Digital Transformation Becomes the Main Mainstay to Face the Economic Slowdown in 2023

Digital Industry Forecast (DIECAST) 2023 held by Techbiz Indonesia. (photo: dock. Techbiz Indonesia)

JAKARTA - In facing the global economic slowdown that is predicted to occur in 2023, early anticipation is needed, one of which is digital transformation.

Delivered by INDEF Economist, Nailul Huda, digital transformation is believed to be a solution for the business world in facing the threat of an economic slowdown.

The impact of the economic slowdown, according to Nailul, will be felt by all industries, including the digital industry in the country. This also makes optimism for expectations of Gross Merchandise Value (GMV) decrease in 2025.

"The 2021 and 2022 reports that I took from data released by Google, Temasek and Bain state that the potential GMV in 2025 will reach USD 146 billion (equivalent to IDR 2.260 trillion). However, in 2022 it will decrease to USD 130 billion (equivalent to IDR 2.260 trillion)," said Nailul at the 2023 Digital Industry Forecast (DIECAST) event held by Techbiz Indonesia, December 5.

Nailul also stated that the highest investment in the digital sector was indeed in Singapore and second was Indonesia. But in 2022, the percentage of Indonesia's digital economy investment destinations will decrease.

Likewise with what was disclosed by ZOHO Indonesia's Country Lead, Handito Saroso, according to him, investment in technology is really needed by companies when experiencing difficult conditions, instead of reducing the use of technology.

"Because when they invest in technology, there are many benefits, such as cost efficiency," said Handito.

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The IDC Future Enterprise Resiliency & Spending 2022 – Wave 5 (2022) survey also revealed that more than 60 percent of organizations in Indonesia, Malaysia, and Singapore have made digital infrastructure resilience programs a high priority following uncertainties due to geopolitical tensions, inflation, supply chain disruptions, and ongoing COVID-19 pandemic.

Meanwhile, the growth of the technology business itself, Handito said, is still very good. Based on Gartner data, global digital business growth has grown by 5 percent.

Meanwhile, in Indonesia, digital business can still grow by double digits. Facing this economic slowdown, Handito explained, the first thing that must be done by the business world is to redefine their business direction and business priorities.

"Many digital companies are reconditioning their business to improve their fundamentals. So when the market rises again they are much better prepared and they have a longer runway," said Handito.

Second, Handito continued, business people must increase the growth of their technology implementation in areas that are currently not digitized. For companies that are already quite well-established technologically, they must continue to make improvements.

Like using newer technology so that it can help them run more efficiently or substituting the technology they use with one that is more affordable, but functionally still the same as what they have now.

The general chairman of the Telematics Society (MASTEL) Sarwoto Atmosutarno also conveyed the same thing, emphasizing that digital transformation must accelerate its growth so that the Gross Domestic Product (GDP) of the digital sector can increase.

Currently, the share of Indonesia's digital GDP is approximately 5.5 percent, while the market value of GDP (OECD benchmark is 30 percent), while the growth of the Computer and Electronics Industry fell 0.51 percent (BPS 2019).

To be able to realize this digitalization, Sarwoto emphasized that several steps need to be taken such as promoting new technology both in terms of access and reach and capacity.