Indonesia
Gearing up for Electric Vehicles and the Digital Economy: Catch-up with AIBP Indonesia Advisory Board

Gearing up for Electric Vehicles and the Digital Economy: Catch-up with AIBP Indonesia Advisory Board

Following the AIBP advisory board meetings in Malaysia and Thailand, AIBP held its third Advisory Board Meeting with our stakeholders in Indonesia. The board members weighed in on their views around digital transformation and innovation in the local ecosystem.

Key takeaways include:

  • Data-driven Decision Making
  • Key Role of Cybersecurity in IoT
  • Importance of Holistic Development of the EV Ecosystem

Data-driven Decision Making

In an era where data is collected in massive volume and at high velocity, enterprises are looking to maximise the value they derive from data. According to AIBP ASEAN Enterprise Innovation Survey 2021/22, nearly half of the enterprises in Indonesia perceive business intelligence platforms that help make sense of data as the digital transformation investment that will drive the largest benefits to their organisation. The same survey also highlighted that 82% of Indonesia enterprises view themselves as being data driven. A data driven approach allows enterprises to make objective and accurate decisions faster than ever before. 

While there are systems in place, over 50% of enterprises believe that their data management systems can be better as they are still managing some data manually. 55% of the enterprises also believe that getting people from their organisation onboard is the principal challenge in becoming data driven. 

Data forms the foundation for paving the way for process automation and embarking on Artificial Intelligence (AI) later on. It is worth noting that close to half of Indonesia enterprises look to business process automation when it comes to fortifying business resilience. Moreover, organisations can leverage on advanced data analytics to better identify consumer patterns and enhance digital marketing capabilities, which is one of the digital transformation initiatives 71.7% of Indonesia organisations are focusing on.

One of the areas the advisory board members discussed was the functions that enterprises expect digital technology to enable – one thing that stood out to them was how Indonesian enterprises found supply chain as a more crucial function to digitalise than sales and marketing. One possible reason they thought could be the geographical characteristic of Indonesia and the exponential benefit that it could bring. The advisory board also shared their current projects in enabling a customer 360 view and how they are building a customer data platform so as to enable first party data collection for cross sell opportunities.

Key Role of Cybersecurity in IoT

IoT is a growing phenomenon in ASEAN and Indonesia is no exception. According to Telkom Indonesia, it is expected that Indonesia will have 678 million IoT devices by 2025. The need to strengthen the foundations of IoT and cybersecurity emerges as a key topic in this area. In line with this, the National Cyber and Encryption Agency (BSSN) will establish a National Security Operation Centre (NSOC) to coordinate national cybersecurity operations. The NSOC is an attempt by the BSSN to develop a protection system and increase situational awareness regarding the state of cybersecurity in Indonesia. This will play a key role in accelerating responses to cyberattacks and readying Indonesia for IoT adoption as the nation progresses towards becoming a smart city.

Importance of Holistic Development of the EV Ecosystem

With an increasing focus on sustainability and smart mobility, there has been a push for electric vehicle (EV) adoption in Indonesia. The government has set a nationwide target of battery-based electric motorcycles to reach two million in 2025, according to Maritime Affairs and Investment Coordinating Minister Luhut Binsar Pandjaitan. The growth of EV adoption has to be accompanied by the relevant infrastructure and services. This initiative would require participation across various sectors, including raw material, battery manufacturing and EV assembly. Public private partnerships will also play an important role in driving this forward. Activities like the Jakarta Formula E has also helped to increased the prominence of EV development in Indonesia.

Indonesia’s Digital Economy National Policies

With the goal of expediting digital transformation across the nation, the Indonesian government established the 2021-2024 Digital Indonesia Road Map. It comprises 4 strategic directions: Digital Infrastructure, Digital Government, Digital Economy, Digital Society. 10 priority sectors are the target of this initiative: Digital Transportation and Tourism, Digital Trade, Digital Financial Services, Digital Media and Entertainment, Digital Agriculture and Fisheries, Digital Real Estate and Urban, Digital Education, Digital Health, Industrial Digitization, Government Digitization. Several measures have been rolled out to support this initiative. One of them includes the digital onboarding of more than 64 million micro, small and medium enterprises (MSMEs) across the country, encouraging them to ‘Go Digital and Go Global’. The government is aiming for 30 million MSMEs to go digital by 2024.

Partnerships for Growth and Innovation

Public-private partnerships have been playing a key role in facilitating the digital transformation of the economy. Nonetheless, there still remain obstacles to be overcome.

Yet, in order for digital economy benefits to materialise at scale, adoption and implementation challenges by local enterprises have to be recognised as key barriers that may delay the progress of various policies. Strong partnerships within local ecosystems are key in improving the probability of success.

Through our work on driving digitalisation ecosystems in Indonesia, we have witnessed the progress of digital transformation in Indonesia, we have seen first hand how the discussion on digital transformation has changed from understanding the benefits to deriving real value, both financial and non-financial from implementation projects.

It was a great opportunity to be able to meet up with our stakeholders in Indonesia. We look forward to more in-person discussions over the next few months and will be welcoming our ASEAN advisory board to Singapore for the AIBP Innovation Retreat on 4 – 5 July.

Interested in being part of our ecosystem? Email us at [email protected] or sign up on our website for more content.

AIBP

24 June 2022