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Indonesia: A Sleeping Giant?

Now that China is well established as a powerhouse in the electronics arena and India as a haven for design activity, at the last Semico staff meeting we asked the question, which country will be the next emerging economy? Growth may come in a number of different forms. China took on semiconductor manufacturing with great enthusiasm. Although India tried, their efforts to attract semiconductor manufacturing didn’t materialize. But cell phone sales to the area have been a real boost for semiconductors.  Semico has observed that in today’s market, copying the economic development successes of the last region doesn’t seem to work. The growing regions must make a mark through some unique offering. Along with China and India, Brazil and Russia have already been identified (BRIC). Which location will be next? Morry Marshall says Nigeria or South Africa. Tony Massimini says SE Asia, i.e. Vietnam or Indonesia. In the April 3-9th issue of The Economist, there’s a blog assessing Indonesia’s global impact. Indonesia has a population of 231.3 million. That puts the country in fourth place after China, India and the U.S. Brazil, who ranks fifth has a population of 193.7 million. Indonesia’s population is relatively young and well educated. In June, President Obama is expected to get a huge welcome home to this area where he spent four years growing up. I suspect the country will attract a lot more attention after that. What do you think? Nigeria? Indonesia? What country will attract infrastructure build out, consumer electronics purchases and economic development? Joanne Itow Managing Director


Joanne -- Doubt that energetic, creative industries will develop much in Indonesia -- perhaps Vietnam has a better chance. I believe that the politics are unreceptive -- there is top-down, military-dominated governance with well-connected robber barons. Geographically, the population is scattered around on a lot of islands I believe, another drawback for building a strong global infrastructure. Unless the society becomes more open and venture capital becomes more available to entrepreneurs, the growth will be in more traditional industries (and raw materials) rather than in emerging technology markets.
Just my take on it.
Bob Haavind from WaferNews/Solid State Technology

I believe that there are some criteria that a country needs to satisfy to develop economically. Some of these criteria are listed below, not necesarily in order of importance.

1. A pool of educated workers
2. Political stability (but not dictatorship)
3. Adherence to the rule of law
4. Elimination of graft and corruption
5. Availability of capital or
the poliical will and means to invest in the economy
6. Bottom-up rather than top-down development of
new businessses and ideas
7. Emancipation and education of women

As evidenced by China, development can occur if some of these criteria are not satisfied.

Indonesia is much further along toward meeting the criteria than most countries in Africa, Asia or South America.