Indonesia to Become The ASEAN’s Biggest Digital Economy Country

   

Indonesia has the potential to become the biggest digital economy country in Southeast Asia, both on manufacture and retail industry. Google and Temasek which are the foreign investors in Indonesia, emphasized it through a study about the digital economy in ASEAN.

The rapid growth of internet user’s population becomes one of the reasons why Indonesia is in the spotlight on the study carried by Google and Temasek. Based on the study, Indonesia has an enhancement in the internet user population about 19% per year. There is possibility that the internet user in Indonesia will reach 215 million people before 2020.

Aside from the high growth of the internet user, Indonesia also has a significant growth in online market or e-commerce. Currently, the percentage of e-commerce transaction in Indonesia is high about 36%. Estimated, before 2025, e-commerce in Indonesia would reach to US$ 81 billion. Digital economy in Indonesia also has a rapid development in online travel sector. The existence of online transportation services like Gojek, Uber and Grab, supports Indonesia in becoming the biggest online travel market in Southeast Asia. The online travel growth in Indonesia is estimated will increase about 22% per year, from US$ 800 million in 2015 to US$ 5,6 billion in 2025.

The Google and Temasek’s study also underline the aspects that need to be done for Indonesia to explore the potentials in digital economy sector. For examples are the enhancement of internet network quality and the logistic infrastructure improvement, online payment mechanism improvement, and building a stronger trust with the customers. However, the most important aspect is to have the human resources with the right skills. Google Indonesia CEO, Tony Kuesgen, said that having the human resources with eloquent understanding about digital economy can reveal the big potential of Indonesia to become the biggest digital economy in Southeast Asia. The study also reveal that Indonesia as the country that has more than 2000 startup business, requires funding of US$ 20 billion from foreign or local investment to increase the digital economy sector.

Realizing the Indonesia’s potency in digital economy sector, the President of Indonesia, Joko Widodo, continually strive to improve the telecommunication infrastructure quality in business Indonesia. He describe that the quality improvement is necessary to accelerate many innovation in information and technology to support Indonesia in becoming the biggest digital economy in ASEAN.

The adoption of 4G technology is one of the efforts to fulfill the ambition. In the state and financial notes of RAPBN 2017 speech in the National Parliaments Building, last August, Joko Widodo state that the government has activated the 4G technology supported by Palapa Ring network which was established in 2015 to reach the 400 district/town through optical fiber.

Joko Widodo also revealed that this year the government is focusing on the development of three breakthrough steps, which are reduce poverty, unemployment, and social imbalances and inequality. These three steps are needed to accelerate the infrastructure development of any industry or sector, including industrial manufacturing. Source : BKPM