Preface
All of us began 2021 with uncertainties and hopes. The ongoing pandemic has changed every aspect of the global
landscape. As a player in Indonesia’s digital economy since 2009, East Ventures has felt the rapid acceleration of digital
adoption amidst the pandemic. From 2009 to 2019, internet users in Indonesia grew from 30 million to 167 million,
reflecting an addition of 137 million in 10 years. From May to December 2020, internet users increased by 25 million in
just 8 months. What should have been a 3 year process was accelerated into 1 year as a result of the pandemic.
Given that Indonesia is a vast and diverse country, we should not judge the development of Indonesia by the hustle and
bustle of Jakarta as its capital city. We must also measure the development of the digital economy and the impact of
technology on the lives of the fishermen in Indonesia’s outermost coastlines, the farmers in Indonesia’s various islands,
and the students who live in the most remote areas of the country. Has the digital economy helped them gain equal
opportunities as their urban counterparts? The EV-DCI 2021 report is a testament to our commitment to cultivate a
more inclusive digital economy. We created this report in the hopes that we can invite everyone to join hands and fulfill
the promise of an equally distributed digital economy.
Indonesia’s Digital Economy to
Slingshot into its Golden Era
Co-Founder and Managing Partner
of East Ventures
Willson Cuaca
“The EV-DCI 2021 report is a testament of
our commitment to creating a more inclusive
digital economy.”
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Indonesia’s digital economy has, in fact, been slightly pulled back by COVID-19, but this does not mean that the road to
its golden era is further away. Utilizing an analogy, we can think of Indonesia’s digital economy and all of its potential as a
rock in our hands. For more than a decade, we have built the digital ecosystem thoroughly in order to unearth and
unleash its potential, like the rubber in a loaded slingshot. Then the pandemic hit, it devastated almost every sector of
the economy and forced many startups to halt their rapid growth. In our analogy, this has pulled back the digital
economy ‘rock’ effectively loading the slingshot. However, this slingshot that was further pulled back actually
strengthens the momentum forward because the pandemic has also triggered a rapid leap to digital adoption. According
to the SEA eConomy 2020 report, one in every three online service users in Indonesia last year was a newcomer. Data
from Digital Indonesia 2021 reveals that there are more than 202.6 million of internet users in Indonesia, which is equal
to 73.7% of the population.
The pandemic-induced crisis has pulled back the slingshot for a prolonged period. The gears of our economy cannot
move normally as long as the people and businesses are still restricted for the sake of public health. However, in the past
year, resilient startups have managed their business prudently and maintained discipline in pursuing growth. These are
the startups that can survive the crisis, even booking their best performances thus far. These startups are the ones who
fortify the rubber in the slingshot.
We should not forget that this rubber cannot be stretched out for too long or too far as it can break, hence our priority
must be on controlling the spread of Covid-19. Once the pandemic is properly under control, Indonesia can release its
grip and launch the digital economy into its golden era. Once Indonesia's digital economy has taken off, we hope that the
rock will take all Indonesians along with it -- not only the people in Jakarta and Java island, but also all of the people
across Indonesia’s 34 provinces. How magnificent Indonesia is.
| East Ventures - Digital Competitiveness Index 2021
Executive Summary
Digital Economic Transformation in The Covid-19 Era
The Covid-19 pandemic caused an unprecedented global health and economic crisis, forcing governments, businesses,
and consumers to adopt new behaviours. Digital transformation became inevitable as a result of governments
implementing physical distancing restrictions to prevent the spread of the virus. People around the world had to learn to
rely on technology to fulfil their daily needs and carry out their day to day tasks.
Mapping of Digital Competitiveness in Indonesia
Covid-19 pandemic acted as an accelerator of digital transformation in Indonesia. EV-DCI 2021 found that digital
competitiveness among provinces in Indonesia have become more equal where median of the overall EV-DCI score
jumps to 32.1 in 2021 (+4.2 YoY). This underlining that digital competitiveness has become more evenly distributed in the
34 provinces. 2 pillars of the index: The Use of ICT and Entrepreneurship and Productivity experienced a large digital leap
in this past year. The infrastructure pillar also saw the highest lift. However, there are still significant median score gaps
between Indonesia’s provinces, specifically in the entrepreneurship and productivity, finance and HR pillars.
Analysis of Regional Competitiveness
The top 10 provinces in EV-DCI 2021 are still the same as last year’s report. However, there have been significant changes
in the rankings. In EV-DCI 2020, the top six provinces were all located in Java, with DKI Jakarta in the first place. The rest
of the top 10 included Bali (7th), East Kalimantan (8th), South Sulawesi (9th), and the Riau Islands (10). In EV-DCI 2021, Bali
jumped three places (4th), ahead of Banten, DI Yogyakarta, and Central Java. Riau Islands also climbed three places (7th),
surpassing Central Java, which slipped to eighth place this year.
The Digital Revolution in Various Sectors
Sectors that experienced high growth include ICT and e-commerce. On the other hand, several sectors in the digital
economy, such as transportation and warehousing and financial services also faced a challenging period in the 2Q20.
However, those sectors rebounded strongly in 3Q20. Lastly, sectors that gain traction during the pandemic are
telemedicine, online education, delivery services, virtual meetings, and digital transactions and payments.
Recommendation
To accelerate digital transformation in society and to take advantage of this momentum for the prosperity of the nation,
a number of steps can be taken by the central government, local governments and digital economy players: Preparation
of Qualified Human Resources (HR), Increasing Productivity and Added Economic Value, Digital Infrastructure
Development, Developing a Comprehensive Digital Ecosystem, Improving the Geographical Distribution of Digital
Competitiveness.
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| East Ventures - Digital Competitiveness Index 2021
Content
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Chapter 1
Digital Economic Transformation in The Covid-19 Era
5
Chapter 2
Mapping of Digital Competitiveness in Indonesia
12
Chapter 3
Analysis of Regional Competitiveness
30
Chapter 4
The Digital Revolution in Various Sectors
52
Chapter 5
Recommendation
66
| East Ventures - Digital Competitiveness Index 2021
Chapter 1 Digital Economic Transformation
in The Covid-19 Era
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| East Ventures - Digital Competitiveness Index 2021
Following the recent Covid-19 pandemic,
Indonesia’s digital economy flourished
(+11% YoY in 2020) amidst contraction in
the economic growth, accelerating
transformation towards digital economy
The Covid-19 pandemic spread rapidly across the world in 2020. By
February 2021, the total number of cases worldwide surpassed 100M.
