesia. So, we can also say, notonly made in Indonesia, but also Innovate in Indonesia.
Certainly, due to its huge population size, great cultural diversity
and its island geographic distribution, Indonesia’s development plan
must select and target priority sectors. This leads me to suggest, as
mentioned by our President Dr. H. Susilo Bambang Yudhoyono, anational tag-line: Maritime Continent based economy (See No. 17).
Economic sectors that should be given priority are: Food security,
Energy security, Industrial biotechnology, Transportation and national
defense technology, Deep sea fisheries and post harvest technology;
Technology for detection of earth quake, tsunami and climate change;
and Increasing the production of knowledge-based products.
As shown in innovation model for industry sector, the Maritime
Continent-based model also requires collaborations between
government ministries. In this case, they are most likely the Ministryof Industry, Ministry of Maritime Affairs and Fisheries and the financial
institutions (bank and non-bank) to support the R&D activities driven
by universities and research institutions. R&D activities, which are
the embryo of innovation, should be embedded in all stages fromupstream to downstream; from nurseries, processing, packaging andmarketing (See No. 18).
To conclude my presentation, I believe that Japan would
regain its economic giant much sooner through S&T collaborations
with nations across the globe. This is a golden opportunity where
S&T could serve as a universal diplomatic language to bridge
the nations, the developed and the developing. Accordingly,
the Japanese initiative to establish “the East Asia Science andInnovation Forum” is a great encouragement of promoting scienceand innovation cooperation in this region. In S&T, we collaborate toproduce climate-smart innovations. And through S&T, we create agreener and a better planet to live.

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The Power of Dreams
Hiroyuki Yoshino
Former President & CEO, Honda Motor Co., Ltd.,
Former Executive Member, the Council for Science andTechnology Policy of the Cabinet OfficeYour Excellencies, ladies and gentlemen, It is a great honor to beable to speak in front of this prestigious audience.
We are going to discuss how we can possibly create innovative
ecotechnologies and use them to push forward the realization of an
eco-friendly society. I am looking forward to this symposium for ourtheme today is not only global and timely, but of my own long-term
concern and goal as an engineer and business professional.
Before going further, I’d like to express my gratitude to peopleof Indonesia, especially the senior government officials and theirstaff, business leaders and academic leaders who attend here today.
As a retired executive of Honda, I feel obliged to express mysincere gratitude to all of you for giving Honda the opportunityand generous support in this wonderful, energetic and rapidly
growing country to do business. With the competent Indonesianpartners, we started motorcycle production in 1971 and automobile
production four years later. Since then, we have grown togetherand Honda is now constructing the fourth motorcycle plant and thesecond automobile plant in Indonesia. A few years from now, we
will employ more than 30 thousand people including those whowork for our associated parts suppliers. I am quite certain that otherJapanese companies here in Indonesia also enjoy their businesswith you and feel the same gratitude as mine.
Today I’d like to talk a little about what is needed to create
ecotechnology based on what I have learned from my 48-year
experience with Honda in which I spent about 20 years in the
R&D area.
For a mobility company, research and development isextremely important. At the same time, as a social entity, it is justimportant to be able to meet the changing social needs throughour products, services and other activities. I would be more than
happy if my speech could make small contributions to the goal ofthis symposium. Since its birth in 1948, this 64-year-old company
has always been faithful to the philosophy and spirit of the founder,
Soichiro Honda. Soichiro was a truly creative man as partiallyevidenced by the fact that 115 patents and 359 utility model rights
have been filed under his name.
Soichiro was always motivated by his dreams. He challenged
and challenged to realize them. One good example of his aspiration
can be found in his 1954 declaration that Honda aims to win the Isleof Man Tourist Trophy or the Isle of Man TT. Just six years after the18

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start, this man decided to challenge the world’s top motorcycle raceat that time. The 48-year-old entrepreneur said, “Since I was a smallboy, one of my dreams has been to compete in motor vehicle races
all over the world with a vehicle of my own making and to win.”
Soon after the declaration, we found the output ofmotorcycle engine must be tripled to compete. This delayed
Honda’s first entry until five years later in 1959, but Honda won therace in 1961.
When I joined Honda in 1963, the whole company was
still in a frenzy of motorcycle races. Take for example the 125cc
motorcycles. Just like now, the 125cc commercial models carried
the single-cylinder engine. But, Honda team had used twin-cylinder
engines for races. In 1962, the year after the Isle of Man TT victory,
they developed a three-cylinder racing model, and another four
years later, they achieved a five-cylinder model for 125cc engine!
The initial goal to triple the engine output ended up withengines that are six times powerful during a 12 year of great
advancement. As Soichiro said, “You can do it if you really want it.”
What is the bottom line of this story? Well, I’d like toemphasize two things. First, you should dream big. It may takelonger than a decade to accomplish what really satisfies you, butlofty aspirations endure such a long struggle. Soichiro often asked
himself, “How much higher or deeper or farther do you like to go?”His strong commitment to his dreams appears in the fact he named
his first commercial motorcycle “Honda Dream.”Secondly, to create products with great impact, top
management needs to keep providing economic and mental
support to its staff for a long time. As the owner and founder,
Soichiro always cared about the company. He liked to talk faceto-face with his employees. With witty remarks, he beautifully
conveyed the company vision and made them feel involved in its
achievement. In his little spare time, he jacked up his employees at
the R&D sites and factories. He was truly a hands-on boss.
Having this kind of boss, Honda Motor’s top priority has
always been placed on research and development. Our R&D teambecame an independent firm called Honda R&D in 1960 and has
been operated separately from production and sales. This allows
Honda to optimize staffing and resource allocations for R&D.
Currently, we use about ¥500 billion ($6.25 billion) every year for
R&D activities, which stands at around 5% of our total revenue.
This stable funding allows Honda R&D to plan and make theirown decisions on new technology development from a long-term
viewpoint while providing near-term solutions to the market needs.
Now a total of about 15,000 staff, including experts in
production engineering, is involved in these R&D activities. There
were only 600 R&D people when I joined Honda in 1963.
Basically, three quarters of the Honda R&D budget is used toaddress immediate requirements from Honda Motor for products
to be delivered in two to three years from now. The remaining
20% goes to medium-term technology development to becommercialized in five to eight years, and 5% is secured to pursue

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Innovation by Industrial-Academic Collaborationnovel technologies looking into a decade or two ahead.
As for long-term ventures, we have spent 26 years for thedevelopment of our first business jet named “HondaJet” (which
will be delivered next year) and the biped, humanoid robot ASIMO.
Likewise, we embarked on the project for the hydrogen fuel cellvehicles some 20 years ago. All these were not homework from thelate Soichiro Honda and the unknown territories for us. It was true,as Soichiro said, “Success is 99% failure.” In fact, most of our time
was trial and error. We had to make modification after modificationand piled up near successes. When we finally progressed to the end
products, they felt like luscious fruits dropping off from stately trees.
Honda actively transfers the staff between Honda Motor andHonda R&D. Up to now, all of the Honda’s seven president and CEOs
have experienced the top position in Honda R&D.
Let’s get back to my Honda years more. When I joined
the company in 1963, Soichiro Honda went into the automobile
business. This was another dream since his childhood. And in thefollowing year, Honda participated in the Formula One car racing.
But in 1968, he suddenly withdrew from all the races topursue yet another dream – selling his automobiles in the car
kingdom, the United States. At that time, the US authority was
about to enforce drastically stringent exhaust emission regulations
to address worsening air pollution. It was found all automobile
manufacturers would be permitted to sell products in the US
market only if 90% of harmful substances from their exhaust gases
could be eliminated within six years.
Soichiro decided to shift his management resources fromracing to development of qualifying clean emission technologies. He
gave the staff a pep talk, “Fourteen years ago, only we had to triple
the output of motorcycle engine to participate in the race. At thistime, everybody stands at the same starting line. This is a race to slash
noxious substances to one-tenth.” He reorganized the company andset up the ad-hoc laboratory where I was moved. I went to the US in
1969 and stayed there to gather relevant information.
Just then, a global think tank, the Club of Rome, published abook called the Limits to Growth.
In it Massachusetts Institute of Technology, or MIT, predicted
the future of humanity based on their simulations with different setsof parameters, such as natural resources, food supply, population,industrial output and environment pollution. Their conclusion was
sensational because it said the global population would start todecrease during the mid-21st century. In Honda, this book was readardently across the board, and it stirred up much discussion on ourcompany’s future direction. Our conclusion was that gas purification
technology was not just a business goal as our boss aimed at, but animportant foundation of human survival for the future generations.
And, this consensus developed into our environmental vision today:Blue Skies for Our Children.
Four years later, Honda luckily succeeded in the developmentof a new engine system named Compound Vortex Controlled
Combustion, or CVCC, a stratified charge mechanism that uses a rich

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fuel mixture to ignite a much leaner one. This was the only engine
that meets the regulatory requirements. The US authority had topostpone and loosen the required emission levels because no othermanufacturers were able to catch up with the schedule. Then in
1973, the oil shock hit the market, and automobile fashion turned
to small cars as gas prices surged. Honda quickly picked up on thetrend and released the high-mileage CVCC compact models both inJapan and the US. They sold very well.
The success of the CVCC not only realized Soichiro’s dream toenter into the US market, but helped a great deal establish Honda’s
foothold with a favorable brand image.
In 1973, Soichiro admitted that younger staff’s Blue Skies
mentality was right and his days were over. He resigned hisquartercentury presidency and established this Honda Foundation
four years later.
From its experiences, in the development of clean emission
technology, Honda has learned many lessons which can begeneralized as follows: First; Your engineers work with invariably
high morale when your company strives to satisfy great andunmet needs of the society. Second; Your company receives highmarks when people recognize what you bring to the market has
been socially needed. Third; Your company, the government andthe academia can directly or indirectly communicate and work
together within various and cooperative frameworks. The MIT’scommunication via the Club of Rome report is a good example, andthis very symposium is another one.
Before closing my speech, I have one more episode to sharewith you. This is not about R&D, but about the succession of thefounder’s dreams.
It was our second president who decided to start productionin the US although our preliminary study concluded that it would
be difficult to attain the same product quality if we produce vehicles
in the US. Nevertheless, he ordered to construct manufacturing
plants: a motorcycle plant in 1979 and an automobile plant in 1982.
This challenge was all because locally producing cars comprises animportant part of Soichiro’s long-held dreams. And this decision
happened to be a very timely action because it complied with theJapanese government’s policy of voluntary restriction on car export
in response to the intensifying US-Japan trade friction at that time.
We Honda have always believed in “The Power of Dreams.”
Let me paraphrase: Have a big dream, set up a high goal and gather
the power of people who share it with you. Then, almost everythingis possible for man’s ability is also infinite.
I sincerely hope this symposium will be an inspiring event forthe participants. Thank you very much.

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Innovation Systems and Policies(Presentation & Discussion)

HONDA-KADIN
International Symposium
Innovation by Industrial-Academic Collaboration

HONDA-KADIN International Symposium

Innovation by Industrial-Academic Collaboration

Moderator: Atsushi Sunami
Associate Professor, National Graduate Institute for Policy Studies,
Special Advisor to Cabinet Office (National Strategy, Science and Technology, and Space Policy)
and HOF Director

I would like to welcome everyone to this first session on Innovation
Systems and Policies. I will briefly introduce each of the panelists
and ask each one of them for a brief presentation followed by adiscussion. Then, I would like to open the floor for your questions
and comments.
So, let me start by introducing our panelists. On the left,
Prof. Akira Goto, Former Fair Trade Commissioner of the Japanese
Government, Professor Emeritus of the University of Tokyo and
Associate Professor at the National Graduate Institute for Policy
studies. He is one of the leading economists in innovation studies.
Next is Prof. Tateo Arimoto, Director General of the ResearchInstitute of Science and Technology for Society, Japan Science andTechnology Agency, and he was the Director General of Scienceand Technology Bureau with the Ministry of Education, Science andTechnology. He is currently a professor at National Graduate Institutefor Policy Studies as well.
Next, we have Dr. Taizo Yakushiji. He is a Professor Emeritus
of Keio University and Visiting professor of the National Graduate
Institute for Policy Studies. He is also a former Executive Memberof the Council for Science and Technology Policy of the Japanese
government. He is a political scientist working at the issues in theinternational field and science and technology innovation studies.
Next, we have Mr. Franz Gelbke. He is a Senior Advisor to theIndonesian Ministry of Research and Technology. I think we met three
years ago as visiting person for OECD research on innovation systems.
Then, we have Mr. Jusman Djamal. He is the President
Commissioner of PT. Telkom. He is responsible for the Cluster of
Innovation group at the National Innovation Committee.
For the discussion, we have Dr. Gerald Hane, the President andCEO of Battelle-Japan. He is former Assistant Director for International
Strategy at White House in the United States, Office of Science andTechnology Policy that means that he is active in various regions aswell as innovation policy in both the United States and Japan.
So, we welcome everyone for this panel. First, let me start byasking Prof. Goto to give the opening presentation.

