Learning, innovation and local content development: the role of government funding and policy harmonisation

Muhammad Athar Ismail Muzakir, Diana Sari and Adhi Indra Hermanu

International Journal of Innovation and Learning, 2026, vol. 40, issue 1, 1-28

Abstract: This study examines the factors which affect the local content level (TKDN) of prototypes supported by government programs. Using quantitative analysis and secondary data from 2019 across seven sectors (food, energy, ICT, military, health, transportation, and advanced materials), the paper concludes that government research funds do not significantly influence TKDN, however the cost of imported raw materials does. This study emphasises the significance of political alignment and policy alignment at the macro, sectoral, and industry levels in stimulating the development of local content. It also integrates government funding with local content goals, adopts policy insights to improve TKDN, and offers lessons learned regarding successful tactics for promoting the growth of local content-based industries. The findings assist in understanding the dynamics of TKDN in prototypes sponsored by government programs, as well as the impact of policy alignment in encouraging research downstreaming and innovation through improving local content.

Keywords: local content; industry; innovation; technology; learning; policy harmonisation. (search for similar items in EconPapers)
Date: 2026
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