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Tech Hubs Planned in Indonesia

Image credits: www.dailyadvent.com/news

Creating an internationally recognised and sought after tech hub is central to President Joko Widodo’s vision of ushering in a fourth industrial revolution built on advanced technology and human resources in time for 2045 when the country will celebrate 100 years of independence.

Indonesia’s new capital city would be modelled on Silicon Valley, functioning as a hub for digital and tech industries as well as housing the government. It will be completed in 11 years and will focus on the manufacturing of unmanned aircraft and nano-satellites.

President Joko Widodo made the appeal to reform the country’s science and technology policy at this opportune time. The National Research and Innovation Agency (BRIN) was recently restructured as an independent state body, and the technology ministry was incorporated into the Ministry of Education, Culture, Research, and Technology. In the first phase of three years, infrastructure such as tollways, water and electricity systems and earthquake-proof buildings would be built.

In Sukabumi, West Java, the Bukit Algoritma (Algorithm Hill) megaproject embodies the same concept. An Indonesian politician from the Democratic Party of Struggle (PDI-P) is leading this project.   The ambitious initiative aspires to be a hub of research in neuroscience, nanotechnology, quantum technology, solar cell technology, and space exploration, similar to Silicon Valley located in California. The project is expected to take 11 years to complete starting this year.

If the government and private sector want to turn Bukit Algoritma into a science and technology industrial zone, they need to come up with a specific industry to cultivate, possibly by utilising the existing oil palm plantations. This could lead to a regional vision of creating renewable energy and other derivative products in order to support a zero-waste industry.

Technology developers should be placed in the hub so that innovations could be made between them, especially start-ups. Such strategic steps would encourage and hasten the development of start-ups. However, a single technology centre, even as large as Silicon Valley, will not be enough to meet markets throughout Indonesia, which is an archipelago.

Indonesia’s objective of becoming a technological centre in Southeast Asia faces numerous challenges. Besides Indonesia’s progress in each of its disruptive technologies, the country still has a long way to go. Foreign investment is constrained, there are skills shortages, and the financial system is still developing. Better IT innovation and agility, as well as product and service innovation, are other success drivers.

Nonetheless, Indonesia is poised to become one of the world’s most important digital economic powerhouses, and 5G will be essential not just in accomplishing this aim but also in unlocking digital opportunities and growth. According to an article from OpenGov Asia, the Association of Indonesian Cellular Operators (ATSI) is now working on establishing its first 5G coverage by 2023, with major cities and tourist attractions expected to be among the first to adopt the technology. ATSI plans to perform frequency auctions next year in order to set up 5G networks in 2022.

Despite Indonesians massive growth, the country is dwarfed by the neighbouring Asia and South East Asia countries. India and China have massive investments from domestic and international sources with a huge skilled employee force and significant tech head-starts. Malaysia and Singapore are far more advanced economies, well along with their digital paths. Additionally, India, Malaysia and Singapore have a language advantage as English is the widely spoken and the medium of instruction in higher learning institutions and in business.

However, digital transformers in Indonesia have already seen benefits for their efforts, particularly in areas of digital experiences and digital operations. Indonesian firms successful in their digital transformation report improved operational efficiency and most often as reasons for success. This will serve as a beacon for others.

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