Digital platforms have transformed various aspects of the Indonesian economy and society. Over 75% of Indonesians use the internet, making platforms accessible to a large segment of society. Platforms have changed the way Indonesians purchase goods and services. They have buoyed the nation’s e-commerce market, which is expected to grow from USD 53.1billion in 2021 to USD 104 billion by 2025  at a growth rate of 18%.  Digital payment platforms are also providing access to financial services for remote communities. This is especially relevant in  an archipelago where 60 percent of banks are concentrated in the more developed Java island.

The impact of platforms in Indonesia reflects a broader trend across the region. As noted in the Tech for Good Institute’s Platform Economy Report, platforms have actively contributed to the region’s digital transformation by supporting the development of critical physical and digital infrastructure, and providing access and convenience to consumers and micro, small and medium enterprises (MSMEs). By bringing multiple stakeholders together at scale, digital platforms improve consumer access to various goods and services, and enable the digital transitions of micro, small and medium-sized enterprises.

At the same time, questions arise whether platforms can contribute to more than economic growth, but address social challenges as well. This question is relevant for a country that faces various constraints in terms of bridging various social and economic divides. For instance, digital infrastructure in Indonesia is mostly laid out in urbanised areas without reaching remote and underserved communities. More than half of the Indonesian population belong to the informal sector with jobs mostly concentrated in agriculture and low skilled services. This level of informality can perpetuate a digital skills gap where those with access to education and formal training can benefit more from the digital economy.

Amidst this backdrop, the Tech for Good Institute in partnership with KADIN INDONESIA co-hosted a seminar titled Digital Platforms and Impactful Innovations: Towards Sustainable Development in Indonesia. The event explored ways that platforms leverage innovation to address some of the archipelago’s most pressing social challenges.

Moderator and Panellists

• Theodore Sutarto, Assistant Deputy Minister, Coordinating Ministry for Economic Affairs, Republic of Indonesia
• Samsu Sempena, Director of Technology, PMO Prakerja, Coordinating Ministry for Economic Affairs
• Tirza Munusamy, Chief of Public Affairs, Grab Indonesia
• Ming Tan, Founding Executive Director, Tech for Good Institute

Key Takeaways

1. Digital platforms have transformed Indonesia’s digital economy and society.Digital platforms have democratised access to services that were once considered luxuries, available only to the affluent. Crises such as the COVID-19 pandemic widened their reach to more segments of the population. During this time, Indonesian platforms such as Grab and Gojek became more localised by meeting the increased demand for at home deliveries for everyone on lockdown. Other trends, such as increasing internet penetration and investments in digital infrastructure, have made these platforms more widespread. For instance, digital payment platforms now provide financial services to unbanked sectors of the population, while food delivery platforms create new income streams for partner riders and expand the customer base for merchants and restaurants. Additionally, e-commerce platforms have revolutionised the marketplace for SMEs, changing how individuals purchase goods and services.

2. Digital platforms are leveraging innovation to address social challenges.Digital platforms utilise their unique attributes—efficiency, scale, accessibility, and agility—to tackle significant social challenges in Indonesia. Both the public and private sectors can harness these platforms to solve pressing issues. For example, PMO Prakerja, a government upskilling programme, addresses the country’s persistent technical skills gap by acting as a “platform of platforms,” integrating various digital educational platforms and making diverse courses available online to over 17 million Indonesians. Despite these efforts, the number of Indonesian ICT workers remains low, at just 1.09 million or 0.75% of the total 144.01 million-strong labour force. In addition to upskilling, digital platforms are making strides in sustainability. For instance, Grab, as a ride-hailing platform, boasts the largest fleet of green vehicles in Indonesia, with over 10,000 two-wheel EVs. Leveraging its efficiency and scale, Grab also utilises data to optimise routes and reduce carbon emissions.

3. Platforms can be leveraged by both the public and private sectors to advance Indonesia’s long-term development goals.The EMAS 2045 Roadmap outlines priority areas for the country’s future, and digital platforms are essential tools for achieving these ambitious objectives. These areas include enhancing resilience, driving prosperity, strengthening inclusion, and advancing sustainability. To drive prosperity, platforms can help train and scale MSMEs, enabling them to fulfil orders more efficiently, automate processes, and build resilience against economic downturns. They can also strengthen inclusion by offering hyperlocal solutions that cater to the unique needs of sellers in specific areas. For example, many wet markets across Indonesian provinces are using digital payment and food delivery platforms to increase their sales and reach a broader customer base.

4. Robust policies are essential to fully unlock Indonesia’s digital economy potential.To ensure that Indonesia’s digital economy benefits everyone, robust policy frameworks are essential. Effective data sharing between the public and private sectors is crucial for informed policymaking, and increasing cyber resilience is vital for building trust and encouraging wider adoption of digital services. Additionally, regional cooperation is key. As highlighted in the Digital Economy Framework Agreement (DEFA), establishing uniform data and consumer protection standards across ASEAN is necessary. This approach would not only incentivise further digital investments in the region but also promote common regional prosperity.