As a result, many countries, including Indonesia, experienced a severe
economic contractions.
Social distancing measures actively reinforced during the pandemic
have increased people’s reliability towards the internet, promoting the
rapid growth in the digital economy. In Indonesia, this phenomenon
can be seen in the upsurge of percentage of internet users to 54.4% in
2020 (+6% YoY)1.
In 2020, SEA digital economy reached US$ 105B (+5% YoY)2, including
which Indonesia and Vietnam as the two SEA countries to record
double digit growths. Digital economy contributed US$ 44B (+11% YoY)
to Indonesia’s economy in 2020, and is predicted to reach US$ 124B in
20252.
1BPS
2
e-Conomy SEA 2020 by Google, Temasek, and Bain & Company
Updated 290321
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| East Ventures - Digital Competitiveness Index 2021
The pandemic
presented momentum
for local governments
to make use of digital
technology to provide
services and improve
economic growth
Ridwan Kamil introduced Digital West Java vision as a roadmap to develop the province
There are two primary agendas on the Digital West Java roadmap: Smart City for cities and urban areas, and Smart
Village for villages.
The Central Java government has made substantial efforts to support digital economic, including
promotion for MSMEs through #LapakGanjar
The province government is determined to continue to persuade business owners to migrate towards a digital business
ecosystem. In Central Java, the government is serious in improving digital infrastructure in the area, but it still lacks a
number of pillars to support its digital competitiveness, such as low wage rate, which causes low spending on
information and communication technologies (ICT).
Many provinces do not want to be left behind in riding the wave of digital transformation to push for
regional economic progress
•
Yogyakarta’s provincial government is currently implementing the Jogja Smart Province program
•
Riau Islands is developing the Nongsa Digital Park
•
South Sulawesi is encouraging the development of Makassar Digital Valley
“Following Covid-19, the digital economy will fly forward, as if it has been launched by slingshot.
By strengthening the digital economy, national economic growth
will be resurrected post pandemic.”
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| East Ventures - Digital Competitiveness Index 2021
A number of digitalrelated economic
sectors experiencing
positive growth amidst
the pandemic
The communication and information sector
has grown rapidly during the pandemic
Public spending on the internet reached 8.1 percent in
early 2020 (+6.1% YoY). On average, internet usage has
increased from 4-6 hours/ day to 7-10 hours/ day.
Other sectors to gain momentum during the pandemic
due to social distancing are telemedicine or online
medical consultation services, long-distance or virtual
education, goods and food delivery services,
warehousing, and digital transactions and payments. A
shift in people’s habits, caused by the pandemic, is
believed to continue to have an impact on these
sectors.
“The digital sector, especially the information and communication subsector, has high resilience.
It can be one of the accelerators to revive the Indonesian economy.”
1 e-Conomy
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SEA 2020 by Google, Temasek, and Bain & Company
| East Ventures - Digital Competitiveness Index 2021
Perspective
What are the government’s focus areas in leveraging the current momentum to accelerate digital
transformation?
Digital Economy Accelerates
Indonesia’s Economic Recovery
Coordinating Minister for Economic Affairs
Airlangga Hartarto
MSMEs
Human Resources
Infrastructure Support
The key to speeding up digital
transformation is skilled
manpower in the two sides of the
economy: demand and supply
Infrastructure is the backbone of
digital transformation. Several key
developments include:
As of September 2020, 2.4M
MSMEs had joined the digital
market (> government’s target)
(1) Fiber optic cable network
installation across Indonesia
There are programs run by the
Ministry of Cooperatives and
SMEs, and SME e-smart initiatives
from the Ministry of Industry. The
Ministry of Communications and
Information Technology, Ministry
of Agriculture, and Ministry of
Maritime Affairs and Fisheries
have also campaigned for
#BanggaBuatanIndonesia.
Hence more inclusive, not
exclusive, training in digital skills
is necessary
Prioritization on e-learning, e.g.
the courses offered as a part of
pre-employment benefits (Kartu
Prakerja)
(2) Connectivity expansion of
satellite Satria to Eastern
Indonesia
(3) Data center
(4) 5G network prototype.
“We have to be smart because Indonesia is the biggest country in Asean. Within Asean,
Indonesia is the biggest digital market, so the world is watching.”
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| East Ventures - Digital Competitiveness Index 2021
Perspective
What has the government done, especially the Coordinating Ministry for Maritime Affairs and
Investment, to attract investment in the digital economy?
Pharmaceutical industry — In the past, almost 90% of pharmaceutical products sold in Indonesian market were
imported. Indonesia used to import paracetamol from India. As India went under a lockdown, we were in shocked. But
now, Indonesia already has a paracetamol factory in Cilacap, the result of collaboration between Pertamina and Kimia
Farma
Food sector — Indonesia already owns a food estate and is in the process of developing the agricultural machinery
industry
Healthcare sector — Following the passing of the Omnibus Law on Job Creation, we are currently building international
hospitals in Bali, Jakarta and North Sumatra. This aims to reduce the number of people seeking medical treatment
abroad and increase Indonesia’s foreign exchange earnings
Logistic ecosystem – In the past, the President has launched a sea toll program. According to the evaluation, the program
was running well but it could have been better. So, we bring digitalization to the program, allowing us to learn more
about ships movement and create more efficiencies
Digitalization as Key to
Encourage Investments
Coordinating Minister for Maritime
Affairs and Investment
General (Ret.) Luhut Binsar
Pandjaitan, MPA
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Tourism industry – The government helps to promote domestic tourist destination through collaboration with digital
platforms and championing local made product by #BanggaBuatanIndonesia campaign. All these are done at a low cost
with considerable effectiveness
The contribution of the digital economy is estimated to reach 4.6
percent in 2024. Meanwhile, the target for e-commerce
transaction value is IDR 600T in 2024.