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National Innovation Systems andInnovation Policy
Akira Goto
Former Fair Trade Commissioner of the Japanese Government,
Professor Emeritus, the University of Tokyo and HOF Director

It is my great pleasure and honor to discuss innovation with you
this morning.
My talk is about national innovation systems and innovation
policy. Of course, these two issues are closely related because
national innovation policy should be based on the careful
examination of national innovation systems. My talk is a little
bit conceptual, and it has to be the way to set the stage for thefollowing discussion. I hope it is not too boring.
First is innovation. We have to start from this. How does
innovation emerge? There are two ways to look at this problem(See No. 2). One is to focus narrowly on the organizations that are
creating new technology such as universities, government researchlaboratories or companies. But, these organizations do not exist ina vacuum; they are influenced by the environment that surrounds
them which includes laws, regulations, rules and so on.
This leads us to the second broad view that emphasizes theimportance of creating a favorable environment for innovation.
In each case, the interaction of these factors, institutions andorganizations is very important for innovation.
Then, this leads us to the concept of a national innovation
system. Once we can successfully describe a nation’s innovation
system, we can start thinking about how to improve theperformance of the national innovation system through innovation
policy.
The concept of a national innovation system has beendeveloped by several scholars almost at the same time. And among
them, the most well-known is Prof. Richard Nelson of Columbia
University. According to his definition, a national innovation system
is a set of institutions whose interactions determine the innovative
performance of national firms (See No. 3). The key point here is theinteraction of actors in certain institutional backgrounds.
Who are the main actors here? There are three of them(See No. 4). The first actor is universities. They perform two highly
important functions in the national innovation system: research andeducation or human resource development. At universities, these
two functions are performed at the same time and the same place.
This is important for research as well as for education.
The second actor is industries or companies. They conduct
research that is often described as profit-driven research in contrast
to the curiosity-driven research at universities. This profit-driven

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research creates new innovative products and processes, and in
turn, creates jobs and employment.
The third actor is the government. The government provides
funding for education and research and sets rules under which
all these actors have to play. It also conducts research on its own
through government-owned research laboratories.
The environment or institutional background includes
many things such as financial institutions, fiscal or trade policies,
regulatory frameworks and so on (See No. 5). I won’t go into details
today. The actors interact in the environment created by these
institutions, and a national innovation system evolves over time.
The concept of a national innovation system is regularly
employed to analyze national efforts for R&D and innovation. Then,comparisons with other countries are useful to assess your own
country’s system (See No. 6).
This figure shows how national innovations systems are
related to the economic development of nations (See No. 7). It
is taken from a study by two European economists named Mr.
Fagerberg and Mr. Srholec. This is one of the well-known studies totry to quantify the concept of a national innovation system.
The vertical axis is GDP per capita, which represents the stageof economic development. The horizontal axis is what is called thefactor score on innovation systems.
As you can see, the better innovation system a nation has,
the higher its level of economic development is. The correlation
coefficient is 0.86 which is very high. Indonesia is somewherearound the center.
The factor score on innovation systems, which is thehorizontal axis, needs some explanation. The authors used thestatistical technique called Factor Analysis, and the horizontal axis
represents the factor score related to the innovation system such as
the number of US patents a nation has, the number of science andengineering articles, the number of ISO9000 certificates, secondary
and tertiary school enrollments and other factors that characterize
national innovation systems. These component factors are sort ofground into one single factor score.
Now, let me move onto innovation policy. Once we canevaluate the national innovation system, particularly with solid
evidence, we can start thinking about innovation policy to improve
the performance of the national innovation system (See No. 8).
Innovation policy can be classified into three groups (See No.
9). The first type of innovation policy is related to the creation of
new technology which is called the Supply-side innovation policy.
These policies can promote the creation of new technology byproviding, for instance, R&D tax credits, subsidies, governmentbacked venture capital, low-interest loans from the government,
banks and so on. Also, the government can promote education andtraining for scientists and engineers. After all, these are the people
who create new technology.
The second type of innovation policy is called Demand-side
innovation policy. This aims to promote innovation by creating a

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demand for innovative products and processes. For instance, thegovernment can promote environmental technology by announcingthat electricity companies are going to purchase electricity fromrenewable sources at a premium. This practice has been employedby the German government, and it has helped to promote domestic
solar companies in Germany. The Japanese government is trying todo the same in the near future, yet we should be careful that there is
WTO regulations on the government procurement.
Also, as demand-side innovation policy, the government
can educate consumers so that they can start to buy innovative
products. In that way, the government can provide a market
for innovative products, which in turn provides an incentive forcompanies to introduce innovative products.
The third type of innovation policy is Systemic innovation
policy which is extremely important. I have emphasized theimportance of interaction among actors in the national innovation
system to promote innovation, closer relationships between
universities and industry. Also, government laboratories andindustry are very important. If there are structural barriers that
impeded closer cooperation between these actors, removing themwould be the first step. Then, the various tools to promote closer
relationships can be employed.
In the end, innovation is bringing about new products
and processes (See No. 11). Mr. Schumpeter talked about new
combinations to do things differently. It needs not to be new tothe world, but it needs to be new to the company or new to thecountry. It needs not to be a high-tech product invented at a fancy
laboratory with a lot of PhDs. It just needs to be better than thecurrent product. And, this type of innovation plays a major role ineconomic development in many countries. In order to acquire newknowledge to create new products and adapt it to local conditions,
if necessary, and produce better products, a nation’s innovation
system has to have the capability to do so. Innovation policy
can help to improve national innovation systems and promote anation’s capability to innovate.
That’s all I have to say. Thank you for your attention.

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Innovation System and Policy– Administrative Viewpoints –Tateo Arimoto
Director General, Research Institute of Science and Technology for Society (RISTEX),
Japan Science and Technology Agency (JST) and HOF Director

My name is Arimoto. Because I have been involved for many years inJapan’s science policy making as a government official, this time I willtalk about the innovation system and policies from administrative
view points.
This morning, the first item is the historical change of theworld system over the past 20 years (See No. 2). Next is the newperspectives in such a changing world, the STI (Science, Technology
and Innovation). Next, I will explain some aspects of Indonesia’s
innovation advantage from my own point of view. Finally, we needreshaped STI ecosystems.
First, I should point out that 20 years ago, the world systems
changed (See No. 3). Politically, it was the end of the Cold War andtechnologically, three years after 1989, internet services opened
to the general public. Politically and technologically, they opened
globalization. Within these two decades, we have faced difficulties
such as natural and artificial disasters and climate change. But, wehave also faced BRICS surging and economic activity expanding. In
parallel, we have faced economic crisis such as the Lehmann shock as
well as the current Euro crisis.
This is a very interesting picture described by the Economist
almost six years ago (See No. 4). The upper line is the share of thetotal GDP of the G7 developed countries, and the lower line is thetotal GDP of emerging countries. The two crossing points are aroundthe late 19th century and now, which is around 130 years later.
Emerging economies are rapidly growing, so the world economic
and social systems are rapidly changing.
So, we are facing changes in the rules of the game (See No. 5).
The strategy and management of private companies are changing aswell as the public policies of science and technology and university
management, of course.
Another point is that we need technological innovation andsocial innovation for new challenges in innovation values. Social
innovation includes institutional reform and participation by privatecompanies and public participation. Therefore, every country has set
up on green innovation and so have Asian societies. Under such asituation, we need redesigned government and management of STI
systems, locally, nationally, regionally and globally.

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In the last 20 years, you will rememberthat the Asian economic systems have been
rapidly changing (See No. 6). Almost for
20 years until the 1980s, we had so-called
flying geese pattern. Japan was the leader
at that time, and China, India and the otherbig countries were running slowly. But after
the end of the Cold War and the opening ofinternet services to the general public, the lasttwo decades have seen economic integrationand simultaneous globalization across Asia. So,over these years, the economic and also thescientific innovation systems have changed
rapidly.
Next is the new perspective of STI
systems (See No. 7 and 8). I’m going toshow you two charts. One is chart of R&D
expenditures the US Science Foundation
estimated (See No. 9). In the upper-right chart,
left bar is 1996 and right bar is 2009. So, theNorth American and European percentage isdecreasing rapidly, and the Asia Pacific area
R&D expenditure is now rapidly increasing.
The other one is the numbers of doctoral
degrees (See No. 10). This is a similar chart to theprevious one on expenditure. China has a highnumber of doctoral degrees and researchers. In
China, South Korea and Taiwan, they increased
particularly after the Lehman shock.
Coming back to the new perspectives,
one important point is the gravity of scientificactivities moving to developing countries,
particularly in Asia. So, how can we reshape
the scientific government management
and policy making? Also, how can we keep
scientific integrity, ethics and norms in thescientific activities?
What does science and technology
innovation mean in this changing world of the
21st century (See No. 11)? Of course, there are thetraditional values of STI for profit, competivenessand growth. But now, the STI values are
expanding and diversifying into employment,
well-being, safety and social cohesion andfinally sustainability and resilience. Particularity
after March 11th, last year’s big tsunami andearthquake, Japan is now focusing on resilienceand sustainability (See No. 12).
Now I will show you some advantages ofIndonesia from my personal view. One important
point is the population (See No. 13). This is the

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population of the ASEAN countries. The red line is Indonesia witha population of 234 million in 2008. In other countries, Malaysia,
Thailand, Philippines and Vietnam, the population is a little bit
lower. So, the important point is the potential future market as wellas the potential for future distinguished scientists and engineers.
Another important point is the GDP per capita (See No. 14).
Indonesia’s is rapidly increasing. So, probably in two or three years, itwill be US$ 3,000 per capita. This is the turning point of the GDP per
capita as purchasing power because the percentage of people with TVs
is only 56%, refrigerator is 19%, washers is 4%, and air conditioners is
3% (See No. 15). Also, sales of motorcars are rapidly increasing.
The numbers show us that there is a big potential market for
the future for new innovative instruments and services.
Finally, coming back to the STI ecosystem. One important
point is how to reorganize the science and innovation systems toadjust to the changing world.
The first tier is the policy making and science advice systems(See No. 16). The second is the ministries, programs and funding
agencies. The third tier is implementing organizations. The fourth is
the individual scientists and engineers.
So for instance, your president established two years ago the
National Innovation Committee. This is an important message for the
new challenging innovation policies. Now, new Japanese government
is considering reform of our supreme advisory board systems.
The second tier is the reform of the funding agencies.
Vertically and horizontally, we need to connect beyond theboundaries, which means disciplines, organizations and finally
national borders.
This chart shows Japan’s research funding systems (SeeNo. 17). It’s just a schematic. The left-hand side is JSPS, one of the
public research funding organizations that are supporting curiositydriven research and fundamental science. The second stage is at
my mother agency, JST, Japan Science and Technology Agency,
supporting mission-oriented basic research. Finally, NEDO, “exit”oriented research and development, prototype demonstration andsocial experiments. Later this afternoon, NEDO’s Mr. Ishida will show
you NEDO’s stages, areas and activities.
So, how can we bridge among science and technology, society
and the market? This is the main subject. Every country has public
policy on new science and innovation, redesigning funding systems
for issue-driven innovations.
Finally, I stress that we need more collaboration particularly
in Asia. You will remember that the European areas have a lot ofcollaboration with university networks, funding agency networks,
studentships and fellowships across 27 European countries. Well,it’s high time to set up an Asian research area including China,
South Korea and Indonesia (See No. 18). We have a lot of nationalinnovation systems, but we need a more organized system ofsystems under globalization that is coherent and compatible.
That’s my presentation. Thank you very much.

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Radical Innovation Policies
Taizo Yakushiji
Former Executive Member, the Council for Science andTechnology Policy of the Cabinet Office,Research Counselor and a Board Member, the Institute forInternational Policy Studies (IIPS) and HOF Director

I was at the government with my colleagues, Mr. Hiroyuki Yoshino,at that time the President of Honda Motor, and Dr. Kazuko
Matsumoto. I was not interested in talking about what innovationis all about. Instead, I will talk about how we can make government
policy to boost innovation. You can see why we need radical
innovation policy, not innovation policy, but radical innovation
policy (See No. 1).
I have a very lengthy set of slides, so I’m going to point out
only three (See No. 2).
Innovation has many failures and successes, ups and downs.
That makes a cycle and waves. That is the first message I would
like to ask you to memorize. There is a lot of failure, so the cycle isimportant. You can see here the famous Kondratieff long cycle, theup and down of great powers like Dr. Paul Kennedy noted (See No.
3). So, innovation brings you this kind of cycle of failure and success.
Japan is failing because of a lack of innovation, but maybe we cancome back, so it’s the up and down. At the moment, we are coming
down, but we will come up, so there are cycles. And, there is thefamous flying geese theorem.
This is a very famous picture of Dr. Ray Vernon’s product life
cycles same as Dr. Akamatsu Kaname of Hitotsubashi University justafter World War II (See No. 4).
Innovation is not related to science and technology. In order
to boost science and technology innovation, you need otherpolicies like manpower policies and social policies. Without thinking
about manpower policies and social policies, you are not going to
make innovations in science and technology (See No. 5). That’s thepoint. This is the second minor point.
And also, next is a very important point. The social norms, thesocial systems of a country are unique so that countries make uniqueinnovations (See No. 6). Unique innovation is universal innovation.
Indonesia should have its own innovations because you have to touchupon the social norms. Manpower policy is related to social norms.
The American system is very unique. Don’t copy the American
innovation system because America came from religious persecution
from UK, the Anglican church. They started with the science. It’s akind of new frontier. The federal government doesn’t commit itself,
but it helps. So, industry or state has to make their own innovation,
but the federal government helps. That’s the American pluralism. It’sa social norm. That’s why America can make Apples. We cannot make

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Apples or iPads or things like that. America canmake iPads. We can copy, South Korea can copy,
but America can always make new innovationthat is the American social norm or the country’s
philosophy.
Germany has strong science andtechnology. But, the German people hatetechnology. Do you know the German word
“technic-feindseligkeit”? In English, it means“hostility (See No. 7).” Germany doesn’t likescience and technology in your private life. They
hate science and technology. There are a lotof articles on German hostility against scienceand technology. But, Germany’s technology isvery innovative. Why? It is because they havea double track policy. If you have reacheda state of stalemate standardized by theGerman industrial norm, you can eventually
get a stalemate with your own technology.
So, Germany has a double track policy. All thisuseless avant-garde technology switch to the
new standardized technology if the previous
innovative technology has become stalemated.
So, it’s a switch in policy, the German policy.
This is the reason Germany doesn’tlike to get innovation in your life. Recently,
Germany has changed a lot because I thought
German people never used cell-phones, butthere are a lot of German people using cellphones. But when Japanese people put a fax
machine at home, a lot of German people
hated the Japanese. “Why do you have a fax
at home? It will disturb your life.” However,Germany is now changing.
It is my last message. My argument isthat emulation is the key to getting innovation.
And innovation is very, very hard. It’s a cozyword, but its meaning is not just like that. There
are a lot of meanings in that. But, emulation iscompetitive copying. To copy is very important,
but when you copy technology, you can apply
it to your own social setting (See No. 8-10).
Then, you can innovate. So, emulation is the
key to my concept of innovation.
These are my last words. Thank youvery much.

