Kemenkominfo Encourage the Growth of Indonesian Digital Talents

In the midst of the challenges of the global economic situation, the Indonesian technology industry and its startup ecosystem still have an optimistic outlook. This is because, despite a number of unpleasant news, Indonesian startups are still on a steady growth trend. In Q3 2022, DailySocial.id noted that there are 62 startups which managed to secure funding with a total value of US$983 million, with funding levels ranging from pre-seed to series A.

Behind this, the Indonesian startup industry is still facing a number of challenges, which can be said to be homework for the founders. One of the challenges in question is related to the need for quality digital talent. Indonesia is ranked 87th in the 2021 Global Innovation Index and Human Capital is one of the variables that gets the lowest rating out of the 7 existing pillars, which is ranked 91st. Then what are the right strategic steps to overcome these challenges?

The above needs certainly deserve the attention of various related parties stakeholder. One of them is the Ministry of Communication and Informatics (Kemenkominfo), which took the initiative to present solutions to develop the quality of digital talent in the country. Through various programs implemented such as the Beta School, the 1000 Digital Startup National Movement, Hub.id, and the Startup Studio which are claimed to be ongoing support to improve the quality and competitiveness of Indonesia's digital talents.

Programs initiated by Kemenkominfo has managed to provide a significant impetus. Until now, there are more than 1200 startups that have been initiated through the 1000 Startup National Movement, which is also targeted to have around 2024 startups in 150 which are expected to be successful in accelerating the development of their business scale through the Startup Studio program.

Based on the 2021 Indonesian Startup Mapping & Database from MIKTI, Indonesia has 1.190 startups of various scales spread across a number of regions starting from tier 1 to tier 4. Speaking of regions, the report "Unlocking The Next Wave Of Digital Growth: Beyond Metropolitan Indonesia" was released by Alpha JWC Ventures and Kearney in 2021 and then classify the tiering system which is measured based on crucial aspects such as per capita expenditure, population size, internet penetration, provincial GDP growth, and also population density.The report stated, based on records of a total of 514 cities, 15 cities are categorized as Metropolitan (tier 1) which includes areas such as Jabodetabek, Bandung, and Surabaya. Meanwhile, for the classification of Rising Urbanites (tier 2), there are 76 cities such as Semarang, Makassar, and also Denpasar. For the classification of tier 3 or it can be called “Slow Adopters” is said to cover 101 cities like Magela ng, Prabumulih, to Bangli. Meanwhile, 322 other cities are classified as Rigid Watchers (tier 4), such as Jepara Regency or Jayapura Regency.

Interesting predictions can be seen in the tier 2 and tier 3 regions. The report says that Indonesian second and third tier cities, such as Denpasar and Magelang, are predicted to have projected digital economic growth that can grow up to five times in the next five years. One of the driving factors is the rapid growth of startups specifically running businesses in the eCommerce sector, as well as financial technology (financing, payments, etc.).

Through the facts above, ongoing support should be preserved. One of the strongest stakeholders in this regard, namely the government, is deemed necessary to continue implementing programs and interventions aimed at accelerating the scale of digital ecosystem growth, such as support in access to capital, human resources, markets, to mentorship from experts.

In supporting these efforts, the government is currently preparing a strategic initiative through the Red and White Fund program. This initiative targets Indonesia to be able to give birth to new "unicorns" that are not only strong in terms of capital, but also have strong fundamentals and foundations to face the dynamics of the modern market in the future. The plan to launch the Red and White Fund will be launched in Q2 in 2022, as one of the government's concrete forms of strengthening the startup ecosystem in Indonesia.

In collaboration with Kemenkominfo, DS/innovate will release a report on Indonesia's Digital Ecosystem, which will provide a complete picture of the digital ecosystem in Indonesia. Look forward to the full report on DailySocial.id!