The Digital Sector Brings Optimism to Indonesia's Economic Development

On the sidelines of the IMF-WB Annual Meeting some time ago in Bali, Minister of Finance Sri Mulyani conveyed many things about the results of discussions at the forum. One of them is about how digital technology plays a role in Indonesia's economic development, as well as disrupting various fields. He gave an example, how home-based businesses or SMEs can now reach markets throughout Indonesia thanks to platforms such as Bukalapak or Tokopedia. With strong financial and technological support as a platform, para unicorn provide a very real solution.

This opinion strengthens the Minister of Communication and Information, Rudiantara, through his institution he wants to support the development of digital startups more optimally. One of them is through Nexticorn, a forum that brings together startup players with potential investors from within and outside the country. Thus, the regulator agreed to direct regulations that accelerate the growth of the digital industry in the country, especially those working on the real sector such as trade, finance, education, and so on.

However, they are also well aware that the presence of technology also has bad implications. One of the issues was related to the possible loss of many jobs. For example, if you later buy goods at a store, you already use the "New Retail" concept with great experience seamless pattern digital, then workers such as cashiers are no longer needed. Especially when talking about advanced implementations of technologies such as Artificial Intelligence and the Internet of Things.

Not only regulators, but players in the digital industry are quite optimistic. This is as stated by Teddy Oetomo (CSO Bukalapak) when answering questions about Indonesia in the future. He believes that there will be many surprising things related growth in the industry, particularly with regard to the economic inclusion of the digital sector. Aldi Haryopratomo (CEO of GO-PAY & Founder of Mapan) also conveyed the same thing. He said the current collaboration, both between startups, regulators, and investors would be a good start in shaping the maturity of the digital economy in Indonesia.

"Thinking founder now it's good. Giving birth to a startup is not just to be unicorns, but focus on continuing to innovate resulting in problem solving,” said Teddy in the opening panel session at Nexticorn 2018.

Volunteer Batunanggar, OJK Commissioner, in another panel session revealed. Startups are no longer always “weak” when it comes to regulation. Because the digital startup has a unique business model, by adopting an agile and flexible strategy. It is considered that recently the authorities have issued quite a number of permits for fintech, although with fairly strict requirements.

So what about the readiness for global competition?

We may be optimistic to see the existing developments, but what must be ensured is that we must not neglect global competition. Moreover, in the era of technology, later the barriers will be increasingly blurred, innovation can not only disrupt the country of origin, but also to various parts of the world. Seeing the developing technology trends, almost every actor in the technology sector agrees that AI will dominate in the future. Many transformations will be caused by AI-based applications. So the question is, how prepared is Indonesia to face this era?

In a published data World Economic Forum, presented about the ranking of countries with the highest AI capabilities. America, China and India top the rankings. Unfortunately, Indonesia has not yet entered the big ranking described. Talent is important, because it will encourage development in the country concerned. Then to improve it, it is necessary to have good synergy between various parties, not only the industry, but also the dominant role from regulators to the academic sector.

So that up to here a conclusion can be drawn. Existing digital developments may make us very optimistic about welcoming progress – holding onto the vision of becoming digital energy of Asia – looking outside to see how far other countries have developed is also necessary. The goal is to be able to learn, identify deficiencies, and prepare themselves, so that the large digital population will not only become a market share for foreign products.