Promising opportunities and a market value of up to USD 340 billion by 2030, the digital economy could become the face of Indonesia's economy in the future. Recognizing the enormous potential of the digital economy in the future, Indonesia can anticipate and continue to drive the progress of the digital economy.
Bambang Brodjonegoro, CEO of the Asian Development Bank Institute, believes that focusing on future industries was the key that enabled Japan, South Korea, Singapore, and Taiwan to become developed countries in the early 1990s.
That is why, Bambang emphasized, Indonesia needs to focus more on promoting the green economy and the digital economy as two promising future niches. The large population and the composition of an adaptive young population guarantee sufficient demand and a market estimated to be worth USD 340 billion by 2030.
"Since we already know that global players will definitely enter the market, our digital economy, which is consumption-based, needs to move towards value-added activities. We must think beyond simply being users and instead enter the supply chain of data-driven manufacturing, agro-tech, health-tech, and gov-tech that boost national production," said Bambang at the "Indonesia Digital Direction Declaration" event in Jakarta on Wednesday (12/10/2025).
Since Indonesia cannot compete in terms of hardware production capacity, such as semiconductors and batteries, in the near future, software development is key to increasing these value-added activities. With a focus on software development, the government needs to encourage more startups to enter the market and seek customers.
"Ourstartups need to be more specific and respond to Indonesian consumption needs and support entrepreneurship that is not widely recognized by global players, for example, bringing fishermen/farmers closer to wholesalers and retailers, which shortens the supply chain and improves logistics efficiency," he explained.
According to Bambang, the prerequisite for developing innovative products cannot be separated from the priority of research and development (R&D), which needs to be accelerated. In other words, Indonesia's large GDP, which is supported by natural resources, will not last long unless R&D funding for technology and human resource development receives more than 0.3% of GDP, as is currently the case.
"Of the 10 startup companies in Southeast Asia, only one is from Indonesia, namely Gojek. In fact, product development comes from innovation, and innovation is rooted in R&D. Recently, we have also seen Vietnam enter the market with the startup Vinfast , a provider of electric car taxi services that we are seeing more and more of in Jakarta," said Bambang.
Indonesia can learn from Japan's approach of making Tsukuba University a center for R&D in technology education, data science, and AI. Japan has successfully transformed its suburban areas into global producers of technological innovation by bringing together the government, the business world, and academia.
"Take advantage of the Science Techno Parks ( STPs) located at several state universities. STPs already exist, but they are still underutilized, even though they are the best places, such as the STP UI in Depok and the STP ITB near Tegalluar. Meetings between the government, the business world, and academics there should be the beginning of accelerating the competitiveness of the digital economy in Indonesia," said Bambang.
Direction of development
The Ministry of Communication and Digital Affairs (Komdigi) declared "Indonesia Digital Direction" and established a strategic plan for 2025-2029 centered on the principles of Connected, Growing, and Secure. The empowerment of the digital ecosystem, including the digital economy which has a potential value of USD 340 billion by 2030, will be more integrated through value-added activities and synergies between the government, the business world, and universities.
Read also:
Benedictus Krisna Yogatama
On the same occasion, Minister of Communication and Digital Affairs Meutya Hafid said that the three pillars of Connected, Growing, and Secure will guide Komdigi in navigating digital transformation policies as a national agenda. Currently, with the Digital Transformation Index rising from 52.45 in 2023 to 54.29 in 2024, the infrastructure network pillar has experienced the most significant growth, but utilization remains relatively suboptimal compared to its capacity.
Under the Connected pillar, Komdigi encourages the implementation of inclusive and affordable digital connectivity, particularly in 2,500 villages in remote areas of Indonesia that do not yet have internet access, as well as the auction of 1.4 GHz frequencies to expand high-speed internet access. Meanwhile, under the Grow pillar, Komdigi acts as the orchestrator of an integrated digital ecosystem, including through the formulation of AI Ethics and an AI Roadmap.
