Indonesia moves to support scale in growth of digital economy

• Identified seven key issues within the e-commerce industry
• Embarks on Go Digital Vision 2020 with four main targets

THE Global Venture Summit 2017 (GVS) which runs in Bali from April 19 to 21 brings local startups together with successful entrepreneurs, venture capitalist to boost the startup ecosystem.

In a panel discussion, Indonesian Ministry of Communication and Information Technology special advisory staff to Minister Lis Sutjiati (pic) says the government has to identify the main issues hindering Indonesia’s e-commerce industry.

“There are seven key issues that the government has identified in the e-commerce ecosystem in Indonesia which are education and human resources, funding, logistics, tax, communications infrastructure, consumer protection, and cyber security,” says Lis.

The government believes that to develop faster the e-commerce sector must be driven by policy.

“We learned from other countries such as the US and China that the number of e-commerce players keep increasing with the help of the government. The government has to evolve policy imperatives aligned to the dynamic nature of the digital economy,” she says.

In order to accomplish this, the seven main issues have been discussed with key agencies and stakeholders which resulted in key high-level initiatives to tackle each issue and develop the National E-commerce Roadmap (pic, below). The roadmap was developed in collaboration with more than eight ministers and government institutions to ensure sustainable growth.

 “The National E-commerce Roadmap was developed in order to achieve over US$130 billion in the value of e–commerce transactions in Indonesia by 2020,” she explains.

Lis believes that the three key players who will contribute the most in achieving the goal are the startups, SMEs, and established businesses.

“The key initiatives and recommendations should be complete by July 2018 in a practical way considering the segmentation and growth cycle of local e-commerce players.”

Go Digital Vision 2020

To support the growth of the e-commerce ecosystem as well as create a solid foundation towards becoming ‘The Digital Energy of Asia’, the Indonesian government has various programmes with specific targets in the Go Digital Vision.

Among these programmes are The National Movement of 1,000 Digital Startups, 1,000,000 Farmers and Fishermen go digital, 8,000,000 SMEs go digital as well as 187 municipalities in 3T areas (the frontier, outermost and remote regions).

The National Movement of 1,000 Digital Startups, a collaboration between KIBAR and the Indonesian Ministry of Communications and Information has begun across ten countries in Indonesia.

“We are aiming to create 200 startups every year, plan more entrepreneurships programmes and bring in more mentors from Silicon Valley or around the world,” Lis explains.

Farmers and fishermen go digital aims to encourage 1,000,000 local agriculture sector players to promote or sell their products through various online platforms or e-commerce.

“The agricultural sector has contributed 10.58% to national GDP growth and this programme can help them to increase their income too,” she says.

To Lis, every SME that goes digital will grow twice as fast as before. So, the government aims to boost the potential of SME growth by driving them into the digital ecosystem.

“Only 9% of SMEs in Indonesia are digital, and 80% of them are only familiar with the usage of social media. With this, we can see the huge potential in local SME to go digital.”

Indonesian government also continues infrastructure development in internet access and speed by providing broadband 4G LTE services and placing municipalities at over six places which are Sumatra, Kalimantan, Sulawesi, Bali, Jawa, and Nusa Tenggara Barat.

To Lis, it is important to make Indonesia’s e-commerce ecosystem conducive so it will be able to interest overseas investors in Indonesia.

“In order to boost the ecosystem, these ‘acceleration programmes’ need involvement both from the government and the people. They need to work hand-in-hand to transform it into a ‘national movement’,” she concludes.

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