“More Indonesian must join the digital economy. Without the digital economy, Indonesia will not
be able to compete with other countries.”
| East Ventures - Digital Competitiveness Index 2021
Perspective
What is the government fiscal policy to accelerate digital economy transformation?
1
2
3
Financing Digital Infrastructure
is Government’s Priority
Sufficient ICT budget to
connect various blank spots
in Indonesia
State Budget for ICT
Infrastructure
State budget support for
connectivity in schools, health
clinics, and villages
# Schools Funded
State budget for the
development of human
resource
Dedicated State
Budget
IDR 29.6T
253,000
Minister Of Finance
Sri Mulyani Indrawati
“To accelerate the digital economy transformation, we prioritize the State Budget to finance
digital infrastructure development, affordable internet, and human resources development.”
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| East Ventures - Digital Competitiveness Index 2021
Chapter 2 Mapping of Digital
Competitiveness in
Indonesia
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| East Ventures - Digital Competitiveness Index 2021
East Ventures Digital Competitiveness Index (EV-DCI)
East Ventures has measured an index of the digital competitiveness across 34 provinces in Indonesia, consisting of three sub-index supported by three
pillars each. Each pillar consists of four to nine indicators, totaling 49 indicators that are used to make up the index.
To align each indicator, the actual score for each indicator is converted into a standard score on a scale of 0 to 100. This score shows the relative
comparison of the performances between one region and another. The pillar score calculated using the average score of all indicators with the same
weight. Each pillar is aggregated in the sub-index under the same weight.
EV- DIGITAL
COMPETITIVENESS INDEX
40%
INPUT
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40%
OUTPUT
20%
SUPPORT
Human Resources
Economy
Infrastructure
The Use of ICT Information and
Communication Technology (ICT)
Entrepreneurship and Productivity
Finance
Expenditure for Information and
Communication Technology (ICT)
Employment
Local Government (Pemda) Regulation
and Capacity
| East Ventures - Digital Competitiveness Index 2021
Indicators behind East Ventures Digital Competitiveness Index (EV-DCI)
INPUT
Human Resources
1. Number of Students with Digital Capabilities
2. Growth of Students with Digital Capabilities
3. Number of Lecturers in Digitalization-Related
Study Programs
4. Number of Digitalization-Related Study
Programs
5. Digital Literacy Index
The Use of ICT
1.
2.
3.
4.
5.
6.
Ratio of Citizens that Have Cellular Phone
Ratio of Citizens that Have Computer
Ratio of Citizens that Have Access to Internet
Ratio of Citizens that Access Internet from Home
Ratio of Citizens that Access Internet from Office
Ratio of Citizens that Access Internet from
School
7. Ratio of Citizens that Access Internet with
Laptop
8. Ratio of Citizens that Access Internet with
9. Cellular Phone
Expenditure for ICT
1. Ratio of Households that Have Expenditure for
ICT
2. Average Expenditure of Households for ICT
3. Total Renumeration and Wage of Information
and Communication Sector Workers
4. Average Renumeration and Wage of
Information
5. and Communication Sector Workers
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OUTPUT
SUPPORT
Economy
1.
2.
3.
4.
5.
7.
GRDP of the Information and Communication Sector
GRDP Contribution of the Information and Communication Sector
GRDP Growth of the Information and Communication Sector
GRDP of Warehousing, Transportation Support, Post & Courier Subsectors
GRDP Contribution of Warehousing, Transportation Support, Post & Courier
Subsectors
GRDP Growth of Warehousing, Transportation Supporter, Post & Courier
Subsectors
GRDP of the Financial Services Sector
8.
9.
GRDP Contribution of the Financial Services Sector
GRDP Growth of the Financial Services Sector
6.
Entrepreneurship and Productivity
1.
2.
3.
4.
5.
6.
7.
8.
Ratio of Population Using the Internet in their Main Job
Ratio of Population Using the Internet in their Job for Communication
Ratio of Population Using the Internet in their Job for Marketing
Ratio of Population Using the Internet in their Job for Sales via Social Media
Ratio of Population Using the Internet in their Job for Sales via E-commerce
Electronic Money Transactions Volume
Electronic Money Transactions Value
Loan Using Fintech
Manpower
1.
2.
3.
4.
5.
6.
Infrastructure
1. Level of Electricity Disturbance
2. Ratio of Villages that Get Strong and Very
Strong Signal
3. Ratio of Villages that Get 3G Signal
4. Ratio of Villages that Get 4G Signal
5. Ratio of Households with Fixed Phone
Connection
Finance
1. Financial Inclusion Index
2. Number of Digital Finance Service Agents
3. Ratio of Villages that have ATM
Regulation and Capacity of the
Regional Government
1. EKPPD (Government Performance) Index
2. Gross Enrolment Rate of Senior High
Schools/ Vocational Schools
3. Gross Enrolment Rate of Higher Education
(Diploma-Bachelor)
4. Number of Vocational Program
Participants
Number of Workers in Digitalization-Related Sectors
Ratio of Workers in Digitalization-Related Sectors
Growth of Workers in Digitalization-Related Sectors
Number of Workers in Digitalization-Prone Categories
Ratio of Workers in Digitalization-Prone Categories
Growth of Workers in Digitalization-Prone Categories
| East Ventures - Digital Competitiveness Index 2021
Inequality digital
economy persisted not
only between western
and eastern Indonesia
but also between Java
and non-Java
Digital competitiveness tends to be
dominated by the top-tier provinces
generally located in Java. Then the EV-DCI
score quickly decreases to the second-tier
provinces, which are generally located in
Sumatra and Kalimantan. This is followed
by the third-tier provinces (bottom
group/level), which are generally located
in eastern Indonesia. This pattern
remains consistent, in both the
distribution of EV-DCI scores in 2020 and
2021.
