Indonesia Accelerates Digital Economy Growth: Lessons from Global Leaders and Strategic Initiatives

Jakarta, INTI – With a significant potential in the digital economy and finance, the Indonesian government is actively optimizing technology adoption to build a resilient and productive national economy. Nonetheless, Indonesia also needs to examine the successes of advanced nations such as the United States, China, Singapore, South Korea, Japan, and Germany.

These leading countries have successfully harnessed digital technologies like Artificial Intelligence (AI), IoT, Blockchain, and Semiconductors to drive substantial economic growth. Fundamentally, these nations have robust technology infrastructures, supportive government policies, and large technology firms.

Indonesia’s Digital Economy Potential

Deputy for Digital Economy, Manpower, and SMEs Rudy Salahuddin highlighted the elements Indonesia possesses to follow in the footsteps of these advanced nations and become a digital economic powerhouse in the regional arena. With a population of 270 million, Indonesia is the fourth-largest consumer market globally. The country boasts over 200 million active internet users, significant e-commerce growth, widespread smartphone adoption, and a rising digital competitiveness among provinces, supported by local infrastructure.

“We have all the necessary elements to join the ranks of advanced economies and become a major digital economic force in the region. Our large population, high internet penetration, and increasing digital engagement are crucial advantages,” said Deputy Rudy during the Casual Talk Festival Ekonomi dan Keuangan Digital Indonesia (FEKDI) and Karya Kreatif Indonesia (KKI) 2024 on Saturday (3/08).

Strategic Documents and Phased Approach

To accelerate the development of the digital economy, sustained efforts and synergy from various stakeholders are required. In 2023, the government launched several strategic documents, including Vision Indonesia Digital 2045 and the White Paper on the National Strategy for Developing Indonesia’s Digital Economy 2030. These documents are intended to guide ministries, agencies, and stakeholders in digital economic development and serve as a reference for Indonesia’s position in international forums. Indonesia also initiated the Digital Economy Framework Agreement (DEFA) to establish a global digital trade ecosystem.

The development of the digital economy will proceed in three phases: the 'prepare' phase, focusing on foundational digital improvements to ensure readiness for transformation; the 'transforms' phase, aimed at accelerating transformation to create intelligent societies and businesses; and the 'lead' phase, which involves setting standards for future technological innovations.

Target Aspirations and Key Interventions

Several aspirational targets have been set, including elevating Indonesia’s digital competitiveness to 20th place by 2045 and achieving a 20% contribution of the digital economy to GDP by the same year.

To reach these goals, interventions are needed in six main pillars of the digital economy:

1. Digital Infrastructure: Expand internet penetration, improve infrastructure quality, and enhance computing edge capabilities. This includes the Fiber Optic Palapa Ring network connecting 57 districts/cities, additional Base Transceiver Stations (BTS), and the use of the Multifunction Satellite Satria for remote areas.
2. Human Resources: Focus on formal education, workforce empowerment, and lifelong learning to ensure individuals have competitive digital skills. This includes digital skills enhancement through programs like Prakerja, vocational training, Digital Talent Scholarship, and partnerships with private sector companies such as Google, Apple, Microsoft, and Amazon.
3. Research, Innovation, and Development (R&D): Boost commitment to research and development and foster a culture of innovation. The government provides support such as Super Tax Deduction up to 300% for R&D activities.
4. Productive and Value-Added Business Ecosystem: Promote digitalization in priority economic sectors like manufacturing, trade, and agriculture.
5. Financial Inclusion: Target a financial inclusion rate of 90% by 2024 in collaboration with relevant authorities.
6. Regulatory and Policy Ecosystem: Ensure a healthy, fair regulatory environment that protects consumers and national security.

Strategic Collaborations and Future Initiatives

Deputy Rudy also mentioned the importance of sector diversification, collaboration, and innovation in achieving these targets. “Today, we are also formalizing a strategic partnership with Google Indonesia as a concrete step in our collaboration. This includes providing 500 Google Career Certificates in AI Essentials and organizing the AI Policy and Skilling Lab and AI Bootcamp. We hope these initiatives will significantly benefit the Indonesian community, especially the younger generation,” concluded Deputy Rudy.

Invitation to INTI 2024

As part of Indonesia's ongoing efforts to advance technology and innovation, we invite you to attend the Indonesia Technology and Innovation 2024 (INTI 2024) exhibition, which will be held at JI-EXPO from August 12-14, 2024. INTI 2024 is the largest technology and innovation exhibition in Indonesia, offering opportunities to learn, network, and explore the latest advancements. For more information, visit INTI 2024.