Indonesia as a platform has been patched by digital transformation to become the best version of Indonesia.
As 2020 comes to a close, let’s take some time to reflect on how this past year has shaped this country through the lens of digital players. The year 2020 has been a year filled with paradoxes, but ultimately, those in the digital industry are winners.
While everyone in the world has been physically distanced as a result of safe distancing orders and city lockdowns initiated by the government, people have been able to stay connected through the mere click of a button. Now, more than ever, it has become much easier to attend events or even gather online groups for discussion.
While the global economy has been badly hit by the pandemic and threw some countries into a recession, the digital economy has been accelerating, evidenced by tech stock soaring in global capital markets.
Digital transformation has accelerated every aspect of our lives, and Indonesians have never been in a better position to capture this momentum. Quietly, over the last decade, Indonesia has steadily built its digital infrastructure. This digital infrastructure has become the foundation of many activities that have made life possible during this pandemic.
Around 11 years ago, East Ventures took a leap of faith—we began investing in Indonesia’s future when the tech scene was still a new frontier. We moved and began supporting homegrown start-ups that shared our vision for the nation’s digital potential.
The country as a platform
75 years ago, when our founding fathers fought for the independence of Indonesia, they also successfully built one of the largest platforms in the world. They built a platform that consists of 17,491 islands, 1,331 ethnic groups that speak 718 different mother tongues, and at its birth, approximately 68 million in population.
One of the best decisions our founding fathers made was to use a single common language, Bahasa Indonesia. It has kept us connected in our diversity. In parallel to the digital world, they designed the best API (Application Programming Interface), interconnecting people from various islands that have a myriad of native dialects to form the single largest homogeneous market in Southeast Asia. Globally, Indonesia is also the fourth largest market in the world.
When the virus hit in early 2020, it was a game reset. Every country had to rework its economic outlook because the growth numbers and capacity that they forecasted became irrelevant. What remained was the country’s natural resources and the core capabilities that were built during peacetime, including its digital infrastructure and population to support that. Each country must reimagine what the world will look like post-COVID and how they will be positioned in that world.
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Once the virus is under control, Indonesia will be a step ahead of other countries, armed with its abundance of natural capital, diversity, advanced digital infrastructure, and one of the most dynamic ecosystems among Southeast Asian countries, with almost 73% internet penetration that translates to 197m+ internet users.
One of the early signs of recovery in Indonesia was seen in the rebound of the travel industry that was badly hit by the pandemic. With strict protocols set in place, it has been prime time for Indonesians to explore its abundant variety of natural tourist destinations that are accessible through short distance driving. Consumers were able to discover these destinations through an online platform and stayed connected to work via the pre-existing digital infrastructure. According to Traveloka, the number of hotel room bookings has recovered to the number of transactions pre-covid as of November 2020.
Indonesia plays a key role in the new economy of Southeast Asia and our generation is in the driver’s seat. According to the eConomy SEA 2020 report by Temasek, Google and Bain & Company, Indonesia’s digital economy is projected to reach US$124 billion in 2025—40% of Southeast Asia’s digital economy. This number has been revised over the years because the real growth continues to exceed the projection. We believe the report is a mere benchmark that Indonesia will surpass.
Like any other operating system that has undergone bug fixes and patches, Indonesia as a platform has been patched by digital transformation to become the best version of Indonesia.
This article was first published in Forbes Indonesia magazine, December 2020 edition.