Abstract: One indicator of the success of country's economic development is high economic growth. Several studies suggest that total factor productivity (TFP) is the main source of high economic output in developed countries. This study aims to analyze the contribution of TFP in Indonesia's economic growth and examine the various factors that affect the growth of TFP. This research uses growth accounting method to measure TFP. Our result shows that TFP growth has smallest contribution in Indonesia's economic growth that in average it only contributes 11.70% to economic growth. In particular, the share of TFP in economic grow is only 0.55%. In addition, regression results show that inflation, net exports, R & D expenditure, and education level of workers significantly affect TFP growth in Indonesia on the other hand, Foreign Direct Investment (FDI) is not significant factor affecting Indonesia TFP growth.

Key words: TFP, teknologi, FDI, anggraan litbang pemerintah