In 1993, Douglass C. North and Robert W. Fogel won the Nobel Prize for a simple truth people often forget: technology doesn’t drive an economy by itself. The institutions do. It is the incentives, governance, and quiet frictions like permits and uncertainty that shape the landscape.

These factors are what determine which businesses flourish and which ones remain stuck. Businesses know this in their bones. Investors don’t ask first, “Is the resource great?” They ask, “Is the tariff stable? Is the contract credible? Will the permits take months or years? Who carries the risk?” When those answers are fuzzy, capital stays on the sidelines.

After the 1992 Earth Summit, many countries didn’t wait. They rewired their systems so clean energy could actually happen. Indonesia waited longer and the data reads like the invoice.

Indonesia’s modern renewable share in final energy consumption (SDG 7.2) fell from 15.7% in 1990 to 7.0% in 2012. That drop wasn’t about a lack of sun or heat under our feet. It was about missing certainty above ground.

Between 2007 and 2017, the “rules of the game” finally started to take shape: Energy Law 30/2007, Geothermal Law 21/2014, key government regulations on conservation and national energy policy, and the creation of the renewable energy directorate.

You can’t deny it, the share doubled, 7.0% in 2012 to 14.0% in 2022. Still, it’s hard to celebrate when you know the pace we actually need.

The harder question is what we do next. If we’re serious about National Energy Plan and want Net-Zero Emissions 2060 to sound like a plan, not a slogan, then we need to stop living with half-built rules. Finishing the New and Renewable Energy Bill is one of the cleanest ways to turn “hope” into certainty.

Businesses don’t fear intense competition, they fear uncertainty. Without institutions that guarantee the rules of the game, capital won’t come, and ideas will never become reality.