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Innovation Systems and Policies– Flashlights from Indonesia
Franz Gelbke
Senior Advisor to the Indonesian Ministry of Research andTechnology (RISTEK)My name is Franz Gelbke from Germany. For my profile, I studied
computer technology in Berlin and worked for 16 years incompanies, small ones and big ones. Then, I was a managing
director for 14 years at a technology transfer agency in Germany.
And now, I have already been in Indonesia for six years working herewith the Ministry of Research and Technology in cooperation with
the German BMBF which is also the Federal Ministry of Education
and Research.
Ten minutes is very short, so I’m under pressure. But, I would
like to make some remarks because understanding innovation isvery important (See No. 2). I would like to give some importantelements, 30 determinants. The second part is the development
phases within SMEs (Small and Medium-sized Enterprises) by using
the example of the situation in Indonesia. Then, the last part is an
example of how we would like to boost the innovation systems in
the region and in Indonesia.
For the understanding of innovation, of course it’s a big wave.
In the last 10 years, everyone has been saying innovation is very
important. It is very important actually, but you must understandwhat innovation is. There are still a lot of meanings or different
understandings, but the most important is that the responsible
people understand what innovation really is, the kind of modules
needed for that and even what an innovation system is.
Unfortunately, many political people are using the words, butthey are not really understanding what is behind them and what isnecessary for that.
Innovation for me is the successful process of putting a producton the market (See No. 3). It’s not only to have some functional
research. It’s not only the production. Only when you put all together
and put products on the market, then you come to an innovation.
Many modules are very important. I’ve put the companies in
the middle, so when we talk about the development of the economy,
the main goals are the company itself (See No. 4). So, the additional
value, what you have in the country, will be coming from companies.
They are making the products, they are making the additional value.
What does a company need to be innovative? How can
you get a successful product on the market? Of course, you neededucation. When you haven’t educated people, you are really in big
trouble. When education is not so right, when we talk about newtechnologies, then we really have to learn to learn. For a hundred

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years, in one life maybe, you didn’t have many new things to learn.
You just mentioned about mobile phones. I’m actually using a mobile
phone even though I’m German, so the pressure on humans always
to be adaptable is very high even that has to be mirrored by theeducation system. So, we have to learn to learn because it never ends.
Then, of course, we need good research centers anddevelopment institutions. We also need infrastructure. We can’t
deliver the products if you can’t ship it. Then, after all, you can’t
be successful on the market. Also, you need financing systems.
Especially when you talk about innovation in universities,
incubators and so on, there has to be some innovation. It doesn’t
matter if it comes from the public sector or the private sector.
Then, we need support institutions like intermediaries,
incubators, technology centers, project management agencies
and so on. So, this is a big flower of necessary institutions that areneeded, and everybody can do the real work to help the company
and the private sector to be successful.
Additionally, you need good governments. That was alsomentioned by Dr. Zuhal that in Indonesia, there are maybe someweaknesses in the government. I have put the government in the
middle (See No. 5).
So, the challenge that we have in Indonesia is that we reallyhave to improve our government. On one hand, however, we haveto be patient because the democratization process started around15 years ago in Indonesia. We have the decentralization, so there isa huge learning process. It is ongoing here, but of course, it has tobe faster. Globalization is always changing faster, so the pressure on
the government to adapt to the new situation has to go faster. Thatis really important.
The 30 determinants (See No. 6). From the left, we have thepolitical level with different focuses, the institutional level withincubators and technology centers, the programmatic level withfunding systems and the innovation capacity level which includes
all the implementers. Actually, that is nearly the same all over theworld; there are not big differences.
What we, RISTEK, did was we created a questionnaire with
ANIS (Analysis of National Innovation Systems) method, and wealready have six regions where we are trying to analyze these 30
determinants. One difficulty we found was that political people say
they would like to make incubators. That’s nice, but when we talkabout the system, there has to be an environment. The incubator
has to be embedded in something. When there is not a great
program behind that, when there is not a business competition
program, when there is no entrepreneur training, how can you getgood tenants? We obviously have to take care that when we talkabout the different modules in innovation, they are embedded in
the whole system. Otherwise, they will not really be successful.
Companies. In the situation in Indonesia, we have over 4
million small and medium-sized companies. I am very focusedon them. We have a lot of family businesses, and they are faraway from the demand for universities (See No. 7). So, we need

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Session 1clusters, marketing training and so on, but thetechnology needs on their part are quite low.
The second step is mechanical production(See No. 8). This is a company in Makassar.
Actually, they have copiers already, but theunderstanding of some mechanizations, theunderstanding of tolerances and so on is quite
low. They still need basic knowledge about
quality, about standardization, and everybody
needs marketing and promotion.
The third companies are electronic andmechanical development. This is a small company
with around 30 employees, and they deliverto the Ministry of Education in Indonesia. They
have some modules for physical lessons and soon, and they are quite skilled. Then, they alreadycooperate with some research institutions anduniversities to develop new components.
The last example is a company which
is located close to Jakarta (See No. 9). Theydeveloped a pharmacy packaging machine anda bakery machine, so they are developed. They
have around 100 employees. They are alreadyusing CAD systems and need cooperation
with universities for simulation and for finite
element. There are many things where they canreally learn and work together with universities.
What I would like to show is the different
levels of companies, and they need different
partners for the transfer of technology. One which
we have all over the world is the vocational school(See No. 10). For the family business or even forthe second step, the mechanical part, vocational
schools are very important.
The second level is the polytechnics oruniversities of applied science (See No. 11). They
are very application oriented. And, these are
the most partners for medium-sized companies
when they already have developed.
The last one is universities or other big
research centers (See No. 12). Remember, thefirst picture was a family business. Of course,
they have many difficulties to cooperate
together with universities themselves.
When you talk about SMEs, we first haveto convince them (See No. 13). There are many
companies that are not really convinced to doresearch, but we need somebody who has theirown research, then we have to enable them. So,
that is the beginning process that you need topush the button.

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This growth is not a real analysis, so I’d liketo show a trend (See No. 14 and 15). You can see
it takes around 40 years to have obvious result,which means development of the economy
and small companies really needs time. It’s notpossible to do it in five years. Political people
are thinking only about the next election, but
it really has to be a strategy over many years todevelop the companies themselves.
Who can be the partners for thetechnology transfer? That is, at the beginning,
the vocational schools because you need
the basic skills, the basic understanding ofindustrialization, of quality thinking and so on.
Then, coming up the polytechnics for appliedscience, and later on, even the universities.
That’s one, but very often there issomething missing, other industries. Maybe
more than 90% of technology transfers are
between companies themselves.
Let’s take Honda which has many service
stations. That means because you would likethat the customers use your products, youtrain customers. And, you even have electronic
components in your products. When you takea look at the description of microcomputers,
that’s very deeply explained. Even Motorola andothers make workshops together to train others
to use the components. So, it means that 90%
of technology transfer is happening between
companies themselves. Research centers are alittle bit more for basic and applied research,
but they are also focused on bigger companies.
However, all of this has to be a mix. When you
talk about technology transfer, don’t missthat there even has to be a connection and agathering between companies themselves.
Finally, last year, we trained 25 people
for three months: two months in Germany andanother month here in Indonesia on what an
innovation system is (See No. 16). They also got
to work in an incubator, and it was a younger
generation that was highly motivated. What
RISTEK did was that they are now working in
nine regions also focused on the MP3EI withBalitbangda or with Bappeda together to help
the regions to understand what SIDA (Regional
Innovation Systems) is, what a rich innovation
system means and even what technology
transfer means (See No. 17). RISTEK pay at thismoment one year’s salary, but it is not enough

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and I hope that we will pay another year.
Another hope is that they will go to different
regions and can implement in the new regions.
We can’t do everything centralized from Jakarta,
so we have to decentralize it in the regions
where the companies are located.
A short reflection (See No. 18). Innovation
systems need a system between the different
modules and they need good cooperation
between the different institutions. That isa challenge not only in Indonesia, but even
Japanese have some experience that someministries don’t like to work together so close. I
have same experience, of course, in Germany.
Then, depending on the level ofdevelopment of SMEs, we need different
institutions for R&D and need intermediaries
as door openers. We often overestimate
the importance of R&D institutions. Again,
companies help themselves, they help
each other and when you would like to sella product, you also need some transfer ofknowledge.
Okay, thank you very much.

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National Innovation Systems Towards
Low Carbon Society
Jusman Syafii Djamal
President Commissioner, PT. Telkom,
Head of Group of Cluster of Innovation, National Innovation Committee

Thank you very much for inviting me to this prestigious symposium.
Prof. Zuhal has already mentioned about the innovationcommittee and also the objective, why President Dr. H. Susilo
Bambang Yudhoyono created that committee. So today, I would
like to share my view on what I call the national innovation system
towards a low-carbon society because if we frame the nationalinnovation system into one objective, then maybe all the effort will
go somewhere. Therefore, in this case, I would like to share if we candevelop a national innovation system to transform our society into a
low-carbon society.
This is the framing of the issue (See No. 2). In today’s Asia, thepopulation size is more than 4 billion people. But, more than half ofthe region is vulnerable to climate change, so substantial institutionaltransformation towards low-emission development is required. A
strong will, forward-looking vision, commitment to fairness andjustice are needed. This is the frame of why we need a nationalinnovation system with the goal to achieve and transform into a lowcarbon society.
Every one of us already knows that Asia has become the newsource of growth in the economy, and it is also our dilemma (SeeNo. 3). Under the leadership of President Dr. H. Susilo Bambang
Yudhoyono, Indonesia has already thoroughly had the commitment
to do that we are committed to reduce emissions 26% (See No. 4 and
5). It means that with that commitment, Indonesia has already locked
the “system” that we cannot exploit all of our natural resources. We
started considering environmental problems. At the time, there was
the initiative of the Bali Roadmap to change the Kyoto Protocol. In
July 2008, there was the establishment of the National Council on
Climate Change in Indonesia, so there is a foundation in Indonesiathat we can go to the national system of the innovation system forthe building of a low-carbon society.
If we talk about building a low-carbon society, there are
economic instruments, behavioral changing, political frameworks
and also the technology and innovation to develop what we call a
low-carbon society (See No. 6 and 7). What is the objective? It’s that
we have to develop a national system in order to make sure that
our temperature in the world does not rise more than two degrees
Celsius, otherwise we go into the red zone. There will be no one livingon this earth (See No. 8).
With that kind of background, we need a new approach

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on innovation systems (See No. 9). That new
approach is challenging and mitigating theclimate change. The second is low-carbon
innovation and green industrial evolution. I
know that Japan is already leading in this kindof approach. It means that if Japan can share theknowledge and experience how to transformthe society into friendly with the environment
using the low-emission carbon society which
has already been developed in Japan, thenIndonesia can accelerate their commitment to
the world.
The existing paradigm for the nationalinnovation system (See No. 10). Every single
company thinks that if we put restriction for
the environment, this will become a burden tobusiness because they think that this meansincreased costs and reduced profits. The
market also cannot absorb the high price ofthe product, and then the economy cannot
grow. This is the existing paradigm on nationalinnovation systems.
But with a new paradigm, there arepossibilities that if companies focus on green
growth, the restrictions for the environment
can be seen as a business opportunity (SeeNo. 11). And in the market, the integration ofenvironmental parameters into the economic
process can also create a good product that has
good quality, but affordable. Then, economic
growth can be decoupled from environmental
degradation. This is the basis of what I callour national innovation system toward a lowcarbon society.
I have one example here. This is a lesson
I have learned as chairman of the Matsushita
Global Foundation in Indonesia (See No. 12-15).
I will share the lesson learned in Panasonicglobal. There are eco ideas for manufacturing,for products and for everybody andeverywhere. So, the Panasonic’s research
center in Japan created what they call green
technology and green industry. Then, theycame to Indonesia. Working together with
the Indonesian people who have 50 years’
experience of working together as one
company, Panasonic created all the threepillars of the national innovation system in a
low-carbon society.
Honda must have the same. This is
one example. For example, when we talk

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about hybrid, the focus of Panasonic is the battery with energy
management including three areas, the energy saving, energy
storage and energy generation. Then, in those three areas, we canmake the national innovation system into a certain goal of how to
reduce emissions in society. It is also an example of how we canwork together, and this is also what everybody thinks.
My final recommendations are that if we aim to develop
national innovation system for a low-carbon society, investment
and innovation are essential elements in driving the economy
towards a low-carbon society (See No. 16).
Second, governments and businesses will still face thechallenges on how to combat climate change whilst also ensuring
the right conditions for sustainable economic growth. So, we need
government policy in order to absorb the costs of investment and thecosts of innovation within the private sector and universities.
Third is that business process transformation towards green
industry has been undertaken through the development of new
vision. We have to develop a roadmap to zero emission and start theaction for that in order to develop a national innovation system for a
low-carbon society.
And then, investment towards green industry is developed
through a cluster of innovation by learning from the last 50 years’collaboration between Japanese companies and Indonesiancompanies (See No. 17). We can develop what we call an eco
product cluster, an eco manufacturing cluster and an eco ideas
for everybody cluster. It means that if we work toward a nationalinnovation system that we design with a vision from our President,
then Indonesian society can become a low-carbon society working
together with Japan.
That’s my proposal. Thank you very much.

