Indonesia’s digital economy has shown remarkable progress in recent years, positioning the country as the strongest digital player in Southeast Asia. The value of Indonesia’s digital economy is predicted to reach US$360 billion by 2030, highlighting the vast potential for growth in this sector. However, to achieve this potential, there must be a clear framework for all stakeholders to follow, emphasizing the importance of equitable digitalization for the entire nation.
Equitable digital or internet access will provide all levels of society with access to useful information to increase knowledge and learn many new skills. In addition, reasonable and equitable internet access can create business opportunities and encourage the growth of Micro, Small, and Medium Enterprises (MSMEs) in Indonesia. This is the digital justice that is needed for all.
Collaboration and synergy between stakeholders are crucial in achieving Digital Justice for all Indonesian people. In the East Ventures – Digital Competitiveness Index (EV-DCI) 2023, four provinces are experiencing rapid growth in digital competitiveness thanks to their primary strategy in bridging the existing gap: Central Java, Bangka Belitung, West Kalimantan, and Jambi. These provinces have demonstrated the importance of an evenly distributed ICT infrastructure as a foundation for enabling a digital economy.
Central Java’s impressive jump in this year’s rankings (14th to 6th) has caught many attention. The main reason for this feat is Telkomsel’s upgrade from 3G to 4G/LTE network usefulness, drastically improving the internet network’s quality in Central Java. Central Java’s efforts include implementing digital-based public services, developing ICT infrastructure, forming a team to handle cybersecurity incidents, and creating millennial work units in each city/regency.
At the same time, Bangka Belitung has been making strides from 29th to 17th rank, with more villages having stronger signals than ever. This progress is because of infrastructure development and the local government’s provision of resources to MSMEs in going digital, including collaborating with JNE to build a logistics center to support the MSMEs on the island.
In West Kalimantan, the number of people accessing the internet with smartphones in 2022 has hit an all-time high. Collaborating with MSME partners, the West Kalimantan Provincial Government facilitated their participation in the UMKM Digital Platform, while ICT Volunteers organized events to socialize internet access. These efforts propelled the province’s rank from 32nd to 20th.
Jambi experienced significant digital transformation and progress within its local government systems and society, reflected in its rank change from 30th to 14th. They have implemented an Electronic-Based Government System (SPBE), conducted ICT training programs, and encouraged MSMEs to onboard digital platforms and implement non-cash payments.
From these high-performing provinces, there is a common thread that other provinces can follow: An evenly distributed ICT infrastructure is the foundation for enabling rapid digital economic growth. Through integrating systems and regulations, the digital government will encourage a digital society that is literate in technology to be more productive and promote digital business growth. Equitable digitalization, especially in tier 2 and 3 cities, is a priority for faster and more equitable growth. We see the evidence from the growth story of the four provinces above, with their cumulative efforts significantly impacting Indonesia’s digital competitiveness in 2022. Digital equity is significant for Indonesia’s digital economy to reach its enormous potential.
In EV-DCI 2023, we recommend four main areas for all stakeholders to work on, namely:
- Equitable digitization
- Strengthen business fundamentals
- Increasing collaboration
- Implement ESG and sustainability principles.
Digital equity is needed to continue to create an equal distribution of business opportunities for all business actors in all corners of Indonesia, especially for MSMEs. Strengthening business fundamentals is needed in facing increasingly high market challenges. Collaboration is mandatory to support each other in achieving a larger goal. Equally important, we must include those left behind, pay attention to the green economy, and implement sustainable principles so that the future of the next generation can be well preserved.
By David Fernando Audy, Operating Partner at East Ventures.
This article is a summary of The Jakarta Post’s article, 14 April 2023 edition, page 7.
The EV-DCI 2023 report can be downloaded at east.vc/DCI.