At present, the knowledge discourse has become the mainstream of economic development that enables growth and economic value. Knowledge is embodied in all aspects of human life; it is indivisible from human activity of every kind. This imminent issue of the knowledge economy also challenges Indonesia as one of the developing countries in a changing world. Indonesia has followed suit where it has pronounced "vision and mission" as a first step in the national and local planning process. "Creating a Nusantara Telecommunication and Informatics Society based on K110wledge by the Year 2020" is the vision statement of the National Framework for Information Technology. The problem is few Indonesian figures provide an unsatisfactory basis for the readiness to accept a knowledge-based era. This thesis will review the policies in relation to the knowledge-based economy issued by the Indonesian government using the four pillars to support the development of the KBE, which were proposed by the OECD (2000). The four pillars are technology and innovation capabilities, education and human resources development, good governance, and ICT. The present study identifies that the vision and mission of Il1donesia, drawn clearly by the think thank board, is not enough to bring Indonesia to be a knowledge-based society, since it needs to be combined with a strong commitment from leadership and a real effort in terms of consistency and mandated legal frame work. The mind set of the knowledge economy is the utilisation of knowledge in all sectors to improve capabilities to generate value added through optimising four major frameworks of building human resources capabilities, incentive regimes and good governance, innovation, and ICT. Moreover, a national framework of linkage between government, university and industry is urgently required, in which this collaboration proves to be an effective way to attain technology transfer that will bring mutual benefit by sharing knowledge and pursuing strategic research to boost economic development.