India and China get the plaudits, but Indonesia is also taking impressive digital strides capitalising on local talent.
ASEAN is the fastest growing Internet market in the world. With 125,000 new users coming onto the Internet every day, the ASEAN digital economy is projected to grow significantly, adding an estimated $1 trillion to regional GDP over the next ten years.
Indonesia has made enormous strides in digitalisation. Yet, when people hear about digital success in the emerging world, the conversation turns mostly to India and China. Indonesia is unlikely to get a mention, or at most only in passing.
This is more than a shame – it is a missed opportunity. If the future is digital, then there needs to be greater attention on the lessons emerging from a much wider set of countries.
Indonesia’s digital success is one such example, especially for developing countries looking to tap the benefits of digitalisation for growth and development.
Unlike India and China, Indonesia did not have the benefit of an already established tech sector, an especially dynamic business tradition more generally, or leading universities and technical research institutes. Nor has Indonesia been known for particularly innovative government programs.
But in the digital age, Indonesia is thriving – offering potential lessons for other countries that find themselves in a similar starting position. Indonesia has produced its own multi-billion-dollar tech platforms, a home-grown “super-app”, and numerous tech startups. It has one of the fastest-growing e-commerce markets in the world, on track to reach $360 billion in value by 2030.
By one estimate, Indonesia ranks sixth in the world in terms of the number of startups with about 2,500 in 2023. Indonesia has also used digitalisation to accelerate inclusive development, reaching the poor with better-targeted social assistance, national identification programs, and financial services.
What were initially local start-ups have now become billion-dollar companies that continue to grow. Bukalapak went public on the Indonesia Stock Exchange (IDX) with a valuation of $7.5 billion in 2021. GOTO, a merger of Gojek and Tokopedia, has a valuation of about $30 billion and went public in 2022. GOTO’s net revenue in the first quarter of 2023 increased by 123 per cent compared to the same period in 2022. Bukalapak’s revenue increased by 28 per cent. Gojek has 2.7 million driver-partners. By comparison, Uber has 5.4 million drivers worldwide.