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Go-Jek cited amid limited innovations at IDB forum
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A driver from popular ride-hailing application Go-Jek drives a passenger around Hotel Indonesia traffic circle. (thejakartapost.com/Wienda Parwitasari)
Discussing innovation among less-developed countries is a challenge.
Indonesia’s finance minister chose to talk about transportation application Go-Jek to inspire the members of the Islamic Development Bank (IDB), many of which are less-developed countries, about a simple yet meaningful innovation.
Islamic finance is expected to help achieve the UN Sustainable Development Goals (SDGs). More innovation is needed to create sustainable development, but it is a great challenge as most IDB members, which have many SDG targets to achieve, are less-developed countries with limited ability to invest in research and development.
The IDB Group's board of governors chairman, Bambang Brodjonegoro, said the drive for innovation in Islamic finance should come from two elements: competition and limitation. The Indonesian finance minister said simple innovations could result in business and employment.
"In order to compete, to survive, you can come up with a simple innovation but a very powerful one," Bambang said at the IDB's 41st annual meeting in Jakarta on Wednesday.
Citing Go-Jek as example, he said the chronic congestion in the capital city had led to a simple innovation involving ojek (motorcycle taxis), to help people avoid the traffic. "[…] an Indonesian entrepreneur came up with an innovation to create an application for ojek. We call it Go-Jek, which allows you to order ojek using a cell phone," he explained.
As people responded well, Go-Jek then expanded, providing services from taxis to food delivery, Bambang told the audience. The innovation made living in Jakarta more comfortable, proving that simple innovations do not only mean good business, but also result in people's economic development.
IDB Group president Ahmad Muhamed Ali acknowledged a disparity in finding such solutions among its 57 member countries as many are less-developed countries.
He called on IDB members to catch up by innovating. "We urge member countries to provide investments in research and development and improve human resources," he said.
UNDP partnership
In a bid to support the efforts, the IDB and the United Nations Development Programme (UNDP) have signed an agreement to strengthen partnerships to support IDB members to achieve the SDGs.
They have created a joint plan of action to enhance collaboration on project development and implementation for crisis response and recovery, poverty eradication, youth employment, disaster risk reduction and tackling climate change.
According to UNDP administrator Helen Clark, innovation among IDB members required scaled-up investments in education, infrastructure, research and improved protection of intellectual property rights.
"The improvements across these areas will strengthen the foundations of innovation ecosystems in [IDB] member countries," she said during an address on leveraging innovation for sustainable development.
She acknowledged that the IDB had played a significant role in promoting and leveraging innovation, given that its member countries did not rank highly in global innovation indices. The bank had addressed barriers to innovation in its member countries, and shared best practices and knowledge on innovation.
Innovation is believed to drive the development of higher-value goods and services, productivity as well as competitiveness. "Thus innovation is vital for reaching and maintaining advanced economy status and high living standards," Helen said.
She cited an example of a UNDP program in Bosnia and Herzegovina three years ago to explore development solutions through the Open Innovation Challenges competition. Together with UK-based innovation fund NESTA, a competition was set up to design renewable and financially sustainable energy solutions for off-the-grid communities.
"Through this process, best-fit solutions were found," she said, adding that the UNDP would be delighted to work with the IDB on similar a competition to stimulate innovation in Islamic finance among its 57 member countries. (ags)