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Gerald Hane
President and CEO, Battelle-JapanFirstly, I would like to thank Dr. Sunami, Honda Foundation
and KADIN for the opportunity to offer comments on this very
distinguished group of speakers.
I have observed science and technology innovation policy
primarily in the Japan and US contexts. And now, I’m more involvedon the venture innovation side by participating in the Japan-US
Entrepreneurship and Innovation Council that the two governments
have formed. However, recently I have become more involved in thesame thing in Indonesia as we have tried to bring some innovations
here to form innovation-based venture businesses in Indonesia.
Then, I have experienced some of the innovation system challenges
that have been discussed.
The speakers have distilled a couple of very important
themes. One is clearly the perspective that innovation must be
considered as a system and that you must consider the ecologyof this system to implement and design policies most effectively.
Achieving important goals such as a low-carbon society, lowcarbon innovation, is a major innovation system challenge thatagain benefits from an understanding of the overall system as the
speakers have laid out.
Just as a personal aside, my nephew was recently in Papua
working on low-carbon policy, and that innovation system in Papua
is a very complex system. So again, you have to understand all of
the elements and how they connect.
Prof. Goto offered a very nice and clear way to frame thisthinking by looking at the policies for supply, policies for demandand policies to affect systemic issues or translational issues. It is clear
where the government can play a role in promoting each of theseelements, and all of the speakers have addressed those. And, thoselessons come from decades of accumulated knowledge. It’s quite
valuable as a reference point.
In addition to the government, foundations also play a criticalrole in catalyzing new ideas. Because foundations connect more
quickly, they are not afraid to challenge new ideas and not afraidof risk. So, in this innovation policy development, foundations also
play a very important role globally.
The second thing was adapting to social norms in the social
system. Each country is quite different in the way business isconducted, in the way innovation interactions are designed, thus it
has to be incorporated into national policy. We are finding that on

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the ground, in our own experience of doing business, in different
countries, certainly doing business in Indonesia has different
characteristics than doing business in Japan and in the US.
So from a business perspective, and again I come from theside of promoting innovation-based venture businesses, one thingthat I would highlight among the many offered is, which is a thing
for the mid-term and which is to better network what alreadyexists. This is what RISTEK is doing with it’s establishment of theintermediaries to try and bring together what already is there andsee if you can create a greater sum. Gain the 1 + 1 = 3 or 4 or 5, kindof outcome.
We think that this is an important step now. For ourinnovation-based company coming into Indonesia, we are looking
for partners to develop innovations, but where do you go? Who do
you talk to? The ecosystems, the groups that allow you to network
are difficult to find for us, coming from the outside. So, if we know
how to access information, how to access partners or whether
they are investment partners or demand-side partners, this isvery valuable. Besides, it’s valuable to integrate with international
entities as well as domestically to better leverage the innovation
resources that already exist.
Among the many good ideas offered from the business side,in the mid-term, promoting venture innovation and networking
would be a very helpful step because there is a lot of talent, a lot ofgood ideas and a lot of capital already available.
And finally, regulatory reform was mentioned today. In every
country, regulations are different and are often very complex.
Particularly as an international entity coming in, it can be quite
challenging to understand them. We find that regulatory clarity
is something that would help smooth towards path of successful
innovation, particularly of the small venture-type of operations.
Again, thank you for the opportunity to comment and in theinterests of time. I’ll stop right there. Thank you.

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Atsushi Sunami (Moderator)
I’d like to take any questions or comments from the floor. If you have any, pleaseraise your hand.

Question from Jon Respati
My name is Jon Respati, and I am from METI (Masyarakat Energi Terbarukan
Indonesia), the Indonesian Renewable Energy Society in Jakarta.
If I look at the MP3EI, as Mr. Djamal said, we saw no sign of green in the MP3EI.
So, how do you agree to omit the green from the MP3EI? If you want to establish
low-carbon technology, then you have to integrate it into the economic master plan
which we call here MP3EI. How do you propose to do that?

Jusman Syafii Djamal
I don’t think I am the right person to answer your question. It’s a policy matter, but
as you saw about the six corridors of the MP3EI, you saw the example in Java. So, if
you want to transform Java as the center of growth of the economy, then you haveto transform the existing industries into green industries. What does this mean? Itmeans that we first have to use raw materials coming from the earth, which means
recycling, reuse and also not to generate waste of that kind in the certain industry
we develop. Then, we can learn from Japanese companies in Indonesia. If you
see how the company works, you can see what they do to efficiently use the raw
materials from the earth. It’s already there.
Second, we can transform all the industrial clusters into using efficient
lighting, for example, and then really helping the industries into more efficient useof energy, more efficient use of material and more efficient use of water. That has
been developing in that area. So, you have to see the MP3EI planning not as an end
in itself, but also as the vehicle to transform our society by helping the collaboration
with advanced technology nations such as Japan. That’s my answer to the question.
Thank you.

Comment from Ilham A. Habibie
I am here in a matter of function actually. I’m also responsible for the research andtechnology within KADIN. It is through this collaboration with Honda Foundation that
we have this wonderful seminar this morning that will extend into the afternoon.
I’d like to say a few words and to hear your comments on what you think
about the role of an organization like the Indonesian Chamber of Commerce inthis particular regard because we are talking about something that is related toindustrial-academic collaboration. Making the R&D work between the institutions
and the universities in the region is already done. But, the use of that in industry is
still very weak.
As Mr. Gelbke already pointed out, vocational schools play a very importantrole in that. As I know from my experience in Germany, when it comes to vocational
schools, the Chamber of Commerce is always very active to establish the curriculumthat makes it really acceptable by the industry so that the people coming out fromthe vocational schools will really be capable.
It is at first a burden to the industry to make spaces available at the factory or
the company because it’s a double system. You basically go to school and work for a
few months, and then you go back to school. Of course, it costs some money for theindustry, but in the end it pays off very well. And, this is something that we need to
improve on in Indonesia.
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Again, I just want to underline that it is important for KADIN to be active
because KADIN determines and establishes the curriculum accepted by thegovernment. But in the end, it is KADIN who makes sure that the individual
curriculum is acceptable to the industry.
The second thing is that in general, for industrial-academic collaboration
which has been said all along, we do not spend enough in Indonesia. I should
think in GDP terms, it’s about 0.08% of GDP on R&D, and its 80%+ is fromgovernment. About R&D from the industry, it is usually spent on buying
existing patents from oversees and paying the royalties rather than to develop
themselves. It has to do sometimes with marketing because our own people
don’t really believe and are not sure about something that has been developedin Indonesia. They are more apt to buy something that has been developed inJapan, in Germany or in the US because there is an image factor involved. A lackof self-confidence is something that KADIN has to do with. I don’t know howthat has been done in Japan in previous times. It must have been many, many
centuries ago or maybe decades ago.
The third thing is also whether you would see KADIN as one of theintermediaries that would make it happen. In that regard, I would like to propose
actually something like a pilot project where we can maybe do something in thecontext of fulfilling all that we have said. Along those lines I have talked to the
President of Honda Foundation, I suggested why doesn’t Indonesia together withJapan, particularly Honda Foundation and with some protagonists in Indonesia
think about something like an electric motorbike for Indonesia. It’s a national
or international collaboration where you can see and check the system, theuniversities, the research institutions, and industry. And also in the international
context, there are so many components that are important for a low carbonfootprint for eco growth, eco market and eco economy.
Indonesia is the third largest country in Asia in terms of the motorcycle
market with about 8 or 9 million units per year. However, we don’t have a single
national event. Number one is China, and they have national events. Number two
is India, and they also have national events. Indonesia? Zero.
I think it would probably be good to have something national inIndonesia, so why not start with something that is relatively new, such as
green technology, green motorcycle, a low-carbon motorcycle, an electricmotorcycle. They can be by hybrids, maybe combined with a bicycle or manyother different opportunities that would be something, a beautiful follow-up
to our symposium today.
Thank you very much for you attention and comments.

Comment from Franz Gelbke
The role of KADIN can be very important. We already cooperate as RISTEK asintermediaries with some of the KADIN representatives. They are very good
existing in Slabaya and also Javatanga.
Many things are driven by the people and even by an organization like
KADIN who has some people very adjusted and very good in the implementation,
but you even have some regions where KADIN are not active. So, that’s the same
when I talk about the different steps of transfer agencies of technology providers.
The universities in Indonesia unfortunately do not have the same level. Of course,
all over the world, the level is a little bit different, but we have to fill in the gaps. It
is the same on the part of the polytechnics.
Again, you have a lot of experience with Germany, and the Chamber in

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Germany is very strong. But of course you get mass payment by the companies inGermany, so they really have a lot of power. And if you remember, I was working
for 14 years as a managing director. This institution, as a technology transfer
institution, was owned 50% by the Chamber of Commerce and the other 50% by
the government. So, you can say that it was really a public-private partnershipwith the Chamber of Commerce, and it was very successful. It was a win-win
situation because the Chamber of Commerce was a door-opener to the companies
themselves and was even running a grant program.
When you mentioned the part of RISTEK as the intermediaries, they weretraining 25 people, but we actually wasted much more.
Also, we tried focusing on the innovation system to change the grant systemthat we used to have. At this time, we were not allowed to give money directly tocompanies. Therefore, we campaigned for a grant program for researchers. But you
still have problems, and project management is sometimes very difficult because
ownership of the project normally has to be in the private sector by the company
who are responsible for the product. Then, they don’t get the payment. So, it isabsolutely necessary that R&D investment be maybe 1% of the GDP. That is one
part. The other part is that you have to change some procedures, and at this time I
have many projects that failed not because of money, but because of the process.
We have to work for more investment. Also in parallel, we have to strengthen the
different processes for the implementation of technology.

Comment from Gerald Hane
The idea of a grant challenge is an excellent idea because not only you mobilize
resources for something that is important for a nation, but there is also a lot of
spillover effect, an additional effect. In that, it inspires a lot of young people to lookat new ideas and to think that they themselves can come up with new ideas. So, it
helps promote this kind of culture, an innovative entrepreneurial culture beyond thebenefit of the actual innovation itself, which again is important.
Grant challenges in general are excellent ideas, but for some reason, they are
not highly used. Maybe they are difficult to organize, but it would be great if such agrant challenge could be organized.
From the international side, an internationally open grant challenge where
you draw the best ideas from the world and choose which way you go would
be a very fascinating way to approach rather than other kinds of platforms. Aninternationally open platform for bringing in the best ideas and choosing the ones
that best match your needs may give you the most cost-effective solutions that are
the best to be offered at the time.

Comment from Eddy Satriya
My name is Eddy Satriya. I am from the Secretary of MP3EI and also the Deputy
Assistant for ICT (Information and Communication Technology) to utilize incoordination with the Ministry for Economic Affairs. I thank you very much forcoming, Honda Foundation, for having such a very important symposium.
I just got an email from Dr. Habibie’s staff while I was in the middle of traffic.
Dr. Habibie believed it was most important for me to attend this morning. So, again
thank you very much.
Actually, regarding the first question of the MP3EI, I’m really happy to join this
symposium because right now I do believe that the things regarding the innovationand the green stuff of MP3EI have to be discussed and prepared sometime andsomehow from our staff.

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So, I ask KADIN and Honda Foundation how to really make improvements
in our implementation of MP3EI so that it can answer many questions regarding
local economics, especially the local situation of innovation. Then, Indonesia canreally realize the largest economy in the next decade by putting more innovative
strategies in the policies regarding, especially in my office, how to use ICT for amore productive level than lifestyle. In this situation, I do offer for looking for somecontact with them to make use of ICT for the innovation itself and how to put moreof the innovation letters and innovation strategies with our colleagues and otherstaff of our MP3EI.
Thank you very much for this occasion.

Comment from Taizo Yakushiji
Japan has a very unique problem of manpower because during the 1970s and1980s, a number of young people went to the US, stayed there and competed with
Americans. They then came back to Japan and became industrialist, innovatorsand things like that.
Nowadays, young people are not interested in going to the US or
somewhere else because they worry about job security, university assistants andassociate professors, which is the serious problem we are facing.
Ten years ago at the government, I made a completely different radical
innovation policy which is called Science and Technology Diplomacy. And
working with Indonesia, for example, in the area of environmental studies andalso national disaster, tsunami and so on, the Japanese government spends
money to cooperate with Indonesia scientists. There is the assumption that in thisIndonesian area of study, with the social application of the joint study, it would
make a different kind of innovation. So, in order to learn such a new innovation,
we can send more and more people to Indonesia, Africa, Asia and Latin America.
And by doing that, we are educating young scientists to be very globalized
because we are getting very inward looking. Young people, young scientists andyoung technologists are getting more inward looking.
So, my idea is let’s work together, the Indonesian and Japanese young people,
to apply an innovative area. The area is always innovative, social application of
innovation is a real innovation. We are lacking that kind of momentum.

Comment from Tateo Arimoto
My last comment is that we need to accumulate knowledge about how to redesign
the innovation ecosystems, nationally and globally. The Ministry of Education,
Culture, Sports, Science and Technology (MEXT) started last year a big, challenging
program, so-called science and technology innovation policy. MEXT deliberated
with the GRIPS, National Graduate Institute For Policy Studies, as a national centerof such newly emerging programs. Now, it is headed by Dr. Goto that programis of course very challenging, but I will stress again that in order to adjust andredesign the other complicated innovation ecosystems, we need new knowledge
and experience to be accumulated. Also, we need expand our international
relationships, not only with the advanced countries, but also with Indonesia and the
Asian countries who are expanding the challenging new program.
Thank you very much.

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Comment from Franz Gelbke
I’d like to make a recommendation again about the electric motorbike. It’s a goodidea because I’m living in Jakarta and would appreciate it if we had a lot of electricmotorbikes in Jakarta as there would be less air pollution.
Two weeks ago, there was a question of establishing electro-mobility inIndonesia. I put some figures together to see what the investment in Germany is.
And, I found figures from 2008 and up to 2014. So, the spend from the industrial side
was around €17 billion and from the government side, around €4 billion. I sense thefigures in Japan are similar, China may be similar and the US, too.
It means that when we go to electro-mobility, we have to recognize that there
is a high competition worldwide. I appreciate the basic idea, but I hope that thepanel in Indonesia can be a little bit focused. In my time here, many projects comeup, and when the project finishes it slows down. So, there is not sustainability.
That is why we need such kinds of projects. We also had a project last timewith RISTEK for a wind power engine. Actually, that failed because investment
wasn’t high enough. So, when we try to start up in a branch of technology, we
have to think who the partners are. I think it is a good chance to have partners,
and we have already a very powerful partner. But, we have to say what is the partof Indonesia, what are the strengths we can deliver in research and what we candeliver on the economy side. Of course, we can deliver into the market, but it has tobe with a strong commitment from the government. Otherwise, it will be difficult tocompete with the existing branches of global companies.
Thank you.

Question from Floor
Thank you very much. I am from the National Research Council in Indonesia. It isquite interesting at our symposium today because we have been talking about
innovation by industrial-academic collaboration. My question is, has Honda
Foundation plans to follow up this symposium because I now have a relationshipwith a small/medium enterprise to produce a component of Honda?

Atsushi Sunami (Moderator)
Thank you. I think I will have to ask the chairman of Honda Foundation to answer
that question later.
I would like to thank the panelists for their valuable contributions.
Thank you very much.

