Judul: The impact of technological growth on economic performance in Indonesia
Abstrak: Technology continues to evolve over time. It is inevitable that the technology is needed in all sectors or aspects of the economy. It requires economic actors to know and develop technology. Using technology, a work or production process will be completed quickly, accurately, and efficiently. Production costs could also be reduced. Economic performance can be assessed with high economic growth and low unemployment also poverty. Technology is the catalyst that will accelerate economic growth. It has a large impact on the welfare which could reduce unemployment and poverty. However, the technology also has the dilemma where in addition reducing unemployment, it can also increase unemployment if it is not accompanied by the skill and quality of human resources. Technological growth not always has a positive impact on poverty reduction. Residents who do not have skills in absorbing technology will get knocked out of the labor market, so that poverty will get worse. In 2012, Indonesia's economic growth is quite high at 6.23 percent. The growth almost reached the target in the Medium Term Development Plan 2010-2014 where economic growth target is set at 6.3 to 6.8 percent and it is expected to reach 7 percent the year before period 2010-2014 ends. On the other side, unemployment and poverty levels are still high. Open unemployment in Indonesia in 2012 is 6.14 percent, while the poverty rate reached 11.66 percent. The numbers are still quite high when compared with the target in the Development Plan 2010-2014 to reduce unemployment by 5-6 percent and the poverty rate is expected lower to about 8-10 percent. This study has three objectives: first, identify technological growth in Indonesia. Second, explore the contribution of technological growth to economic growth. The third objective is to explore the influence of technological growth on the economics performance as measured by economic growth, unemployment, and poverty. Technological growth in this study was approached by the growth of total factor productivity (TFP). TFP estimation results will be obtained the growth of technology in Indonesia and its contribution to economic growth. Multiple regression analysis is used to see the impact of technological growth on Indonesian economic performance as measured by economic growth, unemployment, and poverty. Over the 1981-2012, the average of economic growth in Indonesia is 5.42 percent. It can be decomposed into three: employment growth by 1.08 percent, 3.46 percent of capital growth, and 0.87 percent of technological growth. The high average capital growth in Indonesia showed that technological growth is labor-saving. During 1981-2012, technological growth provides a considerable contribution which is 30.48 percent to Indonesian economic growth. That is the second position after capital growth which is 56.10 percent. Labor growth contributed only 13.42 percent. This suggests that technological growth significant in spurring economic growth. High capital growth contribution also showed that the technological growth in Indonesia is more capital- intensive or labor-saving. Based on the best regression model found that technological growth will increase the unemployment rate. Basically every technological growth has a tendency to reduce the use of other production factors in the production process at any output level. Technological growth
Keyword: technology, economic performance, total factor productivity