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#27, Aceh
#31, West Kalimantan
#10, East Kalimantan
#32, North Maluku
#30, West Papua
#7, Riau Islands
#34, Papua
#33, West
Sulawesi
#25, Bangka Belitung Islands
#26, Lampung
#1, DKI Jakarta
#28, Central Kalimantan
#9, South Sulawesi
#5, Banten
#2, West Java
#8, Central Java
#3, East Java
#6, DI Yogyakarta
Top 10
#4, Bali
#29, East Nusa Tenggara
Bottom 10
| East Ventures - Digital Competitiveness Index 2021
The distribution is
becoming more even as
the gap is getting
narrower
Other provinces are catching up to
Jakarta’s digital competitiveness
A fall in score does not mean the condition
of the digital economy in Jakarta is declining,
rather, it speaks to the fact that other
provinces are catching up to Jakarta’s digital
competitiveness.
This year, Bali and the Riau islands scores
have increased significantly and broke the
domination of the Java provinces.
The median EV-DCI increases from
27.9 to 32.0
The increase shows that the digital
competitiveness of provinces in the second
and third-tiers is getting better. For example,
Bengkulu, Southeast Sulawesi, Central
Sulawesi, and Central Kalimantan have
experienced an increase in their EV-DCI
scores.
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| East Ventures - Digital Competitiveness Index 2021
Flattening trend in the distribution of three sub-index indicates that digital
competitiveness is increasingly even between the 34 provinces.
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| East Ventures - Digital Competitiveness Index 2021
Sub-index Input
The gap between provinces as the highest
score has decreased significantly, from
63.8 points in 2020 to 52.6 points in
2021. This means the readiness of the
ecosystem is becoming more evenly
distributed between one province and
another.
Main Takeaways
The competition between first place (DKI Jakarta) and second place (West Java) is getting tighter. This is due to
improvements in the HR and ICT Expenditure pillars in Jakarta lagging behind West Java.
The provinces with the highest increase in Input scores are East Nusa Tenggara (NTT) and North Sumatra. The increase in
NTT's score is driven by an increase in ICT spending, and North Sumatra's due to an increase in ICT utilization. The
provinces whose scores decreased the most are Jakarta and DI Yogyakarta, mainly driven by a decline in scores on the ICT
and HR Expenditure pillars.
Input
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Output
Support
| East Ventures - Digital Competitiveness Index 2021
Sub-index Output
The competitiveness between provinces
is even more unequal as the gap between
the most competitive provinces and
those at the bottom is widening, while
there is even distribution in the middle
group.
Main Takeaways
This is the most unequal sub-index. Jakarta continues to dominate, with a score far above second placed West Java, and
the difference in scores has widened as Jakarta experienced rapid improvements in the Entrepreneurship and
Productivity pillars, while West Java experienced a decrease in its competitiveness in this regard.
From the third rank onwards, the distribution of competitiveness in the Output sub-index is even more evenly distributed
among provinces. (This means many provinces have improved their competitiveness, but those at the top have also
increased their scores).
Provinces with the highest increase in the Input score are the Riau Islands and Bali. The increase in their scores is driven
by improvements in the Entrepreneurship and Productivity pillars and in the Riau Islands also by the Employment pillar.
The provinces whose scores decreased the most are East Java and Central Java, driven by a decline in the scores of the
Entrepreneurship and Productivity pillars.
Input
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Output
Support
| East Ventures - Digital Competitiveness Index 2021
Sub-index Support
The support tends to be more equality
between provinces despite the distance
between the highest and lowest
provincial scores has increased slightly,
the middle figure experienced a fairly
high increase.
Main Takeaways
This is the sub-index with the most even distribution of scores driven by better conditions of infrastructure and access to
finance throughout Indonesia.
However, although it is more evenly distributed for almost all provinces, there is a sharp gap at the top (between Jakarta
and West Java), and also at the bottom (between Papua at 34 and the provinces ranked 33 - West Papua in 2021 and
Central Kalimantan in 2020).
The provinces with the highest increase in Support scores are Bengkulu and Central Kalimantan, mainly driven by
improvements in the Infrastructure and Finance pillars. The provinces whose scores decreased the most are Lampung
and North Sumatra, with both experiencing a decline in the Local Government Regulation and Capacity pillar. Lampung
also experienced a decline in the Finance pillar, while North Sumatra has a declining Infrastructure pillar.
Input
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Output
Support
| East Ventures - Digital Competitiveness Index 2021
Comparison of Input and Output Sub-index Scores
EV-DCI study compares the difference in scores to find out how many inputs have been used to produce the output of digital economy development.
The development and distribution of adoption and use of skills in digital technology in Indonesia is quite good as most provinces tend to be more
competitive in Input than Output (Input score being greater than Output score). However, most provinces have not been able to extract optimal economic
benefits from digital technology.
West Java has the biggest distance between Input and Output, at 66.3
and 43.8, respectively
It has great human resource potential to build a digital economy, from the large
number of students and digitalization education programs to the high use of and
expenditure on ICT. Unfortunately, this potential has not been utilized optimally to
encourage the Economy, Entrepreneurship, and Productivity pillars, as well as
Employment in the digital economy sector. Bali, East Kalimantan, and Bangka
Belitung experienced the same thing.
Only Jakarta and West Sulawesi have higher Output scores than input
Jakarta is very competitive in providing jobs and entrepreneurial opportunities, has
a productive and conducive business environment for the development of the
digital economy, and has the ability to recruit more human resources in the digital
economy sector. For West Sulawesi, the higher Output score also serves as a
reminder for the province to improve the aspects that relate to the Input subindex, such as adding more digitization study programs and increasing the use of
and spending on ICT.
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| East Ventures - Digital Competitiveness Index 2021
Digital Competitiveness
According to the Nine
pillars of EV-DCI
From 2020 to 2021, the distribution of the scores for the 34 provinces have become increasingly even.
This resulted in an increase in the median score for most of the pillars
The highest increase in the median number is for the Infrastructure, Finance, and ICT Expenditure pillars. Only one pillar’s
intermediate number decreased - Regulation and Local Government Capacity.
The score comparison graph shows certain pillars have a more even distribution of scores, such as ICT Utilization,
Employment, and Infrastructure. There are also pillars where the gaps between scores are quite big, such as
Entrepreneurship and Productivity, Finance, and Human Resources.
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| East Ventures - Digital Competitiveness Index 2021
Digital Competitiveness – Sub-index Input
Human Resources: This year, West Java again holds the highest score
It has a number of well-known universities that produce personnel relevant to the
digital economy such are the Bandung Institute of Technology and IPB University in
Bogor. Relevant educational universities are centralized in Java and several large
provinces in each region.
