Diagnostic mapping of misalignment between upstream fiscal incentives and downstream public procurement in Indonesia

Indonesia's government procurement system struggles to integrate research and innovation products, hindering industrial competitiveness. This study maps Indonesia’s innovation procurement system across three linked stages: upstream R&D incentives, midstream certification, and downstream public purchasing. Using a case study approach (2021–2024), the study applies Actor–Network Theory (ANT) and Dynamic Governance (DG) to diagnose coordination failures, signaling gaps, and institutional rigidity based on procurement data, Super Tax Deduction records (a 300% R&D incentive scheme), and administrative R&D filings. To strengthen actor-level interpretation without changing the empirical basis, the analysis is also triangulated with stakeholder implementation insights documented in administrative evaluation materials and multi-stakeholder discussions (used only for mechanism illustration, not causal inference). Findings show marked underutilization of the Super Tax Deduction, with claims totaling only ~ IDR 1.46 trillion. Only 19 of 224 submitted R&D proposals were awarded incentives, equivalent to an 8.48% proposal-award share. Innovative product procurement is negligible, representing just 0.025% (IDR 277.68 billion) of domestic spending over the observed period, as shown by e-purchasing trends for transparency and consistency. Midstream, a pronounced gap exists between firms reporting R&D and those holding BMP, a local-content certification, with only 46 firms meeting both criteria, indicating systemic misalignment and weak innovation signaling. The study provides the first integrated empirical mapping of Indonesia’s incentive–certification–procurement chain and demonstrates how ANT and DG jointly explain system-wide failures. The study proposes reforms including embedding innovation baselines in certification, establishing pre-commercial procurement pathways, improving demand–supply signaling, and institutionalizing ROI measurement. Sustainability is treated as a governance-alignment and system-design issue—whether institutions enable procurement uptake of sustainability-oriented technologies—rather than a directly measured environmental outcome variable. The research offers a policy-ready framework for emerging economies seeking to translate R&D into sustainability-oriented industrial competitiveness.