Last week, we talked about a beautiful island − Lombok − of Indonesia. When we discuss a country, we most likely will talk about the tourist attractions, because they are attractive. But how well do you know about Indonesia? Minus all the tourist attractions, what else do you know about this country?
Indonesia is the largest country in Southeast Asia and it is also the largest archipelago in the world. It is a transcontinental country as it has territories from Southeast Asia to Oceania. Due to its vast areas, it is the world’s fourth most populous country, the most populous Austronesian nation, as well as the most populous Muslim-majority country. Containing more than half of the country’s population, Java is also the world’s most populous island.
With the abundance of natural resources and rich human resources across the country, Indonesia is the biggest economy in Southeast Asia and a member of G20 group of the world’s richest nations. In fact, with its large consumer base, rich natural resources and political stability, Indonesia has attracted a lot of investors. Thus, Indonesia has undergone a resurgence since the 1997 Asian financial crisis, becoming one of the world’s major emerging economies.
In a press conference on March 22, 2007, the Yayasan Indonesia Forum has developed a vision, which is Vision Indonesia 2030. There are four main objectives in this vision, which are:
- Indonesia will become the strongest economy, followed by China, India, United States and the European Union by the year of 2030.
- The population will reach 285 million by 2030.
- Indonesia’s GDP will reach US$ 5.1 trillion.
- Per capita income will reach US$ 180,000 per year.
In order to achieve Vision 2030, there are few assumptions that have to be secured, such as:
- Real economic growth averagely 7.62% per year.
- The inflation rate of 4.95% per year.
- Population growth averagely 1.12% per year.
Haryono Suyono – the former Coordinating Minister for Human Development and Culture – has stated that the success of Vision Indonesia 2030 requires the government and the community to prepare qualified human resources through education and training for the first 15 years. According to him, priority should be given to the field of education, especially in the field of both pure and applied science, computer science and electronics, as well as education of civilization and global knowledge.
10 years have passed since the commencement of Vision 2030. Apart from the numbers, there are a lot of visible transformations happening in Indonesia. The most obvious change is the mushrooming of tech startups in Indonesia.
Align with the Vision 2030, many of the young generation Indonesians are educated in the field of science, especially computer science. Many of them came back to their country after they pursued high education from all the well-known universities around the world including MIT, Purdue, Harvard, etc. and used their knowledge and skills to do something big. Beginning from this decade, there are a lot of young entrepreneurs built their own tech startups successfully. There are names that we would never miss like Tokopedia, Gojek, Traveloka, Bukalapak, Bridestory, etc.
The capital city, Jakarta is one of the biggest social media users in the world. Frankly, it is a huge market for e-commerce. According to a report from BCG Perspectives in 2013, Indonesia’s middle-class and affluent consumers (MAC) will grow by eight to nine million people every year. And by 2020, there will be roughly around 141-million MACs in the country. The report forecasted that by the time, the island of Java alone will have more MACs than the entire population of Thailand, and Sumatra will have more than the populations of Malaysia and Singapore combined. Therefore, not only local entrepreneurs take it as an advantage, many tech companies around the world are attracted to this large consumer base too. Moreover, there are many investors willing to invest in local startups, because they understood they might be investing in what could be the next Amazon or Expedia of Indonesia.
Though some might suggest that Indonesia is not yet at the tipping point that is required for fast traction for tech startups, but with the growth of internet penetration and the maturing of various online payment systems, and general consumer spending correlated with national GDP, all seem very lucrative for any startup in Indonesia, as well for the investors.
Last year, Indonesia’s president Joko Widodo announced a set of initiatives aimed at transforming the country into Southeast Asia’s largest digital economy by 2020. The plan consists of an e-commerce roadmap and 10 economic policy packages—from the formation of tech startups financing programs to the funding of a research center in Jakarta.
With the supports from the government and communities, the huge consumer base across the nation, and an abundance of highly educated and skilled young professionals, it is predictable that in a couple of years, Jakarta may become the next Silicon Valley at the same time Indonesia will become stronger than ever.
Share with us your thoughts about the growth of Indonesia in the comment box below. Next week we will dig more into the startups’ stories in Indonesia.