"Komdigi has completed 90% of the AI and AI Ethics Roadmap. Hopefully, these two Presidential Regulations can be signed by the President early in 2026. This roadmap is broad in nature, so it does not regulate sectoral development," said Meutya.
Meanwhile, under the Security pillar, Komdigi is committed to working harder and more closely with the National Cyber and Crypto Agency (BSSN) to tackle crimes in the digital realm, ranging from online gambling, fraud, crimes against children, hacking, to data leaks.
"We strive to continue providing the infrastructure foundation for digital policy governance, but we do not want to walk alone. Through this Declaration, we will move together to become more connected to unite, grow to advance, and remain vigilant to maintain sovereignty," concluded Meutya.
Reiterating Meutya's explanation, Komdigi Secretary General Ismail explained that with a target of achieving an average national internet speed of 100 Mbps by 2029, the government is targeting the information and communications sector to contribute 4.4% to GDP, an increase in the Indonesian Digital Society Index from 44.34 to 53.23, and the number of workers in the information and communications technology (ICT) sector to reach 5.21% of the cumulative workforce.
"We cannot be good orchestrators without fully understanding the needs of digital economy actors. Regulatory costs must be more rational, doing business must be easier, investment must be expanded, legal certainty must be guaranteed, and sandbox policies must be technology-friendly. Our approach is adaptive and encourages inclusive, meaningful, and safe digital utilization, rather than restrictive and prohibitive," said Ismail.
Infrastructure needs incentives
Chairperson of the Indonesian Telecommunications Providers Association Dian Siswarini welcomed the three principles in Komdigi's strategic plan. Representing industry players, Dian emphasized that connectivity is not only a matter of stable, equitable, and secure infrastructure, but also its capacity as a driver of digital economic growth.
Dian explained that with national internet penetration reaching 80.66% or 229.43 million of Indonesia's total population, 5G internet network coverage has only reached 26% and is concentrated in major cities. As a result, network quality has become inconsistent due to unbalanced capacity and utilization, causing high penetration rates to not reflect even internet usage.
"Internet investment is still very much needed because the 5G ecosystem is not yet optimal. There is still a digital divide between big cities and remote areas. It's not just infrastructure, but also digital literacy. We will focus on this, because if we only build infrastructure without literacy, usage will not be optimal," said Dian.
A number of recommendations from telecommunications industry players to strengthen the Connected pillar. First, infrastructure needs to strengthen data center interconnectivity and cloud-ready infrastructure, accelerating 5G SA and edge computing. Second, create more equitable coverage and inclusion with special incentives. Third, integrate cloud services, smart cities, and other digital public services.
"The government has a role to play in data protection and security. We also expect policies to mitigate negative impacts so that the benefits are greater. In addition, the government needs to establish fair regulations so that global platform players are subject to the same rules as those imposed on national industry players," said Dian.
Read also:
Benedictus Krisna Yogatama
Complementing Dian's view, Microsoft Indonesia President Director Dharma Simorangkir emphasized the importance of mapping the threat landscape as the other side of interconnected digitalization. In principle, Dharma reminded us that sources of threats develop simultaneously with the development of cyber defense.
"According to Microsoft data, 52% of digital attacks are financially motivated. We are seeing a cybercrime economy phenomenon. Cybercrime has become an ecosystem with specialized access brokers, ransomware operators, and data extortionists. There are financial incentives when these loopholes are exploited by cyber mercenaries," explained Dharma.
To address these threats, cybersecurity needs to be designed by combining three key concepts: security by design as the foundation of security that is created before the application is designed; security by default, which ensures that authentication and passwords are designed as a requirement, not an option; and secure operations in monitoring threats.
"Without sufficient investment, cyber risk has the same impact as financial risk and legal risk. Therefore, of Microsoft's 220,000 employees worldwide, 34,000 or 16% of them are cyber engineers who focus on maintaining user security," concluded Dharma.
