Coordinating Minister Airlangga: Digital Economy Development In Indonesia, Not Only Targeting Market But Must Be A Global Player

Coordinating Minister for the Economy, Airlangga Hartarto. (Photo: Doc. Setkab)

JAKARTA - The COVID-19 pandemic has changed the global economic landscape towards a new economic order by accelerating the adoption of digital technology in various aspects of people's socio-economic life, including in Indonesia.

Studies from Google, Temasek, and Bain & Co. stated that 41.9 percent of the total ASEAN digital economy transactions came from Indonesia. The value of Indonesia's digital economy in 2020 reached 44 billion US dollars, which means it grew 11 percent from 2019 and contributed 9.5 percent to Indonesia's GDP.

"Indonesia's digital economy opportunities are still wide open. The digital economy is a new economic force and Indonesia must develop Artificial Intelligence (AI). AI is the 'new gold' which is expected to be able to synergize various situations and various stakeholders in collaborative cooperation between the Government, business actors, and other stakeholders," said Coordinating Minister for Economic Affairs Airlangga Hartarto at the AI Innovation Summit 2021 virtually on Wednesday, November 10.

The great opportunity for Indonesia's digital economy is supported by a number of factors. Indonesia is a country that has the 4th largest total population in the world with a population of productive age reaching more than 191 million or 70.7 percent and most of them are Generation Z and Millennial Generation.

In terms of digital users, the number of Indonesian mobile phone users currently reaches 345.3 million with an internet penetration of 73.7 percent and internet traffic which has increased by 20 percent throughout 2020.

The edutech sector, which is a newcomer, also appears to fill the landscape of Indonesia's digital economy and has active users who grew significantly by 200 percent in 2020. The increase in active users also occurred in the healthtech sector. Currently, there has also been a wave of new technologies such as 5G networks, IoT, blockchain, artificial intelligence, and cloud computing.

"The transaction value of Indonesia's digital economy is projected to reach 124 billion US dollars by 2025. From this huge potential, business actors, scientists, researchers, students, and all stakeholders of digital economy development are expected to be able to take advantage of opportunities to develop digitalization more broadly. Not only as a target market foreign countries but also to become players to be reckoned with at the global level," said Coordinating Minister Airlangga.

President Joko Widodo has given direction in Indonesia's digital transformation towards Indonesia's Vision 2045 which expressly states that digital sovereignty and independence must be an important principle in digital transformation. To realize the digital transformation which is an important agenda for Indonesia, the Government has compiled a Roadmap for Digital Indonesia 2021-2024 which is expected to accelerate and increase the use and development of digital technology.

Coordinating Minister Airlangga said that with the roadmap, it is hoped that in 2024 there will be an increase in GDP growth of 1 percent and the digitization of MSMEs can reach 50 percent. In addition, 2.5 million new jobs can be created and 600.000 new digital talents are trained every year.

This is expected to create added value for the economy, especially technology enablers such as drones and robots, unmanned cars, 3D printing, artificial intelligence, big data analysis, cloud computing, and other technologies.

"Various challenges in optimizing the digital economy and AI must be resolved, including infrastructure, human resources, digital literacy, regulations that must adjust, and a more conducive business climate," concluded Coordinating Minister Airlangga.