Indonesia's Digital Ecosystem: Driving National Economic Growth Towards the Future

Jakarta, INTI - Indonesia's digital economy and financial ecosystem have experienced rapid progress, becoming a locomotive driving national economic growth. This progress is reflected in Indonesia's achievements on a global level, such as an 11-spot rise in the World Digital Competitiveness Ranking (from 56th in 2019 to 45th in 2023), ranking 6th globally for start-ups, having the most innovative start-ups in ASEAN, and hosting 15 unicorns and 2 decacorns with global reach.

President Joko Widodo, who attended the Opening Ceremony of the Indonesia Digital Economy and Finance Festival (FEKDI) and Creative Work Indonesia (KKI) 2024 on Thursday (1/08), emphasized Indonesia's future digital opportunities. "The digital economy will grow fourfold by 2030, reaching USD210 to 360 billion. Digital payments will also grow 2.5 times by 2030, reaching USD760 billion," said the President.

Indonesia's 64 million MSMEs are expected to boost digital economy and digital payment growth. The President also stressed the importance of inclusiveness in digital transformation so that all layers of society, including MSMEs and micro-economies, should have equal access and protection. "I urge the Financial Services Authority (OJK) and Bank Indonesia (BI) to enhance the protection of people in the digital economy sector," added the President.

Coordinating Minister for Economic Affairs Airlangga Hartarto stated that Indonesia is currently the second-largest digital investment destination in ASEAN, with a value of USD21.97 billion. "Indonesian e-commerce accounts for 40% of the ASEAN market share, and in 2023 it reached USD77 billion," said Minister Airlangga.

To ensure the stability of digital economic growth, strong support and a solid foundation are needed, such as equitable digital infrastructure, excellent digital talent, support for start-ups and MSMEs, and adaptive regulations. Strengthening this foundation must also be accompanied by increasing financial inclusion to achieve the financial inclusion target of 90% by 2024.

Various programs, such as the QR Code Indonesian Standard (QRIS), continue to be promoted through the National Inclusive Finance Council. Collaborations with third parties, such as the Strive Program (Mastercard Indonesia) and Promise 2 Impact (ILO), aim to increase access to financial services. Additionally, expanding financial literacy through cooperation between the Government, BI, OJK, and industry is also being done to reach financial inclusion targets.

Minister Airlangga also revealed that the focus of digital acceleration steps includes two main areas: semiconductor downstreaming and the development of an artificial intelligence (AI) ecosystem. Indonesia has been chosen by the United States within the Indo-Pacific Economic Framework (IPEF) as one of seven priority countries for the ITSI Fund, specifically for semiconductors. Developing the AI ecosystem will enhance R&D and develop futuristic technology in several districts designated as innovation zones.

The government has also completed the National Digital Economy Strategy 2030 policy to ensure that the digital sector can gradually contribute to Indonesia's GDP, reaching 20% by 2045. At the regional level, Indonesia has agreed to develop the ASEAN Digital Economy Framework Agreement (DEFA) to advance digitization and interoperability.

"DEFA is the only digital economic cooperation agreement from any region in the world and is a model in the OECD ministerial meetings. With this program, the ASEAN economy, which is usually USD1 trillion, is expected to rise to USD2 trillion. Therefore, Indonesia's digital economy, projected to reach USD360 billion by 2030, will rise to USD600 billion," concluded Minister Airlangga.

Indonesia continues to strengthen its position in the global digital economy through inclusive and sustainable initiatives and programs. All stakeholders are expected to contribute to this collective effort, ensuring that Indonesia's digital economy can become a primary driver of national and regional economic growth.

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