Indonesia sees growth in digital competitiveness despite the pandemic

Despite the difficulties the past two years presented, digital competitiveness in regions in Indonesia continues to show a positive trend, found a recent survey by East Ventures, a sector-agnostic venture capital firm of investment in technology startups. The study done in collaboration with Katadata Insight Center and PwC Indonesia titled the East Ventures - Digital Competitiveness Index 2022 (EV-DCI 2022) found increased digital competitiveness of 35.2 points, compared to the previous year, which was 32.1 in 2021, and 27.9 in 2020.

The decrease in the digital competitiveness gap is also seen from the smaller spread value. The spread value or the difference between the highest province scores (DKI Jakarta 73.2) and the lowest (Papua 24.9) for EV-DCI 2022 is 48.3, while in 2021 and 2020 they were 55.6 and 61.9, respectively. 

The smaller spread value indicates an increase in the digital competitiveness of the provinces in the middle and lower ranks. Moreover, increasing digital competitiveness was also experienced in many provinces outside Java. Although the top 10 rankings with the highest EV-DCI scores are still occupied by the provinces in Java and Bali, other provinces continue to show a fairly good increase in digital competitiveness, the report said.

The coordinating minister for economic affairs, Airlangga Hartarto, said that digitalisation could provide its own added value in various fields. "Acceleration of economic digitisation, creates equitable and diverse opportunities, and encourages opportunities and productivity to generate added value," said Hartarto. 

The growth of the digital economy cannot be separated from the role of stakeholders in the sectors. Digital transformation is developing and contributing to essential sectors related to daily activities, such as logistics, fintech, edtech, and healthtech. Meanwhile, such transformation also occurred earlier in the tourism and e-commerce sectors. The study added that government's commitment to supporting the growth and equity of the digital economy also aided the effectiveness.

One example which was prominent in the digitisation was the procurement of government goods and services with the e-catalog system. The handling and monitoring of COVID-19 in Indonesia has also adopted digitalisation. The PeduliLindungi application and various health services from the Ministry of Health that can be accessed via telemedicine and online-based.

“East Ventures believes that accelerating the adoption of digitalisation is crucial in building a more robust digital ecosystem. However, this can only be achieved when all stakeholders work together to achieve it," added Willson Cuaca, Co-Founder and Managing Partner of East Ventures.

The report added that the right strategy to achieve the digital golden era in Indonesia can be described by the shape of a house. The infrastructure of Technology, Information, and Communication (ICT) is a fundamental foundation that is needed across sectors and institutions. Strengthening ICT infrastructure can, hence, enable digitalisation in various aspects, thereby accelerating the creation of digital government, digital society, and digital business. These aspects also need to be strengthened by the application of sustainable principles or Environmental, Social, and Governance (ESG) to maintain long-term digital economic growth, said the report

"Towards Indonesia's digital golden era, there are five aspects that need to be considered. Accelerating the development of ICT infrastructure can facilitate more equitable digital economic growth, creating digital governance that focuses on efficiency and transparency, developing digital talent capabilities through improving the education system and skills, focusing on increasing digital technology adoption in various sectors, and applying sustainability principles to achieve the golden era of the digital economy,” said Radju Munusamy, PwC Indonesia Partner.

Photo courtesy: 123RF

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