Indonesia at the Center of Digital Transformation in SEA

Indonesia has rolled out several initiatives and policies that support the digitalization of its MSME ecosystem.

FREMONT, CA: It is projected that 60% of the global GDP will be dominated and massively influenced by the digital economy. As the world slowly recovered from the aftermath of the covid-19 pandemic, businesses across the globe are increasingly embracing digitalization. Even MSMEs are developing digitalization capabilities and heavily investing in associated technologies. Indonesian President Joko Widodo has reiterated on several occasions that digitalization is very necessary for the nation’s economic growth. Indonesia is already on route to becoming Southeast Asia’s largest digital economy by 2021, owing to its expanding MSME ecosystem. MSMEs cover 99 percent of the existing business in the country and generate 60% of the nation's GDP. The country has launched several initiatives that support the growth and expansion of search businesses. The country has launched several initiatives in the past couple of years that support the growth and expansion of search businesses, such as Making Indonesia 4.0 Roadmap 2018, E-Commerce Roadmap 2019, and Go Digital Vision 2020.

Accelerating digitalization across MSMEs has been identified as part of Indonesia's covid-19 recovery efforts. At the end of 2020, the nation had exceeded its goal of digitalization of MSMEs, with over 10 million small businesses migrating to online platforms. Though this number accounts for only 16% of Indonesia's total MSMEs, the rate at which digitalization is occurring will continue in 2021 along with the coming years. As Indonesia aligns its digital transformation policies with APEC's goal of innovation and digitalization, the nation is tactically rebranding itself as a model of leadership in the MSME domain. The country’s policies are already supporting several businesses in adapting to the new normal and embrace technologies that will future-proof their operations. If the country is able to successfully address the digitalization challenges that MSMEs face and translate those into practical solutions, Indonesia will become a significant player that will drive the future digital economy and nurture resilient businesses in the post-pandemic era.