ICT Utilization: Relatively even, the adoption of ICT is accelerated by
social restrictions from the Covid-19 pandemic
It is supported by relatively affordable device prices and cellular access tariffs.
However the gap between lower ranks is becoming more prominent which are
mostly provinces in the eastern Indonesia, closely related to the availability of
supporting infrastructure.
ICT Expenditure: People’s willingness to pay for their ICT needs is
increasingly becoming equal between provinces
The highest score increase is driven by Remuneration and Wages for Workers in the
ICT sector per capita. The pillar also depends on the cost of living for example,
Yogyakarta, despite having the highest use of ICT, has the lowest ICT Expenditure,
while West Papua shows relatively low use of ICT, but has high ICT Expenditure.
Input
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Output
Support
| East Ventures - Digital Competitiveness Index 2021
Digital Competitiveness – Sub-index Output
Economy: The distribution is very unequal but slightly more even than
the previous year
Digital economy still concentrated in the capital city, Jakarta. In recent years,
national GRDP growth in digital-related sectors has always been above the average
national economic growth. During the Covid-19 pandemic, a number of digital
sectors such as information and communication (Infokom) have grown positively,
the trend is certainly an important signal that the digital economy has great
potential to go faster and contribute greatly to the economy in the future.
Entrepreneurship and Productivity: This pillar has the highest gap
between provinces’ scores and Jakarta still holds the highest score,
increasing from 88.2 to 100 (It has the highest score for all indicators)
For the province as a whole, the pillar reflects Indonesians increasingly rely on digital
technology. Although the conditions in other provinces are not as intense as in
Jakarta, in general, they will also experience an increase in digital transaction
activities and fintech lending in 2021.
Employment: Shifting from manual labor towards skilled workers as it
is gradually being reduced and replaced by digital technology
.
The province with highest Employment pillar score are Jakarta, Banten, and Riau and
these are where digital sectors generate many job opportunities and rapid growth of
digital economy as more and more people use the internet.
Input
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Output
Support
| East Ventures - Digital Competitiveness Index 2021
Digital Competitiveness – Sub-index Support
Infrastructure: Digital economy infrastructure, e.g. strong 3G and 4G
signals and stable electricity connections, are more evenly distributed
Jakarta is again the highest with a score of 100 followed by Bali, East Java, and the
other top 10 positions are filled by all provinces in Java. Coordinating Minister for
Economic Affairs Airlangga Hartarto has said that in a number of regions, this
country still lacks inter-island connectivity, especially in Eastern Indonesia.
"Therefore, we support the development of the Palapa Ring satellite project and
optical fiber technology in 3T areas (outermost, frontier, and remote)," he said.
Finance: Unequal level of financial literacy and the availability of
financial facilities in eastern areas, especially in remote areas
The lowest positions are occupied by Papua and West Papua as their scores have
also dropped over the past year, this is quite alarming. To encourage equal
distribution of financial literacy and digital transformation in Indonesia, OJK, which
oversees the national financial system, has three strategies for accelerating digital
transformation in the financial sector: building digital capacity, increasing financial
and digital literacy, and digitizing business processes.
Local Government Regulation and Capacity: Unfortunately, the Local
Government Regulation and Capacity pillar is the only one in the EVDCI with a score distribution that has become more unequal in 2021
.
The scores are highly related to the Regional Government Implementation
Performance Evaluation Index (EKPPD) and gross enrolment rates for high
schools/vocational schools and universities.
Input
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Output
Support
| East Ventures - Digital Competitiveness Index 2021
Perspective
What is the ministry’s strategy in developing the tourism and creative economy through digital
platforms and accelerating digital transformation?
There are 196.7 million internet users in the country; that’s 73.7 percent of the population. The millennials and
“zillennials” are the largest market for tourism and also the biggest consumers of creative goods. Traveling and
purchasing of local technology-driven creative products through digital platforms will hopefully help sustain tourism and
the creative economy.
The thousands or tens of thousands of diasporas abroad could be used as small ambassadors to market our tourism and
creative economy products. With the help of digital platforms, this method could be a game changer, as they could serve
as an intermediary for cooperation between our ecosystem at home and those who are digitally literate abroad.
We want inclusive cooperation with overseas markets, as well as partnerships with global players such as Google, Baidu,
Expedia, TripAdvisor, and others because these digital players are an unstoppable trend.
Challenges for business owners in the tourism and creative economy sector
Digital Platforms Are Key
to Boosting Tourism and the
Creative Economy
Minister for Tourism and Creative Economy
Sandiaga Salahuddin Uno
Human Resources
Marketing
As they need innovative and
proactive human resources,
government will provide training
and networking.
The government has initiated
several programs and events by
using big data and a targeted
promotion strategy to curate,
incubate, and train business owner.
Capital
The government can facilitate
better access to capital and P2P
lending for business owners.
“By 2022, 18.6 million business units will be digitally connected.”
Page 26 of 68
| East Ventures - Digital Competitiveness Index 2021
Perspective
How does BKPM take advantage of digital economic growth and transformation to encourage
investment?
In 2018, BKPM implemented the integrated electronic business licensing service (OSS system), as regulated under PP
No.24/2018. Since the start of the pandemic here in March 2020, all public service activities relating to licensing have not
met any obstacles because they have been done online.
Investment realization in the transportation, warehousing, and telecommunication sectors did really well from the first to
third quarter of 2020. Domestic direct investment (PMDN) realization ranked first at IDR 73.1T, while foreign direct
investment (PMA) ranked third at US$ 2.45B. Indonesia has attracted the interest of global technology giants such as
Amazon Web Services, Google Cloud, and Microsoft. This proves we are the place of choice to invest strategically.
How implementation of the Omnibus Job Creation Law affect the investment development of
Indonesia’s digital economy and attracting investors
Indonesia, the Country
of Choice for Global
Technology Giants
Investment Coordinating Board (BKPM)
Chairman
Bahlil Lahadalia
Business licensing can only be done through the OSS system as a single portal, using the risk-based licensing approach.
