Jakarta, INTI - In a fast-evolving digital landscape, the importance of data sovereignty for national interests has never been greater. For Indonesia, a burgeoning digital powerhouse in Southeast Asia, the call for on-shoring data regulations reflects a proactive stance on protecting personal data, enhancing cybersecurity, and strengthening its appeal as a data hub for the region.
The Rationale Behind On-Shoring Data Regulations
On-shoring data regulations require data generated within a country to be stored and processed domestically. Such policies are designed to protect privacy, national security, and economic interests, ensuring data remains under the control of local authorities. Indonesia’s alignment with this regulatory approach aims to promote data sovereignty, fostering a safer and more resilient digital ecosystem.
Countries across Southeast Asia and beyond have introduced data localization measures to protect their digital environments. Vietnam, Malaysia, Australia, and the EU have enacted policies that attract investments and support data infrastructure development. Indonesia has the opportunity to follow suit, establishing itself as a prime digital destination.
Indonesia’s Digital Growth: A Competitive Landscape
Indonesia’s digital ecosystem has been expanding rapidly, as evidenced by a 2024 report from "We Are Social." With 65% of the population—over 185 million people—now online, Indonesia's digital potential is unrivaled in the region. Countries like Singapore and Malaysia have higher internet penetration rates but lack Indonesia's large user base, presenting an opportunity for Indonesia to scale its digital infrastructure significantly.
Data centers are key to supporting this growth. Indonesia's projected capacity for data center development stands at approximately 1.2 GW. However, neighboring Malaysia’s planned capacity of 2.9 GW poses a competitive challenge, underscoring the need for Indonesia to create an appealing regulatory and economic environment to attract foreign investments.
Learning from International Examples
Countries implementing on-shoring data policies offer valuable insights into potential benefits:
These cases demonstrate how data localization policies can stimulate economic growth, foster local expertise, and enhance national security.
Reinforcing Indonesia’s Digital Sovereignty
IDPRO, Indonesia's Association of Data Center Providers, advocates for enhanced data sovereignty through on-shoring regulations. Such policies would ensure that sensitive information stays within Indonesia’s borders. To support this vision, several strategies could be pursued:
Building Indonesia’s Data Sovereignty
By instituting on-shoring data regulations, Indonesia stands to enhance its digital sovereignty, drive economic growth, and attract investment into its digital infrastructure. Countries like Vietnam, Malaysia, Australia, and the EU demonstrate how data localization policies can provide a secure foundation for innovation, economic expansion, and job creation. With the right framework, Indonesia can unlock new growth opportunities within its IT sector, fostering a resilient digital landscape for future generations.
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