How digital is helping to accelerate Indonesia’s development

Indonesia’s quiet economic progress is showing signs of throwing up another tale of digital acceleration.

India, for example, gets a lot of attention for its IT expertise and profile of its citizens in everything from Netscape to UNISYS. Yet on one critical innovation factor – mobility – Indonesia is well ahead of India. India’s 3G/4G is barely into double digit percent of population, while Indonesia is already well over 50 per cent. 

Right now, 3G is widely available at low capacities and generally strong in all cities and adjacent areas. In fact I have just been in a small farming community about 200km from Bandung where at least half a dozen of the women in a meeting had smartphones. At this stage, 4G is rolled out in the biggest cities and is making its way around the country. At Malabar, about 220 km from Bandung,I found last week that the national carrier has initiated 4G services. 

A key factor in Indonesia’s rollout is price. Indonesian data charges are among the lowest in the world. One result of that – according to the WEF-INSEAD annual global IT report – is a high ranking for business usage of digital services. WEF ranks Indonesia highly for B2C activity, skills training and innovation. And it ranks Indonesia 17th in the world for venture capital availability. 

Put all that together with an economy on a steady track of growth, an improving political and policy environment and a strong takeup nationally of first generation mobile phones – and you have the makings of something.

Advantaged by a language that adapts well to English and a solid, progressive educational system, the evidence of Indonesia’s  adoption and adaption is everywhere. 

Drawbacks are primarily in income distribution – a large part of the population is poor – and infrastructure. Power generation capacity is challenged and basic server infrastructure is stretched. Bu everywhere there are people doing interesting things – teachers who manage whole programs on Facebook, small rural businesses co-operating in e-commerce and some earlier signs of innovation about the biggest gap, which is content creation for Indonesian audiences.

In fact one of the fascinating evidences of planned innovation is in Indonesian TV. After Hollywood, the most popular TV is Korean – the direct result of that country’s strategic commitment to IT and IP more than a decade ago.

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About the author

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Michael Gill is Principal Advisor with ChangePond Technologies and Counsellor with global business advisory firm Dragoman. 

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