Every business activity is classified based on its level of risk and for low-risk business activities only receive a business
identification number (NIB) as proof of identity and legality.
OSS-RBA (risk-based approach) process, which will replace the ongoing OSS 1.1 and include the issuance of licenses on
behalf of ministers, governors, and regents/mayors under the OSS system.
Convenience for foreign manpower (TKA) at tech startups (Under Chapter 4 Article 81), which eliminates the
requirement for employers to provide a foreign manpower utilization plan (RPTKA) for them who are needed for
production activities that have been halted due to an emergency, vocational activities, startups, business visits, and
research for a certain period.
“Hopefully world-class digital investors such as Amazon, Microsoft, and Google will invest more in
Indonesia to stimulate the country’s digital ecosystem in then next five to 10 years.”
Page 27 of 68
| East Ventures - Digital Competitiveness Index 2021
Perspective
How do KADIN entrepreneurs take advantage of digital transformation to develop their business
toward industry 4.0?
There are two types of digital transformation carried out, that was already planned before Covid-19, and that happened
during the pandemic. Most undertake digital transformation because they have to maintain productivity and continue
bringing in revenue to the company despite pandemic-induced policy constraints. They are adopting technology for
remote working purposes and transformation to increase sales through online platforms.
How implementation of the Omnibus Job Creation Law affect the investment development of
Indonesia’s digital economy and attracting investors
Practical implementation of the Omnibus Job Creation Law to ensure adequate investment flow.
The Pandemic Forces
Entrepreneurs Toward
Digital Transformation
KADIN Deputy Chairwoman
and Sintesa Group CEO
Shinta W. Kamdani
Relaxation of investment market access, facilitation, and incentives for investment in digital
infrastructure outside Java to ensure the optimization and equal distribution of digital economic.
Education and technical guidance for national MSMEs to market and trade their products online,
both on national and international digital platforms and human resources transformation as they are
also needed so they are more adaptive and fluent in using the latest technology.
Improvement of business and investment ecosystem, particularly in data privacy, data exchange,
clarity and transparency of regulations, and access to domestic funding for Indonesian startups.
“Most of them undertake digital transformation because they have to maintain productivity and
to continue bringing in revenue to the company despite pandemic-induced policy constraints.”
Page 28 of 68
| East Ventures - Digital Competitiveness Index 2021
Perspective
As an investor, what are some strengths, weaknesses, and benefits you identify in the digital
economy sector in Indonesia?
It brings efficiency, speed, and despite many
good initiatives from governments;
Population does not have
good internet access
75M
This is important since it relates to financial inclusion
The issues to achieve it more quickly
and precisely are the needs of
socialization and strengthening human
resources through training (Increasing
number of human capital who are
skilled at coding
By encouraging digitalization in Indonesia, Sinar Mas Group has created two tech hubs located in BSD
Tangerang and Nongsa Digital Park in Riau Islands. Various companies have joined, such as Microsoft,
Huawei, Unilever, and Traveloka in addition there are many campuses such as Prasetiya Mulya University
and Bina Nusantara University in BSD. This ecosystem has become more well integrated over time and
will get more mature and will grow even faster after the pandemic.
Tech-Hub
Development Creating
Digital Ecosystem
Senior Advisor of
Sinar Mas Digital Ventures
Franky Oesman Widjaja
In October 2020, China announced that 26-27M people were lifted out of extreme poverty. They solved
the problem by systematically thinking through the entire value chain. They taught about everything
from how to supply better products to how they can be sold to the market. Digitalization has helped the
value chain, combining offline and online technology like the closed-loop system business model.
As an agriculture company we control the value chain from the upstream, where we look for superior
seeds when planting, apply good agricultural practices, ensure to minimize oil loss when brought to the
factory, and find the best market. Digitalization has helped us to achieve very complete and efficient
supply chain and we also use it to help inefficient small companies by providing access to good seeds,
access to technology, and access to financing.
“As a large company, digitalization has allowed us help small, inefficient companies to compete.”
Page 29 of 68
| East Ventures - Digital Competitiveness Index 2021
Chapter 3 Analysis of Regional
Competitiveness
Page 30 of 68
| East Ventures - Digital Competitiveness Index 2021
At the province level,
provinces in Java lead
almost all of the pillars
of EV-DCI
Outside Java and Bali, the provinces with
the next highest EV-DCI scores are quite
scattered in Sumatra, Sulawesi, and
Kalimantan. Provinces with low EV-DCI
ratings are also not concentrated in
certain islands, but are evenly distributed
across all parts of Indonesia, except Java.
This shows inequality does not occur
between the western and eastern
regions, but between Java and non-Java.
Inequality between Java and Non-Java
1
Page 31 of 68
Java is the most
competitive
Island
2
All Java Provinces
occupy the top 10
positions
3
Bali & Riau
Islands reach the
top 10 positions
| East Ventures - Digital Competitiveness Index 2021
DKI Jakarta
Digital Economic Center
with the Best
Performance
1st
EV-DCI 2021 Index:
Same position as last year
ICT Utilization
85.02
Maximum Entrepreneurship and
Productivity Score
As the nation’s capital, Jakarta’s high DCI
score is supported by its digital
infrastructure where the access of 3G
and 4G connectivity is available in every
area of DKI Jakarta.
100
Maximum Digital
infrastructure Score
100
Business in Jakarta that
utilize e-commerce1
Jakarta’s digital economy
cumulative growth to Q3-20
Digital financial service
transaction increased in Q3-20
12020
97%
ICT Utilization
11%
Entrepreneurship &
Productivity
2X
Digital Infrastructure
Cellphone ownership & internet access has also earned Jakarta’s
perfect score.
Supported by high ratio of residents who use the internet for their
main jobs & high value and volume of electronic money transactions.
Every area in Jakarta has access to both 3G & 4G connectivity.
E-Commerce Statistics
Page 32 of 68
| East Ventures - Digital Competitiveness Index 2021
West Java
Abundant Human
Resources to Drive
Digital Economy
The province remains the most superior
in the availability of digital HR. However,
the high HR pillar score has not been
optimally utilized and translated as
added value for the digital economy.
