Indonesia

ERIA - Accelerating Digital Transformation in Indonesia

Accelerating Digital Transformation in Indonesia: Technology, Market, and Policy

The Association of Southeast Asian Nations (ASEAN) and East Asia have made remarkable achievements in economic development. Whether the region can continue its rapid growth will to a great extent depend on how well it manages the digital transformation. An indepth understanding of the advantages and disadvantages of ASEAN Member States and other countries in the region will help smooth the digital transformation and unleash the development potential in the digital era. In this context, the ERIA has undertaken a series of policy-oriented research projects on the digital economy since 2016. These studies aim to provide policy suggestions for ASEAN and East Asia on how to accelerate the pace of digital transformation in the region with a balance between efficiency and inclusiveness, and in the long term, how to synchronise the interaction amongst digitalisation, competition, innovation, and human development in Asian development.

Redefining Indonesia’s Digital Economy

The Indonesian digital economy is the largest and most attractive investment
destination amongst the Association of Southeast Asian Nations (ASEAN)
Member States (AMS). The sector has grown more than fourfold in the last
4 years and has supported other sectors. Amid the exponential growth,
digital businesses are facing what is called a ‘tech winter’ in which startups are likely to experience slowdowns or even bankruptcy. In addition,
although the digital transformation helps businesses improve productivity
and drive economic growth, it has consequences for employment and
wages, particularly for less skilled workers. While the potential of the digital
economy must be continuously harnessed, some key initiatives need to be
implemented to mitigate its negative effects.