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Session 2
Renewable Energies(Presentation)

HONDA-KADIN
International Symposium
Innovation by Industrial-Academic Collaboration

HONDA-KADIN International Symposium

Innovation by Industrial-Academic Collaboration

NEDO’s Renewable Energy Activities – A Sustainable
Future Made Possible by Renewable Energy

Fumiaki IshidaPrincipal Research Associate, New Energy and Industrial Technology
Development Organization (NEDO)

I would like to express my congratulations on the opening of thesymposium “Innovation by Industrial-Academic Collaboration” jointly
organized by Honda Foundation and KADIN Indonesia.
I would like to thank you all for inviting NEDO to participate
in this distinguished symposium. This is my first time in Jakarta,
and I am thrilled to be here today. I believe that I will have many
opportunities to talk with you individually throughout the day.
As you can see from the title of my presentation, “NEDO’s
Renewable Energy Activities – A Sustainable Future Made Possible
by Renewable Energy,” today I will discuss Japan’s recent energy mix
after 3.11 and NEDO’s activities to promote energy policy throughtechnological innovation in the renewable energy fields of PV(Photovoltaics), biomass, wind, ocean, geothermal, etc.
I would like to briefly introduce NEDO (See No. 2). NEDO’s
mission is to promote R&D and demonstration projects in theenergy, environmental and industrial technologies fields in close
cooperation with METI, and to coordinate and manage various R&D
projects by providing necessary financing to industry, academia
and public research institutes. Currently, the number of NEDO
personnel is approximately 1,000. Our current annual budget is¥150 billion. Our budget and number of personnel have gradually
decreased in recent years.
NEDO categorizes funding into four broad areas and two
supporting activities (See No. 3):
1. Technology Seed Development Activities: subsidies for R&D
projects that aim for industrial application by young researchers atuniversities and public institutes to strengthen Japan’s industrial
competitiveness.
2. National Projects: encompass key industrial technology fields suchas energy & manufacturing.
3. Practical Application and Commercialization Promotion Activities:
energy and environmental technology fields help revitalize theeconomy by speeding up practical application and commercial
promotion through subsidies to private enterprise technology
development close to the stage of practical/commercial application.
4. New Energy/Energy Conservation Technology Introduction and
Dissemination Activities: demonstrations of new energy andenergy conservation technologies that can secure a stable energy
supply for Japan and contribute to the mitigation of climatechange. Knowledge and know-how acquired by these activities are

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applied to technology development.
Supporting Activities:
1. Kyoto Mechanisms: Japan supports international efforts tomitigate climate change, promote the sustainable development ofdeveloping countries and to acquire Kyoto Mechanisms credits.
2. International Projects: Japan’s various energy and environmental
technologies are demonstrated worldwide in expanding Japan’s
presence in the global market by promoting international
standards, establishing international networks and cooperative
relationships to contribute to resolution of global energy andenvironmental issues.
In the wake of the Great East Japan Earthquake and subsequent
Fukushima Daiichi nuclear power plant accident, the Japanese
government is currently conducting a fundamental review of Japan’s
Basic Energy Plan (See No. 4). In order to formulate a new Basic Energy
Plan, these points were presented for discussion last December.
Renewable energy will play a more important role in the new Basic
Energy Plan which will be announced in the summer of 2012.
This figure shows Japan’s electricity supply structure (See No. 5).
Nine percent of Japan’s total electricity is generated from renewableenergy, of which 8% is derived from hydropower and 1% is fromother renewable energy including PV. Renewable energy capacity is
still considered to be low in Japan.
This slide shows a breakdown of Japan’s renewable energy
generation capacity (See No. 6). Hydropower accounts forapproximately 90% of the total. PV capacity has been steadily
growing and increased by nearly 1,000 MW in 2010 alone.
Let’s look at renewable energy generation costs (See No. 7).
Compared to coal and LNG, the cost of power generation using
renewable energy resources is still high. The most important
issue in further introducing renewable energy is reducing power
generation costs.
On July 1st 2012, Japan’s Ministry of Economy, Trade andIndustry, or METI, will launch a new feed-in tariff scheme in whichpower companies purchase electricity generated from renewableenergy resources at a fixed-price for a certain period of time (See No.
8). This new scheme is expected to accelerate the introduction ofrenewable energy in Japan.
NEDO carries out R&D and demonstration projects related
to various renewable energy resources with the aim of reducing
generation cost as well as improving performance (See No. 9).
For example,
1. NEDO’s R&D on PV has a history of over 30 years.
2. Biofuel production that does not compete with food resources isalso being studied.
3. NEDO is currently planning a demonstration project for offshore
wind power stations.
4. In 2011, NEDO started R&D and demonstration activities relating toocean energy, such as wave power and tidal current power.
NEDO has been carrying out research and development onvarious types of solar cells some of which are shown here (See No. 10).

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In order to improve efficiency and reliability, R&D projects covering awide range of materials are currently being promoted.
I would like to mention a few of our achievements in recent
years (See No. 11). This slide shows the result of a successful R&D
project entrusted to Sharp Corporation. Sharp achieved the world’s
highest non-concentrator solar cell conversion efficiency of 36.9%
using a triple-junction compound solar cell with a cell surface ofabout 1cm2.
In February 2011, Solar Frontier launched operation at a PV
factory with a production capacity of 900 MW per year, the largest
production capacity in the world (See No. 12). The solar modules
produced at this factory are a result of NEDO’s CIS PV technology R&D
that was entrusted to the Showa Shell Sekiyu Group starting in 1993.
Thin-film solar cells that Sharp has developed under NEDO
projects have been successfully installed at a large-scale solar power
generation plant in Thailand (See No. 13). Thin-film solar cells are
suitable for hot climate regions as the cells can maintain energy
conversion efficiency even under high temperature conditions.
Biomass material for producing bioethanol is classified bygenerations, and each generation has its unique features (See No.
14). I’m going to explain about this. The first generation, represented
by sugarcane and corn, produces bioethanol using fermentation
technology. The markets for these plants have already formed andare active mainly in Brazil. However, technology development that
does not cause competition with food supplies is needed.
The second generation, represented by wood and grass,produces bioethanol from cellulosic materials that are not incompetition with food supplies.
However, producing ethanol from wood usually takes
considerable time, and technology development for efficiently
producing ethanol from wood is needed.
NEDO is now carrying out R&D focusing on the second
generation and a system that integrates progress from the cultivationof crops to ethanol production.
In addition, NEDO is carrying out technology development on
third generation biofuel production, represented by microalgae. The
goal is to realize efficient and high yield production technology by
the year 2030.
NEDO’s efforts also include the development of biomassenergy technologies (See No. 15). In recent years, our focus has beenplaced particularly on technologies for manufacturing bioethanolfrom biological materials, including wood and herbaceous plants,
which do not compete with food supply production. Some of these
activities are being carried out in cooperation with Southeast Asian
countries which have an abundant supply of feedstock.
This photo shows NEDO’s demonstration plant for bioethanol
production technology which is one of the largest plants in Japan(See No. 16). The plant aims to establish technology that efficiently
produce bioethanol from woody biomass at a low cost, and it iscapable of producing 250 ℓ of bioethanol per day.
In the “Development of Technologies for High-efficiency

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Conversion of Biomass and Other Energy” project, technology for
efficiently and inexpensively producing fuels and chemical feedstockfrom fermented cellulosic biomass is being developed (See No. 17).
More specifically, high-yield plants suitable for use as an energy
source are being developed using genetic modification technology.
Research is also being conducted on innovative technologies that
include methods to produce efficient and low-cost biofuels with theaim of achieving practical application after 2015. A comprehensive
process for such technologies will also be established. In addition,technology to inexpensively produce propylene from bioethanol isbeing developed.
NEDO is conducting Japan’s first full-scale demonstration
project on offshore wind power systems (See No. 18). Particularly
in Japan, there are few onshore areas suitable for wind power
generation. This demonstration project is therefore expected topromote the introduction of offshore wind power generation
systems by verifying the systems’ technological effectiveness andeconomic efficiency.
Wind turbines for offshore wind power generation systems
tend to be getting larger as such systems incur high construction
costs (See No. 19). NEDO has recently launched a project to develop 7
MW-class wind turbines for offshore wind power generation systems
with the aim of deploying business opportunities in the future.
The development of high-efficiency and low-cost wind turbines
is expected to promote the introduction of offshore wind power
generation systems in Japan and abroad.
In addition to solar energy, NEDO is also conducting researchand development on ocean energy (See No. 20). In 2011, NEDO
started technology development and demonstration research
relating to ocean wave power and tidal current power.
Japan has the third-largest geothermal resources in theworld after the US and Indonesia (See No. 21). However, Japan has
developed less than 1% of the potential resource. Since the 3.11
earthquake in Japan, there is much more attention on geothermal
power generation as an alternative to nuclear power plant. Dueto this increased interest, strict development regulations aroundnational parks have been re-evaluated. Based on NEDO’s past
geothermal resources studies, many new development plans arebeing proposed by geothermal companies.
There are two major types of geothermal power generation
systems (See No. 22). One is by steam power generation. The second
one is by binary power generation system. This means a working
fluid other than water is used like Pentane with a low boilingtemperature. Steam generation systems have been commerciallyavailable for over 100 years and is the most common geothermal
power plant in the world. Secondary low-temperature working fluid
systems are now being developed for geothermal power generation
system. This is for distributed power generation where there is low
grade waste heat available.
In 2010, Japan captured about 70% of the global market sharefor geothermal power systems via three companies, Mitsubishi

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Heavy Industries, Ltd., Toshiba Corporation, Fuji Electric Co., Ltd.
(See No. 23). There is a high level of trust in the systems they sell due
to a long history of reliability and accurate planning estimates. Fuji
Electric recently started selling commercial binary power generation
system in addition to their steam turbine systems. They are moving
forward with the large scale worldwide introduction of the binary
system technology. NEDO supports accelerated development ofdomestic and global market expansion and provides the necessary
support to these leading companies.
Thank you very much for your attention. If you would likefurther information, please visit our website (See No. 24).

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Indonesian Policies on
New Renewable Energy
Djangjang Sukarna
Secretary to the General Director, Renewable Energies and Energy Conservation,
Ministry of Energy and Mineral Resources, Republic of Indonesia

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Session 2

Honda’s Future Progress inEnvironmental Technologies
Takashi Moriya
Senior Chief Engineer, Honda R&D Co., Ltd., Research Project Leader,
Fuel Cell Vehicles

Good afternoon, everyone. I am Takashi Moriya of Honda R&D. Today,
I would like to show you what action Honda is taking for the future of
power train.
First, let’s take a look at the overview of issues concerning
the environment and energy (See No. 2). Then, let me discuss the
direction in which Honda is heading in evolving our technologies asmentioned here.
The environment and energy issues. Everyone has the desire
to travel freely anywhere at anytime. The fundamental value of carsand motorcycles is to realize free travel (See No. 3). What Honda
is pursuing is to realize “the Joy and Freedom of Mobility” and “aSustainable Society where People Can Enjoy Life.” However, there areseveral challenges we need to solve for their realization.
This slide shows the severity of environmental and energyrelated issues in the past, present and future (See No. 4). In the past,
the major issue was air pollution caused by exhaust gases containing
toxic substances and factory emissions and so forth. Now, we are
faced with significantly different issues, such as global warming
and future energy needs. To address these issues, we must bringforward research and development of CO2 reduction technology andtechnology that enables us to take advantage of alternative energy.
At the same time, we need to figure out how we can generate
renewable energy for future demand.
At Honda, we are not just developing technologies for internal
combustion engines and hybrids which use gasoline as energy (SeeNo. 5). We are also working on various technologies to utilize CNG,
bioethanol, electricity and hydrogen with a mission to diversify
energy sources.
Let us look at Honda’s estimation of how much nextgeneration vehicles can help reduce CO2 emissions (See No. 6). As we
can see here, the introduction of hybrids and plug-in hybrids alone
is not enough to achieve the target of reducing wheel-to-wheel
CO2 emissions to one third of current levels. In other words, theelectrification of the automobile needs to be based on low carbon
electricity generation.
Biofuel and renewable energy sources are solutions being
investigated toward zero CO2 emissions.

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Next, I explain the direction of technology evolution of
Honda (See No. 7). With ICE (Internal Combustion Engine) efficiency
improvement in mind, we can further increase combustion
efficiency mainly through Honda’s original variable valve timing
technology, called “VTEC.” VTEC can also be employed to cylinder
deactivation technology and variable cylinder management
technology. We also push forward the technology advancement on
hybrid, which takes advantage of both an ICE and motor.
There are two things we can do for ICE to reduce CO2 (See No.
8). One is to reduce driving energy, meaning reducing vehicle bodyweight and rolling resistance. The other is to improve the efficiency
of ICE. Integration technology supporting eco-driving is also aneffective means.
In 1999, Honda launched and began sales of the first hybrid
model, Insight and has extended the lineup since to the Civic and
the Accord (See No. 9). When developing the second generation
Insight introduced in 2009, we were on a mission to make it
accessible to more customers by lowering the price, thus putting
more hybrid cars on the road, which ultimately reduces overall
CO2 emissions. In addition, Honda offers a wide variety of hybrid
models to suit customers’ needs, such as the CR-Z with the “Funto Drive” element which Honda believes is the true appeal ofthe vehicle and the FIT series which offers more utilities. As you
can see, offering various hybrid models, with each model having
its own character, at a reasonable price, will help accelerate thepenetration of hybrid vehicles in the future as the call for CO2
reduction heightens.
For realizing “the Joy and Freedom of Mobility” and “aSustainable Society where People Can Enjoy Life,” Honda has
this future vision in which “Renewable Energy Technology” and“Electromotive Mobility” are managed together through Honda’s
unique information communication (See No. 10). Based on thisconcept, we announced two years ago that we would start ademonstration experiment on the next generation of personal
mobility. We are working jointly with two locations in Japan, withthe city of Torrance, California in the US and China.
Each vehicle has a different driving range, characteristic andperformance (See No. 11). When introducing a next generation
vehicle, it is important to consider the role of each vehicle withthese differences.
Honda also tries to expand vehicle electrification forincreased environmental benefit through developments of plugin hybrid EV and Battery EV (See No. 12). This is an example ofexperimental plug-in hybrid vehicle. It is based on a mid-size
sedan, the US version Accord. It uses highly efficient 2.0 Li-VTEC
engine which was specifically developed for this model combinedwith two high output motors. In order to maximize its all electricrange, Li-ion battery has been developed. This vehicle currently
achieves the all electric range of 25 km.
As for additional efficiency enhancement by electrification,
various technologies and know-hows from the development of

