Supporting Indonesian Startup Potential, Erick Thohir: Jokowi Will Launch Red And White Fund

SOE Minister Erick Thohir/PHOTO VIA ANTARA

JAKARTA - Minister of State-Owned Enterprises (BUMN) Erick Thohir said President Joko Widodo (Jokowi) would launch the Merah Putih Fund next month. Later, the Merah Putih Fund will be related to investments in start-up companies or startups and unicorns from Indonesia.

"We are currently preparing the Red and White Fund, which will be launched by the President. Hopefully in the December controversy," he said at the Digital Technopreneur Fest & Socio Technopreneur Campus event, Friday, November 19.

Erick said the purpose of establishing the Merah Putih Fund was to develop the potential of startups and unicorns from Indonesia. This is because, so far, more of the funding has been injected by foreign investors.

Therefore, Erick Thohir wants state-owned companies to invest in startups and unicorns made by the nation's children. However, he said, it must be accompanied by good investment governance.

"The potential of our unicorns is still very large. But so far we have always complained that our unicorns are foreign investment. And we are angry. In fact, we ourselves have never intervened in this digital activity. That's why we launched the Merah Putih Fund," he said.

Erick explained that there are three standards set for startups or unicorns to be able to get funding from the Merah Putih Fund. The condition is that the founder is an Indonesian, the company operates in Indonesia and enters the Indonesian capital market.

"Going public must be in Indonesia, not going public in Singapore," he explained.

Meanwhile, the Minister of Trade Muhammad Lufti also emphasized the importance of the role of the digital economy for the Indonesian economy. Currently, Indonesia's economy in terms of GDP is around Rp. 15,400 trillion or equivalent to US$1.1 trillion.

Lutfi said that by 2030, the Indonesian economy is projected to grow about 1.5 times to IDR 24,000 trillion to IDR 30,000 trillion. Where exposure from the digital economy will grow from Rp. 632 trillion to Rp. 4,531 trillion.

"The portion of our digital economy will grow by around 800 percent in the next nine years from Rp. 632 trillion today to around Rp. 4,500 trillion," said Lutfi.

According to Lutfi, Indonesia's digital economy sector will be filled by three sub-sectors that play a strategic role. First, e-commerce whose value will be around IDR 1,900 trillion in 2030.

Second, educational technology (edutech) whose value is projected to reach Rp160 trillion. Lutfi said, the edutech sector is very important to shape Indonesia's golden generation in the future.

According to Lutfi, the digital sector must be able to increase the level of education and qualifications of the education level of workers in Indonesia.

As an illustration, he said, 25 million elementary school students were accepted but only 10 million students graduated from high school. Thus, there are 15 million lost in emissions.

Lastly, digital technology in health services (healthtech) whose value is estimated to reach IDR 476 trillion. Lutfi said that every single doctor who graduated at this time had to take care of 600 new patients.

"So there must be good technology to be able to provide services to our younger generation of doctors," he said.