The major objective of this thesis is to provide an investigation of the role of new ideas and innovation in Indonesian economic growth, drawing heavily upon recent
theoretical and empirical literature. A survey of recent literature shows that the process of learning through the production and use of ideas is a critical element in
modern growth theory. For developing countries an important theme from the literature is the existence of 'idea-gaps' across countries and the opportunities this generates for international technology transfer. A second important theme is the social absorption capability of developing countries to effectively integrate and develop advanced country ideas.