According to a new World Bank report titled “Beyond Unicorns: Harnessing Digital Technologies for Inclusion in Indonesia,” while Indonesia has one of the fastest-growing digital economies in Southeast Asia, more action is needed to ensure that all Indonesians, particularly the most vulnerable, can access various digital technologies and services and reap the benefits.
Although the pandemic’s rapid use of internet-enabled services is likely to boost the digital economy’s growth, the advantages of such progress may be unequal.
“There are a plethora of potential to employ digital technologies to improve healthcare delivery and access among the underserved, but these must be built on a foundation of dependable and interoperable data systems,” said Budi Gunadi Sadikin, Indonesia’s Minister of Health. “The pandemic has produced an unparalleled sense of urgency to make this a reality, as well as a push to accelerate digital technology adoption.”
The new research underlines three policy goals for Indonesia to harness digital technology for greater inclusivity. The first is to increase digital connectivity and provide universal access to high-quality internet through strengthening regulatory clarity regarding telecom infrastructure sharing. The second priority is to ensure that everyone benefits from the digital economy. This can be aided by improved logistics and more investment in digitally relevant skills. The third objective is to use digital technologies to improve public services, the quality of citizen-state interactions, and the digital world’s trustworthiness.
Despite advances in expanding internet access over the last decade, Indonesia’s basic connectivity gap remains a major roadblock. Almost half of the adult population still lacks access, and the gap between urban and rural connections has not lessened. In 2019, 62 percent of Indonesian adults in urban regions have access to the internet, compared to 36 percent in rural areas, compared to 20 percent and 6% in 2011. Indonesians in the top 10% of the income distribution were five times as likely as those in the poorest 10% to be connected.
Satu Kahkonen, World Bank Country Director for Indonesia and Timor-Leste, said, “Addressing the digital divide extends beyond initiatives to minimize the connectivity gap.”
“It will be critical to assist residents in developing the skills necessary to utilize digital prospects, particularly for better work opportunities. At the same time, the government must address the problems posed by regulations and the business environment in order for businesses to innovate and compete effectively.”
The percentage of Indonesian adults who have internet connections has climbed from 13% in 2011 to 51% in 2019. Indonesians who have access to the internet are among the world’s most active users, spending up to six hours per day online. Furthermore, a sizable portion of this population is prepared to ramp up its digital engagement with the government. However, data fragmentation and the untapped potential of developing a comprehensive digital ID framework based on the existing ID system are two major roadblocks to the government’s digital transformation.
Indonesians who are digitally active are now seeing how technology is reshaping their lives and economic operations, resulting in a better consumer experience. However, possibilities are frequently restricted to a specific demographic group with a greater level of skill. Digital gig work pays more than other forms of casual work, although it is primarily done by urban male employees in the transportation, storage, and communications industries.
The research calls for the creation of a national digital ID framework that would allow Indonesians to securely establish their identity online, as well as a personal data privacy law backed by an independent oversight authority. It advocates for a shift away from a narrow concentration on e-government toward a broader national digital transformation strategy.
