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Indonesia: Digital Economy Opportunities

President Joko Widodo gave clear instructions to capitalize on the digital transformation momentum brought about by the COVID-19 pandemic.  In response, the Government of Indonesia through the Ministry of Communication and Informatics (Kominfo) announced the digital roadmap for 2021-2024, intended to accelerate Indonesia’s digital transformation agenda.  The roadmap focuses on four strategic sectors:

Digital Infrastructure
Indonesia’ existing digital infrastructure includes 224,573 km of terrestrial and 123,869 km of subsea fiberoptic backbone, 559,020 base transceiver stations, and five Gbps of satellite capacity consisting of 5 national commercial telecommunication satellites and four foreign communications satellites under lease.

Infrastructure is recognized as a key enabler for digital transformation in Indonesia, and the government has identified specific ICT Infrastructure development priorities including the completion of 4G infrastructure in more than 10,000 subregions by 2022. Kominfo also expects to deploy a High Throughput Multifunction Satellite (SATRIA-1) with a capacity of 150 Gpbs which will provide internet access to 150,000 public facilities by 2021, farming and re-farming of spectrum to improve the efficiency of radio frequency spectrum allocation and develop 5G network, establishment of the National Data Center, and the development of a telecommunication monitoring center to monitor the quality of experience (QoE) and quality of services (QoS) in 514 cities and regions throughout Indonesia.  

Further, the development of ICT Infrastructure to support digital transformation is identified as a major project in the country’s national medium-term plan, (RPJMN 2020-2024).  The estimated budget required is IDR 435.2 Trillion (USD 31.1 Billion), for which 98% of the financing is targeted to be mobilized from the private sector.

Digital Government
In 2018, the government published Presidential Regulation 95/2018 which sets out the provision of an eGovernment system (Sistem Pemerintahan Berbasis Elektronik/SPBE).  The regulation includes the development of a masterplan for eGovernment system that focuses on several areas including budget planning, business process, data and information, eGovernment infrastructure, eGovernment applications, eGovernment security, and eGovernment services. 

Indonesia is also in the process of consolidating and integrating various government data under the One Data Indonesia (Satu Data Indonesia/SDI) initiative.  This initiative is formalized by Presidential Regulation 39/2019 and aims to create quality and accessible data, that can be shared across the central and regional agencies. 

Digital Economy
A recent study by Google, Temasek and Bain & Company projected Indonesia’s Digital Economy to exceed USD 124 Billion by the end of 2025.  With grow last year of nearly 11%, Indonesia is well on the way to becoming a major contributor to the global digital economy. 

The Indonesia government is focusing on the digital onboarding of more than 64 million micro, small and medium enterprises (MSMEs) across the country, encouraging them to ‘Go Digital and Go Global’.  The government is targeting 30 million MSMEs to go digital by 2024.

Indonesia is also looking to foster a start-up ecosystem, and the government has launched initiatives such as the #1000StartupDigital movement. Indonesia holds the record for producing the greatest number of unicorns in Southeast Asia, and one ‘Decacorn’ (a startup with a valuation exceeding US$ 10 billion). The GoTo Group, recently formed by the merger of GoJek and Tokopedia, is developing a super app encompassing eGovernment, transport, education, logistics, financial services and communications.  President Jokowi is encouraging Indonesia to produce start-ups in the financial services, industrial, entertainment media (digital broadcasting), agriculture and fisheries, education, health, and real-estate/digital cities.

Digital Society
The Indonesia government recognized that digital society forms the foundation of a thriving digital economy.  The success of the nation’s digital transformation is dependent on the society’s readiness to adopt digital. In response, the government prepared a Three-Tiered (Basic, Intermediate, Advanced) Digital Talent Development approach.  The first tier aims to provide basic digital skill for the public in general.  The target is to provide 12.5 million Indonesians with trainings in basic digital skills, digital culture, digital ethics, and digital safety.  The second tier aims to provide at least 100,000 fresh graduates, technician, and professional level workers with intermediate digital skills in areas such as cloud computing, artificial intelligence, the internet of things, cybersecurity, and big data analytics.  The third tier aims to provide advance digital skill for decision makers in the public and private sectors. The government is targeting to have 300 participants trained and certified.

Several programs are initiated by the government to achieve the digital society ambition.  These includes the National Movement on Digital Literacy and the Digital Talent Scholarship.  The Digital Talent Scholarship (DTS) is a competency development training program aims to improve Indonesia’s skills, competitiveness, productivity, and professionalism.  DTS is broadly divided into eight academies: Fresh Graduate Academy (FGA), Vocational School Graduate Academy (VSGA), Thematic Academy (TA), Professional Academy (ProA), Government Transformation Academy (GTA), Digital Entrepreneurship Academy (DEA), Digital Leadership Academy (DLA), and Talent Scouting Academy (TSA).  The government is encouraging cooperation with global technology companies on this.

For more information contact Office.Jakarta@trade.gov.
 

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