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EVPlus in 1990’s as well as FCX Clarity have been further advanced
and used (See No. 13). This EV for demonstration is based on Fit
which is very popular for its utility. Technologies for its motor andLi-ion batteries are adopted from FCX Clarity. In this particular model,
its 200 V charging time is 6.5 hours, and the range after being fully
charged is currently over 210 km. Honda’s experimental plug-in
hybrid EVs and battery EVs are now being used at demonstration
projects conducted with same locations of Plug-in Hybrid.
Honda has developed renewable energy since the beginningof the 1990s (See No. 14). We have developed a solar cell which
is much thinner compared to conventional types and requires as
little as half the energy to manufacture. This was made possible byusing a CIGS (Copper, Indium, Gallium and Selenium) compound
different from conventional silicon material. Honda Soltec Co., Ltd.
has already begun production and sales. We will have this Hondamade solar cell installed in solar-powered charging stations in ourheadquarters in Saitama prefecture as well as our manufacturing
plant in Kumamoto prefecture. In the demonstration experiment,
we are planning to verify the effectiveness of such renewableenergy use.
Honda started its fundamental research on fuel cell in late1980s (See No. 15). As the milestone of the development, FCX waslaunched simultaneously in Japan and the US in December 2002.
This made us the first to introduce fuel cell electric vehicle (FCEV)
in the world. FCX was not materialized just in one step, but it is
the accumulation of our efforts in development of various key
technologies including:- Motor technology for electric vehicle which was released in
the 1990s.
- Energy management technology which was developed forhybrids such as Insight and Civic hybrid.
The progress was also made to the fuel cell stack which isthe core technology for the system (See No. 16). The fuel cell on
the FCX Clarity is much smaller, lighter and more powerful thanits predecessors. This was made possible by the use of new cellstructure. Compared to the stack used for the previous version of
FCX, the power/volume density has been increased by 50% andpower/weight density by 67%. Such technical leap makes our fuelcell stack to be one of the best in the world. From the early versionof our fuel cell stack of 1999, power/weight density has been
increased by five times. Now that the stack is compact enough to
fit in the center tunnel, the flexibility in vehicle design has been
dramatically increased.
Each new FCX model has shown an improvement inenergy efficiency and vehicle range (See No. 17). FCX Clarity is no
exception. It now achieves an energy efficiency of 62% or twicethat of a gasoline-hybrid vehicle. Vehicle range using the Japanese
10-15 test mode has been extended by some 30% to now reach 620
km. Users require a range of 300 miles or about 500 km in normal
driving conditions with the air conditioner/heater system on, so weare working to extend the range still further.

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Here is the commercialization scenario for FCEVs andhydrogen stations drawn by the Fuel Cell Commercialization
Conference of Japan (See No. 18). This scenario seescommercialization of FCEVs and hydrogen stations beginning in
2015. Last year, it was complemented by the added goal of making
FCEVs and hydrogen stations a viable business by 2025.
Here is a list of the companies that have responded to this
scenario by issuing a joint declaration on January 13th of this year
(See No. 19). This joint declaration calls for commercialization to startin 2015 with the energy companies readying hydrogen stations infour major urban areas and the automotive industry developing
production-ready vehicles.
In an effort to materialize a completely renewable concept, thestation uses solar panels to supply electricity to generate hydrogenthrough electrolysis of water, then the hydrogen is used to power
fuel cell vehicles (See No. 20). While hydrogen is used to power
the vehicle, it once again returns to water as an emission. Honda
continues to experiment this carbon-free and circulating concept
with hydrogen from water which returns to water, and the electricity
for splitting water from renewable energy.
Hydrogen generated by natural and renewable energy is acarbon-free energy carrier which human beings can create.
Honda was developing a plan to install a solar hydrogenstation for the first time in Japan on March 27th 2012. This solarhydrogen station has a high pressure water electrolysis systemsolely developed by Honda, and only with electrolysis of water, it
can produce 35 MPa (Mega Pascal) high pressure hydrogen (See No.
21). Used together with another power source, it can produce 1.5 kghydrogen in 24 hours, with which FCX can run for 150 km.
The FCX Clarity tested in Japan has the function of electricity
supply (See No. 22). This vehicle has a connecter in the cargo space
for a special inverter which can supply electricity. This can be usedin case of natural disaster. This system was developed rather as
emergency power supply for the damaged area than for normal
use. Making use of the uniqueness of fuel cell, compared to engine
generator, this system can produce more than seven hours with max
9 kw. This is six days worth power supply for an ordinary household.
The special inverter can be delivered in a cargo space only whenneeded. When the vehicle arrives at destination, the inverter can beused for AC output.
This is our smart community image including hydrogen(See No. 23). Usually, smart community is based on electricity only.
However, hydrogen will be a buffer of electricity from renewableenergy. Renewable energy is usually not stable. So, peak power
storage is very useful for levelization of energy management incommunity. Hydrogen production, storage, transportation andusage are very important to achieve this smart community.
Our system is an example for this concept. In the future, toward
the clean society, we Honda believe the smart combined systemusing electricity and hydrogen will come.
In order for Honda to realize the “Joy of Freedom with

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Mobility” and a “Sustainable Society where People Can Enjoy Life,”
we will pursue vehicle technologies and utilization of Renewable
Energies including these items (See No. 24). As mentioned earlier,CO2 reduction does not just require powertrain technology, but also
needs to utilize renewable energies.
Before I finish, I would like to introduce the global
environmental slogan that Honda has established. It is; “Blue Skies for
Our Children” (See No. 25). We can’t help but hope that one day thiswill all become a reality.
Thank you very much for your kind attention.

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Innovation by Industrial-Academic Collaboration
Writer: Rachmat Gobel

President Commissioner, PT Panasonic Gobel Indonesia,
Chairman, Indonesia Renewable Energy Society, 2012 – 2015

Co-writer & Speaker: Riki F. Iblahim

Executive Director, Indonesian Renewable Energy Society(Masyarakat Energi Terbarukan Indonesia, METI)

Innovation, as we all know, is related to bring and put something
new into economy (financial prudence) involving a creation andrealization in the economy system; new commercial plan and design;
new way of commercial strategy; and goods and services.
It is absolutely vital for Indonesia to increase its national
capacity supporting Indonesian national economic development, a
policy popularly referred to as “Pro - Growth & Pro - Job” as statedby Indonesia President, Mr. Susilo Bambang Yudhoyono (See No. 2).
Therefore, as a matter of basic policy, the government of Indonesia
has to maximize and assure the success of the implementation offood and energy sector. In renewable energy, job-creation related
to energy project development would make ever-increasing
employment opportunity to Indonesia as well as decreased
dependence on energy fossil because energy sector has become an
important issue for society and national energy security.
Today, Indonesian policy related to the energy project andjob-creation is affirmative in maximizing the use of renewableenergy project; application of domestically-produced materials
and equipment, and employment of national service companies
in the development of infrastructure projects. GOI (Government ofIndonesia) already declared Presidential Decree No. 5/2006: National
Energy Policy to meet with 17% of Indonesia energy mix; emission
reduction that was declared in Green Economics Development, Bali
2011 to meet with GHG (Green House Gas) 26% or up to 41% in 2020
(See No. 3). We, as Indonesia Renewable Energy Society (METI in
Bahasa Indonesia or IRES in English), definitely support national plan(central and local government) on increasing public access to energy;
increasing the security of energy supply; adjusting price of energy
with its economic element; making adequate energy infrastructure
available; as well as increasing the efficiency of energy use.
For your information, GOI has a road map for national goals
to establish security of energy supply by 2025 (See No. 4). The
measurement factor to meet with this national goals must be basedon the achievement of energy availability and creating an optimalenergy mix: the role of oil decreased to a maximum of 20%, the role ofgas increased to a minimum of 30%, the role of coal increased to 33%,
by utilizing brown coal, coal liquefaction & coal briquette, the role ofgeothermal & biofuel increased to 5%, respectively, also the role ofother renewable energies increased to 5%. National energy security is to
reduce domestic fossil energy supply by decreasing oil import gradually.

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There are many challenges (national challenges) increased
every time we get influence from globalization which we cannot
entirely control (See No. 5). Indonesia energy price today has notsupported diversification and conservation energy program, and fossil
is still heavily subsidized. Economic development disparity among
regions is also difficult to manage due to the lack of infrastructure.
Nonconformity distribution of energy sources and consumers also
lacks infrastructure. High-energy subsidy is still dominant due tothe poor society. Indonesia energy industry (oil & gas), as well as
electricity sector, is not yet competitive. Market volatility & fossil
energy prices are dominant, besides, pro local industry has not been
worked well due to lack of coordination. Unhelpful Investment isstill not responded well. Incomplete action plan of National Energy
Policy is everywhere, and so is the fact that energy is still consideredinfrastructure, not as a commodity. Overlapping regulation between
the sectors and regional autonomy mentioned above remains high(weak). Unclear regulation to investment is still dominant due to poor
coordination and low education.
How to act to challenges mentioned above? As far as weknow the challenges, a strategy to respond on this issue must be
developed (See No. 6). As mentioned above, innovation means
bringing and putting something new into the economy (financial
prudence) that involves a creation and realization in the economy
system; new commercial plan and design; new way of commercial
strategy; and goods and services. METI believes we must develop
mechanisms for energy prices that are the main factor. Then, wemust re-construct the priority. We must make domestic energy needas high priority.
As a part of world commitment, we must improve the security
to energy supplies and pay attention to environmental aspects.
We must apply principles of good governance and transparency
as world needs those. Encouraging private investment for energy
development is one of the common world strategies to build acountry. Do not forget to apply energy conservation and ensure
energy provision to any social group. The world needs to enhancecommunity empowerment in the energy management and increase
the efficiency of supply and energy utilization. We must support
on ways of energy diversification program used by local energy
utilization. METI, as organization, must work with GOI to build
economics with Energy Self-Creation Village (Desa Mandiri Energi).
Certainly, an important part of innovation is to develop humanresources capacity and technology as well as to maximize the staterevenues from energy sector.
As Indonesia is an under developed country, we must makeconducive/favorable policies that is related to mandatory of
renewable energy utilization; Implementation of feed-in tariff as animportant part of energy policy; Bankable contract (PPA) in order
to meet with investor’s requirement; Incentives (fiscal & taxes) used
for long-term national goals; Transparent licensing process without
being convoluted (See No. 7).
To meet with economic growth, an attractive local bank

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funding package, information of accurate
renewable energy sources is required. To meetwith world competitiveness, the developmentof local technology and industry must beplanned and executed properly. The last but
not the least, the national standardization ofequipment should be enacted to renewableenergy technology. This is important to build
and implement.
Innovation by industrial-academic
collaboration strongly supports and encourages
self-reliance domestic industry (See No. 16). Thisis a common sense, and to start the coordination
for Indonesia energy security program, we must
establish or develop:
First, a policy affirmative in sector
goods/ product and service will create positive
impacts to the national interest if industry
and businessmen develop as well to leadthe process of initiative development. But, atthe same time, they keep hold of GOI to do a
study and examination as an important part oftoday’s global need.
Second, BPPT (The Agency For The
Assessment and Application of Technology) as
the technology research development should
possess greater authority to the independenceof domestic industry and technology needs.

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Public Transportation Systems(Presentation)

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Public Transportation System in Jakarta
Fauzi Bowo
Governor, the City of Jakarta (DKI Jakarta)

A very good afternoon to all of you. Prestigious guests, ladies
and gentlemen; President of Honda Foundation, Ishida-san;
Yoshinosan, former President and CEO of Honda Motor Co., Ltd.;
Ilham Habibie, Chairman of the Standing Committee on Research
and Technology, Indonesian Chamber of Commerce and Industry.
I’m very delighted to speak in front of you in this seminar,
particularly in regards to this very interesting thing, transportationin Jakarta because the traffic jams are one of the biggest issues
the city is facing, and it impacts on almost everybody. Almost
everybody here has complained about the traffic jams in Jakarta,and since this is almost the campaign time for the governmental
election, the topic has become more and more interesting. Maybe it
is also even more important to influence your decision on June 11th.
I will try to explain once in English and once in Indonesian.
Since the journalists are Indonesian, I think some of mypresentation will be in Indonesian. I hope you don’t mind.
I don’t want to go into details on the reasons why weare facing what looks a little like an impossible task for Jakarta
because if we look closely at the road capacity of Jakarta, the roadmap, the road ratio of Jakarta is only 6.4% compared to Tokyo with
21%; Paris, 24%; Singapore has a road ratio of almost 17% (See No.
2). Road ratio is actually the space for roads compared to the total
space or area of one city.
And if you look closer into the demands, there are almost 22
million trips daily in Jakarta, and 70% of those trips are motorized.
The number of motor vehicles is skyrocketing thanks to all the
manufacturing here, and most of their products are sold in Jakarta
and the surrounding area.
As a matter of fact, in 2011, we have almost 8 million units
running in Jakarta, and 98% out of the 8 million motor vehicles
are private vehicles. On the other hand, public transport is very
limited. You have less than 2% of the total motor vehicles in
Jakarta. Every year, the number of motor vehicles is growing by 8%
to 9% while our capacity to increase our road plan is very limited.
This is mostly due to the fact that planning permission is very
difficult. Usually, it involves a social problem in Jakarta. Now thatIndonesia has become a very democratic country and everybody
can complain and proceed to the court, it takes some time to clean
up all these cases.
So having said all this, let us look closely at the congestion

