Digital Transformation: Indonesia Heading Towards the Era of Artificial Intelligence

Jakarta, INTI - With a population of over 270 million, Indonesia is a highly potential market for new technology development, including Artificial Intelligence (AI). According to the 2023 Datareportal report, Indonesia has 212 million internet users with an internet penetration of 77%, 167 million social media users, and 353 million active mobile connections. The utilization of AI in Indonesia is expected to significantly contribute to national GDP growth, with projections reaching USD366 billion or 12% of total GDP by 2030.

Coordinating Minister for Economic Affairs, Airlangga Hartarto, in his keynote speech delivered online at the National Symposium: Launch of the AI Transformation Policy Manifesto, organized by Bisnis Indonesia and ELSAM on Tuesday (08/20), emphasized the importance of AI in Indonesia's economy. “Indonesia currently ranks 6th in the world with the largest number of start-ups, totaling 2,646, with 15 Unicorns and 2 Decacorns. This indicates that Indonesia is ready to become a major player in the era of Artificial Intelligence,” he said.

Globally, AI adoption in the industrial sector has reached 56%, and generative AI is projected to contribute USD4.4 trillion annually to the global economy. However, in the 2023 Global AI Index, Indonesia is still ranked 46th out of 62 countries. The main challenge faced by Indonesia in AI development is the limitation of digital infrastructure, especially uneven internet access outside Java.

The Indonesian government has made various efforts to address this challenge, one of which is the construction of the 12,100 km Palapa Ring fiber optic network connecting 57 regencies/cities across Indonesia. Additionally, the government has built Base Transceiver Stations (BTS) in 1,600 locations throughout Indonesia and launched the SATRIA-1 multifunction satellite to enhance digital connectivity. The government's plan to build data centers in Batam, the Nusantara Capital City (IKN), and Greater Jakarta is also expected to strengthen the national digital infrastructure.

Indonesia is projected to need 9 million skilled IT workers by 2030 to support digital transformation. Although the number of ICT graduates continues to increase, the demand for IT talent is growing faster than the supply of talent. Therefore, the government is promoting digital talent development initiatives through the “Indonesia Becomes More Digitally Capable” program aimed at enhancing digital literacy in society.

The digital training themes provided by the government are tailored to the current industry needs, such as Big Data Analysis, Cybersecurity, Internet of Things, Cloud Computing, AI, Augmented Reality, Virtual Reality, Machine Learning, and Digital Entrepreneurship. This program is carried out in collaboration with various universities and national and international companies to produce digital talent that is globally competitive.

To support AI development in Indonesia, the government has launched the 2020-2045 National Artificial Intelligence Strategy as a guide for AI policy development. This strategy is expected to guide the development of AI technology that is balanced, ethical, and responsible. Additionally, the government has issued a Circular on Artificial Intelligence Ethics to ensure that AI technology is used wisely and does not have negative impacts.

The government also ensures continued support for digital transformation through the thematic budget “Infrastructure Development in Driving Economic Growth” allocated in the 2025 State Budget at IDR 400.3 trillion. This budget includes providing internet access at 36,830 public service locations and operating the SATRIA-1 multifunction satellite with a capacity of 150 Gbps.

Concluding his speech, Minister Airlangga expressed his appreciation to Bisnis Indonesia Group and ELSAM for initiating this event, in line with the government's efforts to increase AI utilization for the nation's welfare. The support of the government and various parties for AI development will be a key factor in bringing Indonesia towards a more advanced and inclusive artificial intelligence era.