Digital Economy
From The Report: Indonesia 2024
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Digital technologies play a crucial role in Indonesia’s burgeoning economy, driven by a competitive telecommunications sector and rapid growth in financial technology and e-commerce. The Covid-19 pandemic significantly accelerated the migration of business operations, education and social interactions online, highlighting the importance of digital infrastructure. Indonesia’s young population and the government’s emphasis on integrating digital skills into the education system offer substantial opportunities for further expansion in the digital economy. The government is also focused on modernising the economy by attracting increased private and foreign investment in advanced manufacturing, renewable energy and smart cities. However, achieving these goals requires addressing various regulatory, geographical and socio-economic challenges.

Amid these hurdles, Indonesia’s government has been proactive in updating digital policies to enhance protections for consumers, businesses and investors. Issues such as high spectrum costs, uneven infrastructure distribution and low-quality service delivery in underserved areas need to be tackled. Nevertheless, these challenges present significant opportunities for growth and investment. Recent changes to the country’s business and investment laws are expected to create a more favourable environment for international investors, further bolstering the country’s digital sector and overall economic development.

This chapter contains an interview with Kusumo Martanto, CEO and co-founder of Blibli.

Articles from this Chapter

Overview

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The ubiquitous presence of digital technologies in global economic activity means that they are expected to remain a key part of Indonesia’s economy, which is growing at a rapid pace (see Economy chapter). A large and competitive telecommunications market, and robust growth in financial technology (fintech) uptake and e-commerce activity, are driving growth in the digital economy. In addition, the Covid-19 pandemic saw business activity, education and social interaction migrate online. A young population and the government’s focus on integrating the development of digital skills into education present opportunities for expansion. Other government…

Interview

Innovative services: Kusumo Martanto, CEO and co-founder, Blibli, on trends shaping the future of the e-commerce landscape
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Interview: Kusumo Martanto, CEO and co-founder, Blibli What is your assessment of the current status of Indonesia’s digital economy? KUSUMO MARTANTO: The digital economy of Indonesia is flourishing and stands out on a global scale, buoyed by its stable and optimistic economic trajectory, as forecast by the World Bank, with predictions of sustained growth extending through 2026. The country has taken a proactive stance towards the digital economy, exemplified by its leadership in initiating the…

Analysis

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Sustained GDP growth, supportive government policies and regulations, and increased interest from private equity and venture capital (VC) investors have contributed to robust mergers and acquisitions (M&A) activity in Indonesia in recent years. The year 2021 was a landmark one for such deals in Indonesia, with a record total value of $26bn from 147 deals. Amid global high interest rates and economic volatility, the value of M&A deals in Indonesia dropped to $22.9bn across 215 deals in 2022 and $14.36bn from 154 deals in 2023. The total number of Indonesia’s M&A deals remains comparable to pre-Covid-19 pandemic levels, although the…