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Session 3that we are experiencing in Jakarta (See No. 3). The use of road
space is certainly not efficient and not effective. We don’t haveany means to control the growth of motor vehicles. Because
you, Honda Foundation, know best if we restrict the growth of
the automobile industry by 0.5% only, there will be many, many
workers and laborers unemployed, which we cannot take.
So, what we mostly are building towards the future is
restricting the usage of private vehicles. It’s done in almost every
big city in the world, Singapore, London and Stockholm. We will
introduce electronic road pricing at the same time as we increase
the capacity of public transport for some areas of the capital.
The other impact that also has to be seriously taken into
consideration is the commuters, about 2 to 2.5 million daily
commuters coming from the surrounding areas into Jakarta who
mostly use their private cars, and of course, this is an additionalburden to the traffic congestion in Jakarta (See No. 4). Currently, there
are approximately 8 million motor vehicles, everyday entering the cityand going back into their residence destination at nighttime. And,
this has caused a lot of traffic jams particularly at those entrances andexits, coming and going into Jakarta.
This will give you a clearer picture of the percentage oftransportation on one hand and use of traffic in Jakarta (See No.
5). Seventy percent of these trips are motorized, only 30% are notmotorized, and then because of this distribution, 51% or moreare using public transport, which is only less than 2% of the total
number of vehicles, and 44% is still using their private vehicles.
So for this reason, we have set a master plan for what we call this“Macro Transportation Scheme for Jakarta.”
This is the worst scenario that will hopefully not happen in
Jakarta because if we compare the total number of motor vehicles
with the absorbing capacity of the road plan, we are going tobecome stuck in 2014; two years from now (See No. 6). Hopefully,
this is not going to happen because we are going to improve ourpublic transport capacity accordingly, and we are also trying to
restrict the usage of private vehicles at the same time.
According to the Macro Transportation Scheme (PTM),
mass public transport will be the BRT (Bus Rapid Transit) and thetrain (See No. 7). This is the solution for the traffic congestion in
Jakarta. Then, we will implement traffic restrictions: motor vehicle
restriction, road pricing, restriction in parking management;
improvement in the road network capacity: intersection/junction
would be resolved through Intelligent Transportation System (ITS)
including fly-under and underpasses, road widening and new roaddevelopment. We will also install pedestrian and bicycle lanes on
the major arteries of Jakarta.
All this will be followed by the next question, which is how
to finance this because our financial capacity is limited. I will give
you some explanation about how we can finance the MRT (Mass
Rapid Transit). We have been discussing the MRT for the last 20
years. There are many, many options that we had and were trying
to explore. Basically, we knew that the MRT or such infrastructure

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could not be financed by commercial loan or commercial money, so
we kept on looking not for a commercial loan but for a loan with along-term scheme and certainly the lowest possible interest.
Finally, we found that by getting a STEP loan, a Special Terms
for Economic Partnership, from Japan with 30 years plus 10 years
risk period, and the interest was 0.25% on a yen basis. Only this typeof financing would enable us to build the MRT. If it is not feasible, wewould not be able to start the construction of the MRT.
There is another point that I wanted to mention. If Jakarta’s
government had not taken the initiative to take over the majorityof this loan, the MRT would still be a dream for Jakarta. So, we took
over 58% of the total loan while central government took only
42%, the lesser than us.
It is certainly our responsibility and we feel that we
could not wait. For that reason, we dare to take this kind of
responsibility, the majority of responsibility. Driven by this, I finallymade my decision and have driven my financial management to
uphold the objectives that we have to push in order to back up theloan agreement.
So, we worked hard for the last five years and finallymanaged to get the approval, a clear balance sheet from the state
government. It was the best deal we could get, and then on top of
that, this is the first time that Jakarta has been given this kind of
approval by a state audit. This will certainly back-up our financial
capability in acquiring this loan from any institution in the world.
The other obviously important thing is to change themindset of my people and of my administration, in short, theyshould feel more responsible for any kind of loan or financing
debt that they have received from a third party. In this particularcase, it was from the Japanese government, but also from thepublic money because this year we are going to issue municipal
bonds, not general purpose bonds. So, this goes hand in handbecause in our long-term financial projection to pay back our loan
agreement, we have to present our cash flow up to the year 2025,
and this has been approved by the Japanese government.
What I would like to underline once again is that this kindof big project requires consequences to be fulfilled by the entire
administration. While at the same time preparing for bond issue,
we are also rated by an independent agency. Recently, they gave
my administration the rating of AA+ which is very good and we are
happy with that. This is once again proof that we have been goingwell with our financial management in the capital city.
So, as the final step, all that we need to do next is to build up
on these strengths and enhance the trust that we get from the capital
market, from the people, from financial resources from abroad and to
make it more useful to improve our infrastructure in Jakarta.
Ladies and gentlemen, this is what I have been trying
to explain that if we improve the capacity and quality of our
information communication technology, we are sure that we cansave a lot of traveling, so we can control the demand for travel
and reduce the traffic at the same time. Jakarta is already, not68Session 3

100%, but more than 60% to 70% is wired, so we can have accessto information and communication technology from everywherein Jakarta. If we can combine this with the ability to control
this demand for travelling, I certainly hope we can reduce thetraffic that are not necessary, but at the same time we need to
improve the other aspects, road plan, public transport and traffic
management at the same time.
Once again, ladies and gentlemen, this is a shortpresentation. I know talking about traffic congestion in Jakarta
will take hours, maybe days, to come to a conclusion and cometo a suggestion for any kind of solution. But, this will give you at a
glance about how serious the many causes that lead to the traffic
congestion in Jakarta and the solution that we are going to push
for the future are.
I would like to close my presentation by mentioning that themost important part of the solution is the financing. It will cost the
government of Indonesia almost 15 trillion rupiah to build up the firststage of the MRT from Lebak Bulu in the southern part of Jakarta to
Bulus-Bundaran HI in the center of Jakarta. Then, it will cost another13 to 14 trillion rupiah to continue into the old city of Kota.
Now we are under negotiation for the financial need for
East-West. East-West would connect the city of Cikarang in theeast and the city of Balaraja. It is beyond my administrative
boundary, but we do so because we know that the demand is
not only in Jakarta. It is also very high in the neighboring areas ofJakarta, and that will certainly cost more. It will be possible in therange of 100 trillion rupiah, but this is what we need.
And at the same time, we also need to improve the capacityof the train. Existing train railways that are already operating
here need to be improved. We also need to build flyovers andunderpasses in order to make it possible for the trains to go fasterand increase the frequency of the trains.
Some of these things can be done by public-private
partnership, but on the side of the MRT, for example, it is notalways possible to invite the private sector to join because it isexpensive unless you get a full concession, which is most likely notpossible in Indonesia for the time being. So, we have to change a
lot of regulation, even my administration had to change the law on
the railways in Indonesia to make it possible for us to run the MRT
because according to the previous law, railways are a monopolyof PT Kereta Api which made it impossible for us to run the MRT.
I used to say to everybody that my first goal is to look for proper
financing for infrastructure, the second is how to change theregulations because there are many regulations that have to bechanged and be especially tailored for the capital city to acquire
the proper financing.
The third point is that in most cases, we forget to improvethe capacity of human resources that are supporting the system.
If we go into the system which is based on the financial market,
all the human beings, all the staff involved in that should change
their mind and prepare themselves accordingly.

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This is what we are doing in Jakarta currently. I’m happy
with the result, taking office in 2010. And I’m looking forward to
having faster development which will bring maybe long, great
steps towards solving the many problems of the capital city in the
coming years.
Thank you very much for your attention.

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Session 3

Honda’s Views and Approaches on
the Next Generation Personal Mobility
Toshio Yokoyama
Senior Chief Engineer, Technology Development Division, Honda R&D Co., Ltd.,
Research Project Leader, Next Generation Transportation Systems

Good Afternoon. I am Toshio Yokoyama of Honda R&D, Japan. I joined
Honda in 1979 and have worked on automotive R&D, fundamental
research. I am currently leading Honda’s future transportation system
research including ICT (Information and Communication Technology)/
ITS (Intelligent Transport Systems) area. Today, I would like to talk aboutpublic and personal transportation systems.
These are my topics today (See No. 2). First, I want to tell
you about a variety of mobility and its surroundings. Then, I will
explain mobility issues in urban areas and share our goals andtechnologies for future transportation society. And finally, I willshow you our vision regarding future of personal mobility and urban
transportation.
Mobility is an essential human need (See No. 3). When
you trace locations where Homo sapiens’ fossils were found, it issuggested that our ancestors emerged from Africa some 6 million
years ago. Our ancestors departed Africa about 90 thousand years
ago and took 50 thousand years to reach Eurasian Continent andOceania. They then arrived in South America about 10 thousand
years ago. In other words, humans traveled all around the world in 80
thousand years. Mr. Soichiro Honda, the founder of Honda, once said,“No matter how often you talk on the phone, it is no match to faceto-face communication and firm handshakes.” Mobility is essential
for human lives and I believe it is vital for us to evolve.
These are from World Business Council (See No. 4). Honda isan active member of this council. When income increases, peoplechoose personal mobility over public transportation because
personal mobility is more convenient and gives you more freedom.
Naturally, travel distances increase dramatically as people use more
personal mobility. When the economy is growing, people andproducts move actively. When people move more, the economy
grows more.
Cars give you convenience and freedom. In 2000, there were
700 million vehicles in the world (See No. 5). Now, the number is
growing much faster than we expected. As the world economy
expands, the number of total vehicles may reach more than 2 billions
by 2050.

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Here, you can see a variety of mobility choices (See No. 6). We
can categorize them into two major groups. One is personal mobility
that can move freely anytime anywhere. The other one is public
transportation that can move large number of passengers from one
point to another. Among personal mobility, motorcycle and car areespecially convenient because they can travel long distances as you
can see.
The number of cars is growing fast in the world due to its
great convenience as I mentioned earlier. However, its energy
consumption and CO2 emission are challenges when you compare
to other transportations (See No. 7). As the number increases, theseissues will become bigger. We also concern that traffic accidents andcongestions will increase and that may impact economy.
In the next chapter, I will touch on city and transportation.
This graph shows the global population growth trend (SeeNo. 8). You can see that developed countries maintain the status
while population in emerging nations is likely to grow drastically.
Especially, the urban population in emerging countries increases somuch that it is expected to reach 5.5 billions in 2050.
These are major challenges that urban areas in the world
currently have (See No. 9). Global warming, increasing traffic
accidents and energy consumption are some of the global
issues. There are local specific challenges, too. More people you
have, more congestions you will have, and pollution gets worse.
When you have less people, public transportation system will be
depressed so that mobility-poor people like seniors lose mobility.
As a countermeasure, some cities in developed countries haveintroduced “Compact City” concept. On this map, you see red dots.
These are some of the successful compact cities such as Portland
in the US, Nantes and Strasbourg in France. Our team visited thesecities to study them.
First, look at the history of city structure to study how itchanged from age to age (See No. 10). In the 1770s, the Industrial
Revolution began. People used to work at home or close to home,
but with the industrialization, people started to commute. Aboutthe same time, London and Paris began to develop as modern
cities. In the 1920s, high economic growth and mass consumerism
drove people to live in suburbs and work in cities. People started
to use personal cars, and that advanced road infrastructures.
Megacities polarized into one, like Tokyo and New York where
public transportation systems are well established and the otherlike Los Angeles and Houston where people are largely dependenton personal cars. In the 1970s, a concept of compact city was born,and Nantes and Strasbourg incorporated the idea in the 1980s in aneffort to achieve sustainable society.
These are some of the actual compact city examples
around the world (See No. 11). This is a typical compact city roadinfrastructure. The blue line is an orbital road built around the centerof the city. From the city center, several arterial roads run radially.
Vehicles travel mainly on this infrastructure. On the orbital road,many Park & Ride systems are available. You leave your suburban

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home by car and park it at your Park & Ride station, then you cantake advanced public transportation such as Light Rail Transit (LRT)and Bus Rapid Transit (BRT) to the city center. You don’t need to use
your car to get to the city center, so there is no traffic. In the city
center, people move around with LRT or BRT. That makes streets
safe for pedestrians and bikers. Basic concept here is not to remove
vehicles but make good use of variety of transportation systems.
From what we learned so far, a sustainable transportation
system should (See No. 12):
1. Provide a variety of mobility choices
2. Provide safe environment for everyone on the road including
pedestrians, bikers, and those who use public transportations andvehicles.
Good compact cities with a sustainable transportation system
like this has lower dependency on personal vehicles in comparison
to that of North America. We can see there is a sound balance
between personal vehicles and public transportation.
Honda aims to bring joy of using personal mobility all thetime. We are focusing on several key technologies to achievesustainable society (See No. 13).
For the next personal mobility, electric vehicles and variety ofmobility options for optimal means of transportation are importantin order to deal with growing travel distances and to reduce CO2.
For Traffic System, ICT/ITS information network that can help
driver make decisions while driving is essential.
For Energy area, energy management that helps reduce CO2 incities is critical.
Now, I will talk about Honda’s idea of future personal mobility.
This page was shown by Mr. Moriya earlier, however, this page
looks like sales talk of Honda. It is why I would like to explain again(See No. 14). At Honda, our vision is to provide “the Joy of Mobility”
and create a “Affluent and Sustainable Society.” To achieve these, we
are working toward Honda Electric Mobility Synergy Vision. With thisvision, we can manage electric mobility you see on the right circle andvarious energy technologies including renewable on the left using
Honda’s unique information communication method.
Honda is conducting feasible study to validate practicalityof electric mobility in cities and charging system using solar power
generated and stored at home. We are looking at this from energy
management point of view.
When thinking about personal mobility’s future, we firstlooked at LRT (See No. 15). LRT is considered as one of the mostenvironmentally friendly inner-city transportation. We use LRT asa benchmark for developing our future personal mobility concept.
We want to create a personal mobility that exceeds LRT both inenvironmental performance and traffic capacity. Environmental
performance can be achieved with electrification and light weightbody technologies. Traffic capacity can be satisfied with platoon
driving using ICT/ITS technologies.
Quite a few studies on platoon driving are conducted in Japan(See No. 16). For inner-city traffic, some are working on optimal traffic

