Digitalisation to drive Indonesia’s economic growth, ADB report suggests

The value of Indonesia’s digital economy is predicted to reach USD146 billion by 2025

There are about 2,300 tech businesses in Indonesia, including 12 that have reached Unicorn status. AsiaTravel/Shutterstock

The Asian Development Bank (ADB) recently published the Asian Development Outlook (ADO) 2022 and projected Indonesia’s economy to go up by five percent in 2022 and 5.2 percent next year. This stemmed from an earlier estimation of 4.8 percent.

“The Indonesian economy briskly rebounded from the downturn in the third quarter and ended 2021 with output higher than in pre-pandemic 2019. Growth was broad-based and should strengthen in 2022 as economic activity continues to normalise,” said ADB Country Director for Indonesia Jiro Tominaga.

The report suggested that Indonesia should use digitalisation to boost productivity and growth, helping the country meet its objective of raising per-capita GDP to a high-income level by 2045. Firms will require assistance in accelerating technology transfer, increasing innovation research and development, and gaining access to a tech-savvy workforce. 

Public investment in digital infrastructure, economic incentives, and regulatory reforms are among the key policy recommendations.

Additionally, Chief Economic Minister Airlangga Hatarto said in a webinar hosted by Investor Magazine, a sister publication of the Jakarta Globe, on Thursday, that Indonesia could harness the potential of the digital economy, and that it could be a driving force in the country’s economic growth due to the massive spread of digital technologies that transform many aspects of people’s way of life.

More: Cloud computing may add $10.7 billion to Indonesia’s GDP

“The government is encouraging the use of new sources of growth to support this economic transformation. Accelerating the digital economy becomes our main strategy to transform the economy and speed up the post-Covid-19 economic recovery,” Airlangga said.

Last year, 202 million Indonesians used the internet, contributing USD70 billion to the country’s digital economy. The value of Indonesia’s digital economy is predicted to reach USD146 billion by 2025, according to Arsjad Rasjid, chairman of the Indonesian Chamber of Commerce and Industry.

There are about 2,300 tech businesses in Indonesia, including 12 that have reached Unicorn status.

The Property Report editors wrote this article. For more information, email: [email protected].

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