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Digital economy: Technology in Indonesia

2017-09-07 09:00:32


Indonesian entrepreneurs in far-flung islands can summon a postman to help them sell products over the Internet under a government scheme aimed at getting at least two million small businesses trading online by 2019.

Lis Sutjiati, a special advisor to Indonesia’s information minister, told a workshop organised by the Fiscal Policy Office on July 27th that she had been dismayed by the state of the sprawling state-run postal service.

“It was like a dying elephant, but we couldn’t shoot it.”

Instead, the government enlisted the help of PT Pos’s 30,000 workers, spread across the archipelago’s 17,000-odd islands, to raise the value of e-commerce transactions to $130 billion by 2020.

This was one of the examples of how digital technology is upending the economy discussed at the full-day workshop, supported by AIPEG, and attended by around 100 officials from the finance ministry and other government agencies.

The workshop set the stage for a large conference to be held in Bali this December where Indonesian policymakers will mix with global experts to discuss how to regulate the digital economy.

Mobile Internet, cloud computing and other digital technology could boost Indonesia’s economy by around $150 billion over the next decade, according to McKinsey, a consulting firm.

Indonesia is already the world’s fastest-growing market for people using a smartphone to purchase goods. One-third of the population buy goods via smartphone each month.

But Ngakan Timur Antara, Indonesia’s deputy industry minister, said that only a small number of companies have so far adopted automation and other “Industry 4.0” technologies.

The country could compete in a digital world but the government would also have to consider what to do about workers displaced by new technologies, he said.

Laksana Handoko, from the Indonesian Institute of Sciences, stressed that the pace of technological change meant the government should not seek to prioritise particular industries. Instead it should create an environment that promotes innovation.

“Nothing is predictable,” he said.