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Indonesia Supports Stronger Push for Digital Transformation

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The impact of digitisation varies depending on the stage of development of an economy. It has a one-quarter greater impact on economic growth in developed economies than in developing economies. However, when compared to developing countries, developed countries experience lower employment growth.

Airlangga Hartarto, the coordinating minister for Economic Affairs, remarked in a statement that digitalisation is one of the strategies to accelerate the transition to a new economy. Digital technology, he claims, has enabled increased coordination among economic stakeholders to speed up trade, create jobs, and improve access to public services. “This momentum must be used to push the digital transformation process,” he said.

Digitalisation is a means to push for the transformation to a new economy with added value and better competitiveness.

– Airlangga Hartarto, Coordinating Minister for Economic Affairs

The Association of Southeast Asian Nations economy has surpassed $100 billion in value. According to the minister, it is expected to triple in size by 2025, reaching more than $300 billion. E-commerce has been the most significant contributor to the ASEAN digital economy, followed by transportation and food delivery, online media, and travel. Aside from that, he highlighted that healthtech and edutech have emerged into promising fields. Indonesia’s digital economy is valued at US$44 billion, the most in ASEAN, and is expected to rise eightfold by 2030.

The Minister also stated that most of the value of the digital economy has been contributed by e-commerce transactions, which are estimated to increase to US$32 billion in 2025, reflecting a growth of 54%. “The development of the digital economy in Indonesia can also be seen from the total investment in digital platforms, which is around 38.7% the largest number in Southeast Asia. Strategic sectors that are the new strengths of the digital economy include agritech, fintech, edutech and health tech.”

The acceleration of agritech can be seen in the development of one of the leading agritech start-ups in Indonesia. The development of fintech can also be seen from the distribution of peer-to-peer loans, which were recorded at US$7 billion as of March 2020. Meanwhile, the increase in the edutech sector can be seen from the growth of users, which reached 200% in 2020. Ultimately, the Minister said that the development of the health tech sector is reflected in the ever-increasing number of users of the country’s leading telehealth platform.

OpenGov Asia reported the government of Indonesia is making efforts to promote national economic recovery by speeding up digital transformation. Minister Johnny announced that the Ministry of Communication and Informatics has established a Digital Indonesia Roadmap 2021-2024 to serve as a strategic guide for the country’s digital transformation journey and aims to accelerate national digital transformation by focusing on ten strategic sectors. The 10 main priority sectors that will be focusing on include the government sector, the trade sector, the financial services sector, the industrial sector, media and entertainment, real estate and urban areas, agriculture and fisheries, transportation, education, and digital health.

One part of the roadmap that gets attention is the demand for digital talent. Minister Johnny remarked that Indonesia will require 9 million digital talents over the next 15 years to support the country’s digital transformation. According to World Bank research published in 2018, Indonesia would face a digital worker shortage of 9 million skilled and semi-skilled workers between 2015 and 2030.

This requirement comes from the rapid changes inflicted by the significant impact of the digital domain to meet the demands of the fourth industrial revolution. Numerous jobs have been rated as the most in-demand in Indonesia. Artificial intelligence experts, Big Data Analytics specialists, process and Internet of Things specialists, digital marketing specialists and renewable energy technicians, data analysis specialists, digital transformation specialists, business management analysis specialists, and business development specialists are just some of the positions available.

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