HOW CAN COUNTRIES BETTER SUPPORT PUBLIC SECTOR INNOVATION? Presented by: Minister’s Expert Staff for Institutional Affairs Ministry of National Development Planning/ National Development Planning Agency Asian Public Governance Forum (APGF) Jakarta, June 12th 2014

PRESENTATION OUTLINE CHALLENGES IN PUBLIC SECTOR’S SERVICES WHAT IS THE INNOVATION? THE EVOLUTION OF PUBLIC SECTOR INNOVATION’S APPROACHES BARRIERS TO INNOVATION WHAT GOVERNMENT OF INDONESIA DOES TO FOSTER INNOVATION IN PUBLIC SECTOR FURTHER COOPERATION TO FOSTER INNOVATION

A. CHALLENGES IN PUBLIC SECTOR’S SERVICES How to deliver improved services in better ways with tighter budgets in a risk averse culture to citizens with increasingly higher expectations. PUBLIC SECTOR

B. WHAT IS THE INNOVATION? Innovation in public sector is about creating the right environment for ideas and actions, and adopting new ways of thinking and behaviors. It can mean generating and implementing new ideas; changing or creating more effective processes or ways of doing things; or adapting to changes. It can be incremental, substantial or radical; and Innovation is all of these things, and it starts with creating the right conditions.

C. THE EVOLUTION OF PUBLIC SECTOR INNOVATION’S APPROACHES 20th Century 21st Century Ad hoc Random Silos Bureaucratic Managing human resources Running projects Administering Systematised Conscious Collaboration Entrepreneurial Building innovation capacity Co-creating solutions Leading

D. BARRIERS TO INNOVATION Leadership People and Workforce Practices Culture Communica-tion and Engagement Resources Technology The low level of commitment to innovation Technology systems of varying ages and capabilities Low quality and capacity of staff Top-down organizational structures Budget constraints Lack of communication and networking

E. WHAT GOVERNMENT OF INDONESIA DOES TO FOSTER INNOVATION IN PUBLIC SECTOR

E.1 NEED FOR INNOVATION/REFORM IN THE INDONESIAN NEXT 5-YEAR DEVELOPMENT PLAN Long Term Development Plan Mandate for Medium Term Development Plan 2015-2019: Strengthen the development in all sectors by emphasizing on achieving a competitive economy that based on eminence natural resources and quality human resources, as well as improvement on science and technology. Long Term Challenge: AVOIDING MIDDLE INCOME TRAP (MIT) (will be achieved by year 2030 if the economic growth is 6% to 8%/year) Technocratic draft of Medium Term Development Plan is important to strengthen the development foundation to avoid the MIT. AEC, BONUS DEMOGRAPHY, ASEAN POST 2015, CLIMATE CHANGE Politics, Laws, and Security Economy Social Welfare Natural Resources and Environment Regional Bureaucracy Reform Rule of Law Corruption Eradication Democracy Domestic stability Structural transformation Resilience: Food, Energy, and Water Infrastructure Innovation Quality Human Resource Poverty Equality Employment National Social Security System (SJSN) Natural Resources and Biodiversity Marine Disaster Mitigation and Climate Change Minimal Service Standards Urbanization Decentralization DELIVERY MECHANISM Funding Framework: State budget and Non-State budget Regulatory Framework Institutional Framework Comprehensive Reform Not Business as Usual (out of the box) Sustainability Integrated

E.2 PUBLIC PRIVATE PARTNERSHIP Giving opportunity for public in participating infastructure development through public-private partnerships Government provides regulation, code of conduct and management of utility reform on infrastructure development in the economic development of Indonesia

E.3 ONE STOP SERVICE/SINGLE WINDOW AND OTHER FRAMEWORK/GUIDELINES One Stop Services (OSS) organizes complete Licensing and Non-licensing procedure of investment in single office that has the authority from related technical institutions or ministries to issue the Licensing and Non-licensing documents on particular sectors: Implemented in almost region in Indonesia Established Framework of Local Government Innovation System to help local governments develop roadmap for their innovation system (Regulation of the Minister for Research and Technology and the Minister of Home Affairs No.03 Year 2012 and No. 36 Year 2012 on Strengthening Regional Innovation Systems). National Policy and Strategy on the Development of e-Government (Presidential Instruction No.03 Year 2003). Guidelines to improve the quality of public services by involving citizen participation (Minister for Administrative and Bureaucracy Reform Regulation No.13 Year 2009)

E.4 INTEGRATED REFORM ON CIVIL SERVICE No. Changes Old System New Reform 1. Career Echelon Job Grading 2. Mind set Civil service as a Job Civil service as a Profession 3. Contractual Employee Status Outsource Professional-hired 4. Career system Closed career system Open and integrated career system 5. Salary system Based on class-rank Performance-based 6. Recruitment Separated in each agencies, the process and passing grade is not standardized Integrated, competitive, open, transparent and accountable 7. Political Intervention High  Abuse of power of Head of Local Government in selecting officials Low  open selection of high-rank officials, and appointed by executive secretary 8. Training Theoretical Approach Experiential Learning Approach

E.5 THE USE OF ICT FOR PUBLIC OPENESS Computer-Assisted Test System (CAT) in civil service employee recruitment process; ICT-based government procurement system (e-procurement); Information Service System and the Electronic Licensing on Investment (SPIPISE); G2G: Government to Government G2E: Government to Employee G2B: Government to Business G2C: Government to Citizens

F. FURTHER COOPERATION TO FOSTER INNOVATION

INTERNATIONAL COOPERATION SCHEMES TO FOSTER INNOVATION 1. Common development cooperation: transferring money, technology and solutions from developed countries, mainly in the North, to developing countries, mainly in the South. This cooperation scheme can still be continued. 2. Today, development solutions come from anywhere -- North, South, East and West -- and increasingly from other developing countries. They come from countries and regions that have confronted the same issues and solved them. Developing countries can cooperate to share their solutions. This kind of cooperation needs to be fostered. 3. In the future, a forum like today, in the form of triangular cooperation involving developing and developed countries in the same stage, will be even more effective to foster innovation and to find solutions. Developed Country Developing Country Developed Country Developing Country Developing Country

Thank you Terima kasih