Low output score compared to DKI
Jakarta & Banten indicates that HR are
not conducting digital economy activities
in the region, but in other areas.
2nd
EV-DCI 2021 Index:
Same position as last year
In the past 2 years..
have been installed free wi-fi by
700 villages
the government
have used social media as
900 villages
communication tool
village-owned enterprises have
1.1k entered the digital marketplace
>40%
digital economy growth in
West Java during Covid-191
Perspective
“In the past, migration to digital had
to be motivated, now migration to
digital is being forced by the Covid-19
pandemic. Those who do not want to
be forced to move to digital will surely
be on the losing side.”
1Bank
Indonesia
Page 33 of 68
How is the development of digital economy in West Java progressing amid
Covid-19? Which sector has become the priority to accelerate digital
transformation?
Through the Digital West Java vision, which is technically divided into two: Smart City and
Smart Village. Roadmap toward Digital West Java: First, is building on the success of Smart City
in cities and urban areas. Second, achieving success in digitally-accelerated villages.
We use digital transformation in West Java for three purposes: to control and reform the
bureaucracy, observe and operate infrastructure digitally, to communicate and connect to the
public. The problem in West Java is education. We need to educate conventional business
players so they are willing to see digital platforms with a new perspective & ready to carry out
post- Covid-19 transformation.
West Java Aims to Be Number 1 in
Digital Economic Growth
Governor of West Java
Ridwan Kamil
| East Ventures - Digital Competitiveness Index 2021
East Java
Digitalization of MSMEs
is Key Driving Economy
3rd
The strongest pilar remains to be
the infrastructure
MSMEs are the engine of the East Java
economy as it accounts for 98.9 percent
of all business units. The main
determining factors for the success of
MSMEs here include restructuring of
organizations into a corporation
(corporatization), connectivity with ecommerce and digital payments
(digitalization), and access to finance for
business expansion.
East Java made it a priority to launch
educational and training programs to
improve the overall quality of its human
capital.
Page 34 of 68
EV-DCI 2021 Index:
Same position as last year, despite
declining scores in several pillars
74.91
Employment has improved the
most
39.77
Some construction projects initiated by
East Java’s provincial government, which
have been delayed due to the pandemic,
are set to resume in 2021
To usher in Industry 4.0, priority
programs for education and training
development are directed through the
revitalization of training centres (BLK)
infrastructure
| East Ventures - Digital Competitiveness Index 2021
Bali
Soaring Score Thanks to
Improved Digital
Infrastructure
4th
Entrepreneurship and
Productivity and Employment
experienced highest increase
It is undeniable that COVID-19 has had an
impact on Bali’s economy, due to the
decline of foreign tourist arrivals. During
the pandemic, only the information and
communication sector grew positively in
2020 which is supported by adequate
digital infrastructure. Workers, too, have
moved to the digital sector.
Bali Provincial Government is optimizing
the use of QR-codes for economic
efficiency.
Page 35 of 68
EV-DCI 2021 Index:
Moved up by 3 places with highest
score increased by 7.1 points
2nd highest infrastructure score
nationwide
82.42
7%
Predicted increase in demand for
labor in digital sector
Adequate digital infrastructure is one of
the driving factors for increasing
entrepreneurship in the Information and
Communication sector
Apart from the Digital Infrastructure, Human Resources and
Finance, and Regulations also contributed to increasing
entrepreneurship in Bali’s information and communication
sector.
Bali’s government has also optimized the
use of QR codes, which are expected to
continue to encourage economic
efficiency, accelerate financial inclusion,
and advance MSMEs
With the issuance of Surat Edaran (Circular) No.3355/2020 on
the protocol of living in the new normal era, non-cash
payments will be required in 14 business sectors.
| East Ventures - Digital Competitiveness Index 2021
Banten
Needs to Encourage
MSME Players into the
Digital Sector
5th
Based on a Bank Indonesia report in
November 2020, the transition of MSME
players to online business channels was
still very low in Banten. The use of the
internet and business digitalization
needs to be encouraged for MSMEs to
promote their products and services in
order to improve Banten's economy in
general.
To improve Banten’s economy, the
digitalization of MSMEs needs to be
further supported and encouraged.
Page 36 of 68
EV-DCI 2021 Index:
Same position as last year
Human Resources
experienced the
biggest decline from
last year
Infrastructure
receiving highest
score at 70.93
followed by ICT
utilization at 60.88
COVID-19 has caused the majority of
economic sectors to grow negatively in
Banten, with only a few sectors showing
positive growth
Information and communication sector and financial services
that grew steadily at 9.11% and 2.95% respectively, in the
Q3-20. To help the economic recovery, Banten’s provincial
government has applied for a loan from PT Sarana Multi
Infrastruktur (SMI) to develop the province’s infrastructure,
health, and education.
The pandemic has also caused a decline
in MSMEs performance, especially the
micro and subsistence businesses
The decline in sales has caused business owners to have cash
flow problems while also having limited access to financial
institutions.
| East Ventures - Digital Competitiveness Index 2021
DI Yogyakarta
Highest Use of ICT Led
to Increased Capital
Value
6th
Highest score nationally on ICT
Utilization pillar but low on ICT
expenditure
DI Yogyakarta's main strength still rests in
the ICT Utilization pillar, which has the
highest score nationally. But, the level of
digital literacy in the province is still low.
Government continues to innovate to
develop the region’s potential. One way
is through the Jogja Smart Province
program to optimizing technology
utilization and data integration.
DI Yogyakarta Provincial Government is
developing its digital potential through
the Jogja Smart Province program.
Page 37 of 68
EV-DCI 2021 Index:
Dropped by 2 places
Highest score in regulation pillar,
supported by gross participation
rate in diploma to bachelor’s
degree (S1)
Infrastructure pillar in 4th place.
Continues to innovate, one way is
through Jogja Smart Province
Highest ICT Utilization Score with
developments in the use of digital
technology, but not fully optimized to
improve community welfare
The ratio of households with computers is in the 2nd position
nationwide and the ratio of the population accessing the
internet from their homes is 1st . Developments in the use of
digital technology in entrepreneurship has increased by about
1.5x. However, the level of digital literacy is still low and ICT
utilization has not been fully optimized as capital, reflected in
the absence of a significant increase in Economy pillar.