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light control based on road density to smooth congestions. For
city-to-city highways, a method of coordinating a group of vehicles
driving on exclusive lanes is considered. This will help reduce traffic
jams and improve traffic flows.
For electric vehicles, Information and Communication
Technology would be more important (See No. 17). Japan has also
started several feasibility studies to improve charging support
services. The studies include easy way to check battery charge levels
and to find charging stations.
This is our idea of Smart Community (See No. 18). In thiscommunity, homes, cars and charging stations are connected byinformation, and all are managed by Honda Energy Management
System. Honda Energy Management System can help us reduce CO2
and become less dependent on grid with this Smart Community
concept, with which we can continue to enjoy joy of mobility andstill can make society sustainable.
Now, I will use Jakarta as an example to talk about future ofurban transportation.
Let’s look at Indonesia (See No. 19). According to a report fromthe United Nations, World Urbanization Prospects, about half of the
population in Indonesia live in cities, and the number is expected toincrease substantially. As urban population increases, the numberof towns with a population of 500 thousand to 5 millions is likely
to balloon. What can we do to provide enough mobility freedom
and successful lifestyles to the growing population in urban areas?
What city size and structures are appropriate? What kind of citytransportations are required?
As Indonesia’s economy grows, the number of motorcycles
and cars also increase solidly (See No. 20). However, Jakarta is also
facing a traffic congestion issue, and in order for Jakarta to continue
its successful development, traffic congestion is something Jakarta
has to find good solutions.
DKI Jakarta has an area of 660 km2 with a population of 10
million (See No. 21). Jakarta’s metropolitan area is about 30 km in
radius with a population of 30 million. Jakarta has a very similarurban structure as Tokyo.
At the earlier of the presentation, I said Jakarta and Tokyo
are similar. However, there is one difference between Jakarta andTokyo: trains (See No. 22). The total length of rails in Tokyo is 10 times
longer than that of Jakarta. And, Tokyo metropolitan trains has 10times more transport volume. In spite of its length, Tokyo trains run
amazingly punctual. I can commute always on time. Punctuality is
one of the appealing points that a competitive city has to offer.
However, Tokyo still has extreme congestion issues (See No.
23). High land price and high concentration of business in innerTokyo made people move to suburbs. Many Japanese commute
from outside of central Tokyo so that even with great passenger
capacity, trains are packed more than full, and many roads arecongested. New York City is well known for its high land value, but
still, New York has less people commute from outside of the city
compared to Tokyo. This is a problem in Tokyo. However, the land

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value in Tokyo is declining, and we see some people have started tocome back to central Tokyo.
Urban area in future should be a place where we can movefreely, safely and comfortably and can lead affluent life (See No.
24). On the other hand, we need to consider our resources on earth
are limited. It is therefore very important for our future city to besustainable. In suburban cities in Japan, the city centers are losing
people to outer areas, and this is damaging suburban economy.
Revitalization effort to bring back people into the city centersis critical. In mega cities like Jakarta and Tokyo, we want to startbuilding more than one hubs with multiple functions instead of one
large hub where everything is concentrated. A city structure withconnected smaller-scale hubs will provide mobility freedom andsustainable lifestyle.
This slide shows various personal mobility that will play
important roles in Honda’s sustainable society vision (See No. 25).
Inner-city, suburbs, further out, each situation and each location has
its optimal form of mobility. Honda is working hard to provide “Joyof Mobility” and aim for “Sustainable Society” by reducing CO2 fromour motorcycles and cars, by providing comprehensive supports
for people using mobility with information-communication and ITS
technologies and by optimizing energy necessity for day-to-day life.
Ecological and clean personal mobility will come to your towns
very soon. Honda wants to work with you to create a low-carbon society
where all of us enjoy freedom of mobility (See No. 26). Thank you foryour attention.

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Wrap-up Session

HONDA-KADIN
International Symposium
Innovation by Industrial-Academic Collaboration

HONDA-KADIN International Symposium

Innovation by Industrial-Academic Collaboration

Ilham A. Habibie
Chairman, Standing Committee on Research and Technology, KADIN Indonesia

Good afternoon, ladies and gentlemen. His Excellency the Japanese
Ambassador to Indonesia is also present with us today, and I thankyou to everyone who is still here at this late hour.
I have honor and pleasure to try to wrap up, which is not easy
because the scope of today’s presentations is very large.
We started this morning by basically looking at nationalinnovation systems on both sides, in Indonesia and Japan. We
had a very good insight into the role of, for instance, how Japanis running national innovation systems in regards to energy andmanufacturing technologies, mobility and other very important
topics for the future.
Then on the Indonesian side, the chairman of the National
Innovation Council, Prof. Zuhal, gave a little outlook on how Indonesia
perceives the future in which a system based on what he calls the
1-747, 1% of GDP needs to be spent on R&D, which is not the case at
all at the moment as we are only spending less than 0.1%, actually.
Then, we need to focus on, for instance, food and watersupply or new energy systems and other important topics.
In the afternoon, we were then looking into the topics suchas energy in general, renewable energy on both sides. Throughthe presentations, it became clear that there is similarities inboth countries, with one exception that is Japan has alreadyfully embraced nuclear technology and nuclear energy as a very
substantial part of the current energy mix, about 30% or a little less.
In Indonesia, it is not the case at all. And, you have heard from thesecretary general of the Ministry of Energy and Mineral Resourcesthat we are looking at it as a last option.
The role of renewables on both sides is clearly understoodand is certainly very important. We are looking at the areas such as
geothermal, wind, solar, biomass, all of which are largely available
on both sides, but the usage is undeveloped. Therefore, Indonesia
as well as Japan wants to go firmly into a more substantial part ofrenewable energy-based sources for the energy in the future.
It was obvious that there is a great potential to collaborate
with one another because of the similarity in the availability ofresources on both sides, geothermal and others.
In the last part of our presentations, we were talking abouttransportation in both countries. The Governor of Jakarta, Dr. Fauzi
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costs today. We have certainly a lack of investment here, and if you
compare ratios here, it was quite amazing that the road ratio in
Jakarta is just around 6% compared to cities like Tokyo and Paris
who have road ratios of 17%. Investment is very slow, around 0.01%
per annum for additional roads in Jakarta, which has to do withcongestion, and the legal situation with difficulties to acquire newland shows the obvious challenges for Jakarta.
Land acquisition is one, and of course, the other is the tariffs
imposed on the general public in order to persuade people to use
public transport, which is not available yet, but hopefully it will beavailable soon. The MRT or more buses will be especially shown as
an alternative to use.
And then, as another example, if you compare Jakarta with
Tokyo as a city of double the size of Jakarta, the statistics shows
way more railroads, about 3,000 km of railroad compared to about
300 km. Also, only less than half a million people a day use public
transportation in Indonesia. In Tokyo, it is 8.6 million, so it is a
big difference and is the point that Jakarta can specifically learnsomething from Tokyo.
Going back to where we started, it was very clear to all of us thatlearning from the example of Honda, Honda is a company basicallywhere everything has to start from a dream. People need to dream big
in order to achieve something that can be useful for humanity. And as
the founder of Honda, Mr. Soichiro Honda dreamt about a motorcycle
and then immediately tried to invigorate the corporation by giving
certain targets. Whatever the target was, he made everyone cherish
and enjoy and reaped the fruits of those targets.
Basically, competition participating in international events
such as races was very early on identified as a means to develop anddrive the organization to perform and excel in their fields.
So, the road ahead for Honda was clear. From motorcycles tocars and last but not least, it will be something else. It may be spaceeven we do not know. But right now, hopefully in next year, we aregoing to see the first HondaJet which is going to be produced in the
United States.
And as I learned in private conversation, which was not clear if
it’s true or not, Honda even produces the engine of HondaJet, so it
is very unique as one manufacturer produces both the airframe andthe engine. In today’s world, this is quite unique and probably it is astrength to have more control about the fundamental technologythat makes sort of vehicle successful.
The overarching topic is basically how to innovate bycooperation with industry and academics. And now, again comingback to the first session, this morning in various presentations wasmade clear that collaboration between these two are essential to
make it happen. Universities and also vocational schools are learningfrom our industries in the context of SMEs and others, and it isessential to really drive innovation and the growth of the economy.
Innovation doesn’t necessarily mean rocket science. It canbe something very simple, very new, not necessarily in the wholeworld, but maybe in that country. In addition, it needs to be very

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down to earth, so it doesn’t have to be very sophisticated, but
a little contribution to make it more easier for the consumers in
the country or for the manufacturers in that country and for acollaborative effort between the two, industry and academics,
supported by the government.
Then, as Prof. Zuhal was saying this morning, the so-called
triple-helix synergy between ABG, academic, business andgovernment, is basically necessary to maximize the synergies
between the three in order to drive the economy and to go. We
are talking about an efficiency-driven economy to something thatJapan has already achieved, which is a large based and innovationdriven economy, and that is the future of Indonesia.
Even though I stand here as the Chairman of the Standing
Committee for Research and Technology, the Committee has notbeen very dominant within KADIN in the last decade. The KADIN
organization has looked into the current practices of the industry
and current issues, but for research and development, you can seethat in Indonesia it has not been done a lot, and that is certainly
an exception on the government side. However, the private sector
certainly needs to invigorate its investment, its commitment, its
projects in R&D to basically drive their industries, their companies
to a better future. So, we have to push collaboration with academics
and with the government as necessary.
And, I would just like to close the wrap-up by saying thank youvery much to all the participants and hope that this will not be thelast symposium held in Jakarta by Honda Foundation. I feel this canhopefully be continued, and I thank everybody here and perhaps His
excellency can say a few words to all of us to encourage us.
Thank you very much for your kind attention and all the best.
Thank you.

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Yoshinori Katori
Ambassador of Japan to Indonesia

First of all, thank you for your kind invitation. This kind of symposium
focusing on innovation of science and technology and thecooperation, as was mentioned the ABG, is one of the most important
areas where we should continue our efforts. I’m therefore very happy
that I could come here and also notice that this kind of important
symposium is taking place.
As I mentioned, it will be a very useful and important activity
if Honda Foundation can continue this kind of symposium inJakarta. We, I mean Japan and Indonesia, already have a historyof cooperation, but recently we are also discussing how we cancontinue this very important relationship. One key point is innovationand science and technology, so I am very glad to notice that weare already cooperating in many areas and I hope, especially in thefield of innovation and in the field of science and technology, thatIndonesia and Japan can cooperate even more in the future.
Thank you very much for inviting me.

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HONDA-KADIN International Symposium

Innovation by Industrial-Academic Collaboration

Akira Kojima
Former Chairman, Japan Center for Economic Research and HOF Director

Good afternoon, ladies and gentlemen. After the beautiful wrap up
with eloquence from Habibie-san, I almost lost my job.
Before my wrap-up, I would like to deliver a report about
what Japanese people are thinking about Indonesia. It’s a feelingof deep, deep, gratitude. After the disaster, your society and people
are so warm and kind, and the most impressive thing is that second
year after Japan’s earthquake disaster, your President together withthe first lady visited the disaster stricken areas and encouraged thepeople. This is very important. Japanese people were deeply moved.
After the disaster, the decline or loss in economic activities
was tremendous. At that point, auto production declined by nearly
50%. A similar thing happened in the year 2009 after the Lehman
Brothers collapse. These were different reasons. In 2009, demand
disappeared in the international markets. But, this time after thedisaster, we became unable to produce. Our capacity was lost
because of the disaster. The supply chain was severely disrupted.
But, it has recovered now to the pre-disaster level.
Relating to today’s subjects, we are now suffering fromenergy problem: How and how much we can encourage renewableenergy sources. Last March we lost a vast nuclear power station,
so at this moment out of the total 54 power stations all are now
idle, and we are now discussing when we can reactivate some ofthe power stations. But anyway, at the moment, 30% of the total
potential electricity supply capacity has been lost.
After these discussions, I feel that we haven’t reachedagreement on several points. First, as was mentioned by Gotosan, we are just in the midst of a great transformation. Thistransformation can be characterized by historical events. It’s not
9.11 but 11.9 in 1989. This is the day when the Berlin Wall fell. Next
year the unification of two Germanys. Next year implosion of Russia,
symbolizing the end of Cold War. Then, almost explosion of foreign
direct investment leading to the creation of globalization and theglobal economy.
And Japan is now focusing on the next global economy,
VIP, Vietnam, Indonesia, and the Philippines. You are one of themas your high economic growth proves. For next step, we have acommon understanding that our challenges can be achieved only
by innovation, technological and social innovation. This issue isvery important.

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Wrap-up Session

We discussed very much, the discussion was very rich, and it
was so compressed, so it is not easy for me to swallow.
Anyway, today, I am not the specialist in natural science.
My area is social science, so I see with that perspective. We haveto speak in terms of growth accounting. The economic growthratio is determined by contributions of three factors. One factor
is the continuation of the input of capital. The second factor is
input of labor. The third factor is what we call the TFP, total factor
productivity. In Japan, the demographical situation is different fromyour country. We are now entering into depopulation age. The total
population is beginning to decline. So, unless we fix our systems
and challenge innovation, our growth ratio will constantly go down.
That’s our challenge.
As for Indonesia, you are still developing. That’s the strong
point. China, they are growing, but in 10 years’ time, they will face
all of a sudden an ageing demography after one-child policy morethan 30 to 35 years since its introduction. So, China is facing verysoon and very tough demographical problems. In the terms of
demographic bonus, Japan’s was lost almost 10 years ago. In China,
the bonus is peaking out, in 10 years they will lose all the bonus. But
in Indonesia, the bonus will last another 20 years. You have plenty oftime to fix and introduce technological and social innovation. Thatis a very, very important thing.
Anyway, I have a lot of learning about this very compresseddiscussion. May I thank you for your attention.

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Closing Remarks

HONDA-KADIN
International Symposium
Innovation by Industrial-Academic Collaboration

HONDA-KADIN International Symposium

Innovation by Industrial-Academic Collaboration

Closing Remarks

Kunio Nakajima
Vice President, Honda Foundation (HOF),
Former President, Japan Chemical Innovation and Inspection InstituteThank you for your kind introduction. I am Kunio Nakajima, vicepresident of Honda Foundation. Through a whole day, I believethat this symposium became very fruitful and valuable for all of us
here today.
Started with keynote speeches from Indonesia and Japanside, we had presentations and discussion by experts of Innovation
System and Policy in the morning. Then, forefront professionals
introduced their works related Research and Development.
There were various symposiums between Indonesia andJapan. But, today’s symposium is uncommon because we had
prestigious representatives all together from academics, industries,
and business areas related with science and technology. I supposethat every session fully excited you thus you must be little tired.
Taking this symposium as the beginning, we would like tomaintain close relationships with Indonesia for further developmentof both of us. I thank you very much for attending this symposium.

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Published by: Satoshi Matsuzawa
Honda Foundation 6-20, Yaesu 2-chome, Chuo-ku, Tokyo 104-0028, Japan
TEL: +81-3-3274-5125 FAX: +81-3-3274-5103 http://www.hondafoundation.jp©2013 Honda Foundation
Published April 2013

HONDA-KADIN

International Symposium“Innovation by Industrial-Academic Collaboration”