Feature


Published: 12 Aug 2021

Minister of Trade Muhammad Lutfi revealed that Indonesia's digital economy will grow eight times by 2030. Its value, from Rp632 trillion to Rp4,531 trillion. Of all this value, e-commerce will play a very large role, reaching 34% or equivalent to Rp1,900 trillion. Other digital businesses will be contributed by online health services, online travel services, financial technology, ride hailing, and so on.

With this growth, Indonesia's digital GDP will also increase significantly. The Ministry of Trade estimates that Indonesia's digital GDP will reach 55% of the total GDP of ASEAN countries.

This Ministry of Trade project is an opportunity for the digital economy for the younger generation to take advantage of technology, especially those that can simplify people's lives, while at the same time creating jobs. This opportunity is reflected in the number of internet users in Indonesia which reached 202.6 million or 73.7% in January 2021. This number increased by 27 million (or 16%) from 2020.

The startupranking.com website notes that there are more than 2,000 startups in the country, or the 5th most in the world. Currently, market research platform CB Insights notes that Indonesia has at least seven Unicorns, after OnlinePajak's Series C funding release the news on July 2021.

Unfortunately, many startups fail before they thrive. According to a report by cbinsights.com, the main reason for startup failures is at the product-market fit stage, where the products or services offered by startups are not really needed by the consumers. In addition, mature market-fit products are also considered by investors in disbursing funds.

Apart from this, there are still many unsolved challenges to date, such as:

HR Development. The challenge in Indonesia's digital economy program is about Human Resources or HR. This is certainly a record for governments in developing countries, such as Southeast Asia, including Indonesia. In 2017, as reported by Kompas.com, Google said that in Southeast Asia, the availability of professional resources in encouraging digital economic growth was still limited.

Regulations that do not keep up with the times. Apart from human resources, another challenge is the existence of regulations and legal foundations that need to be designed to keep up with the times. The classic law which states that the law always limps along with the times can apply if the rules of the game regarding the digital economy in Indonesia are not handled optimally (investindonesia.go.id).

Those are the two challenges above that currently need to be solved by Indonesia to encourage the advancement of the digital economy in this country, so that the projections of the Ministry of Trade can be realized. Otherwise, the projection is just a mere projection. (Ruhmaya Nida Wathoni. Illustration: east.vc).