Policy Effectiveness Review of Innovation and Business Support Programs : Part One - Portfolio Mapping, Assessment of Quality of Policy Mix and Functional and Governance Review (English)

Strengthening private sector innovation and productivity is a cornerstone of Indonesia's medium-term economic development strategy. The Government of Indonesia (GoI), in its Medium-term Development Plan 2020-2024 (RPJMN), has articulated a set of strategic priorities related to boosting private sector productivity, which are based on improvements to the human capital base (workforce skills and scientific research) and firm-level innovation and technology adoption, particularly among MSMEs. These, in turn, underpin related desired economic outcomes such as higher-value exports and employment opportunities, and improved competitiveness in industrial and creative economy sectors. In this context, the purpose of the Policy Effectiveness Review on Innovation and Business Support Programs (iPER) is to holistically assess the consistency of GoI's current policy mix and recommend potential adjustments to maximize its performance and impact going forward. This is part of a broader agenda to help improve the quality and efficiency of government spending in Indonesia. This iPER exercise, which is conducted jointly by the World Bank and Bappenas, consist of four key phases, the first two of which are covered in this report (Part one), with the remaining two (Part two) planned to be carried out at a later date: (i) mapping of the GoI's portfolio of relevant support programs and analysis of how well it aligns to the challenges faced by Indonesia's private sector and the GoI's strategic priorities in the areas of innovation and productivity; (ii) functional analysis of the quality of design and implementation of the policy mix and its governance arrangements; (iii) analysis of the efficiency of the policy mix in achieving intended outputs and outcomes; and (iv) measurement of the impact (i.e. effectiveness) of the policy mix on the private sector's innovation and productivity performance.