| Summary: | The Life Sciences (LS) industry and biotechnology are widely recognized to be
the new wave of the knowledge-based economy after information technology,
thus creating new opportunities for varied economies. As reported by LS Cluster
Report-Global 2012, the LS industry sector is growing constantly within the three
global regions of the Americas, EMEA (Europe, the Middle East and Africa), and
the Asia Pacific.
Indonesia has more than 237 million populations and is South East Asia�s largest
economy. It has a substantial, affluent and increasingly inspirational middle class
of over 20 million. Reflecting the rising disposable incomes of the population,
Indonesia�s pharmaceutical market has seen double-digit growth since 2009 and is
anticipated to rank as the sixth largest pharmaceutical market in the region by
2016 (LS Cluster Report-Global.2012). Indonesia also becomes an attractive
market due to strongly growing consumer market, especially the middle income
segment. The high population also indicates the potential pool of labor.
The purpose of this study is to identify the relative position of Indonesia in terms
of FDI in LS industry and competitiveness. This research also determines the
location factors for LS industry. Since technological improvement and scientific
advances are significant triggers of recent economic performance, it is important
to get better understanding of this specific industry. Therefore, government and
stakeholders of Indonesia will be able to sharpen their policy instruments.
This study revealed that FDI inward in LS industry in Indonesia influenced
mainly by inflation and return on investment. On the other hand, the world model
of FDI inward affected by macro economy environment, goods market efficiency,
labor market efficiency and market size.
The research revealed that based on LS sectors
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