DI Yogyakarta’s government also
encourages improvement of the MSME
sector, especially with digitalization
Some ways are by assisting MSMEs to market their products
through the SiBakul application and the formation of villageowned enterprises, which are oriented toward the
development of MSMEs and tourist villages.
| East Ventures - Digital Competitiveness Index 2021
Riau Islands
Great Potential in
Western Indonesia’s
Digital Economy
The rise in rank and the high growth of
the digital economy cannot be separated
from the region’s geographical factors
(proximity to Singapore, particularly
Batam) which becomes investment
destination for Singaporean investors.
One such investment in the digital
economy sector is the development of
the Nongsa Digital Park.
Perspective
“Companies such as AIA, FWD and
WebImp have already set up their tech
talent at Nongsa and will continue to
add more to their teams in Nongsa in
the future.”
Information & Communication
sector YoY growth in Q3-20
Page 38 of 68
19%
7th
EV-DCI 2021 Index:
Moved up by 3 places
Most prominent changes in the
Entrepreneurship and
Productivity and HR pillars
Regulation pillar declines by 7.06
points
Best score is for the ICT utilization
67.91
How are Singapore & Indonesia working together in developing industries in
Batam? What kind of training programs do you offer to develop HR in Batam?
Singapore and Indonesia have worked closely together for more than three decades to develop
Batam and the surrounding islands as a major manufacturing hub in Southeast Asia. In recent
years, Singapore has also expanded its collaboration with the Riau Islands Province (Kepri) to
include the rapidly growing digital sector, Nongsa Digital Park (NDP) in Batam. The NDP will be
a "digital bridge" between Singapore and many of the fast growing digital players in
Indonesia. allowing Singapore-based companies to develop their services and products by
leveraging Indonesian tech savvy young talents.
Singapore also supports the growth of the digital economy in Batam by organizing training
programs, one of which is the train-the-trainer program conducted by the Singapore Polytechnic
for IT lecturers in Indonesia.
Nongsa Digital Park, a Center for
Creative and Digital Industry in
Batam
EDB Managing Director
Chng Kai Fong
| East Ventures - Digital Competitiveness Index 2021
Central Java
Significant Hurdles to
Improve the Digital
Sector Workforce
8th
Low remuneration also impacts
the Employment pillar, at 3rd
lowest position nationally
30.65
75.23
High Digital Infrastructure score1
Perspective
1
Additional info to the previous version released
Page 39 of 68
Significant low ICT Expenditure,
at the bottom 4 nationally
30.24
Of all provinces in Java, Central Java has
the lowest EV-DCI score which indicates
an inability to compete with other
provinces in Java. This is driven by its
significantly low ICT Expenditure caused
by low average household expenditures
on ICT and low remuneration or wages
for workers in the information and
communication sector.
“The business has now changed to be
anti-mainstream, working online with
a laptop has become the norm. “
EV-DCI 2021 Index:
Dropped by 2 places
How is the development of the digital economy in Central Java amid the
pandemic? Which sectors are the local government’s focus and priority to
accelerate digital transformation for economic recovery?
The conditions during the pandemic are a disruption, like the Industrial Revolution 4.0. People
cannot trade as usual. They could trade in the digital marketplace, but because they did not
know how to use it, their sales declined. Therefore, we have conducted research to find out
what kind of training is needed, including how to sell products on e-commerce. The pandemic
has accelerated the digital transformation, and it has been my job to rush everyone into the
digital era. We have created a working space called Hetero Space and we created a Virtual
Expo for MSMEs and invited experts to take parts. Bank Jateng has also sponsored loans with
the lowest interest rates at 7% versus everybody else at 12%. Through #LapakGanjar, I also
endorse local products online1. The creative industry in Central Java has tremendous
potential. At the time of this pandemic, we introduce the existing potential. Now we need to
figure out which products will sell well overseas.
The Great Potential of Central
Java’s Creative Industry
Governor of Central Java
Ganjar Pranowo
| East Ventures - Digital Competitiveness Index 2021
South Sulawesi
The Connecting Bridge
for Digitalization in
Eastern Indonesia
9th
EV-DCI 2021 Index:
Same position as last year and
highest in eastern region
province
The best pillar is Infrastructure
increased by 10.38
60.88
As the main gateway to the economy in
Eastern Indonesia, infrastructure
development is being aggressively
encouraged to develop the potential of
the region. In 2020, the regional
government received appreciation for its
ability to build infrastructure in remote
areas.
Second best pillar is ICT
utilization as seen by increase in
Economy pillar
58.48
.
South Sulawesi’s primary driver of growth is the city of Makassar
The presence of the Makassar Digital
Valley indicates positive sentiment for
digitalization among businesses in
South Sulawesi.
Makassar is considered or recognized as the “capital city” of eastern Indonesia. The number of universities and students with
digital-related majors gives the province sufficiently qualified human capital to face challenges in the digital economy. However,
there is still a need for improvement to support the input aspects of human resources so they can become more competitive
and significantly contribute to Indonesia's digital economy.
The number of startups emerging from this region, alongside the presence of Makassar Digital Valley (MDV), indicate that
business people in Makassar are increasingly connected and committed to digital transformation. The development of startups
needs to be supported by improvements in the cultivation of supportive financial institutions and regulations.
In the financial sector, a Bank Indonesia report showed that South Sulawesi has one of the highest growth
rates for QRIS implementation in Indonesia
Page 40 of 68
| East Ventures - Digital Competitiveness Index 2021
East Kalimantan
Digital Education Needs
a Push
10th
The best pillar is ICT Utilization,
increased by 10.38 points
65.63
53.05
As one of the provinces with abundant
natural resources, East Kalimantan has
become home to large companies. In
terms of digital infrastructure, East
Kalimantan is classified as superior.
Strong foundations from the use of ICT
and good infrastructure still needs to be
converted into added value in the
Economy and Productivity pillars. This
can be encouraged by strengthening the
business sector’s move towards digital.
.
The digital infrastructure in East
Kalimantan is pivotal in pushing the
business sector’s move towards digital
transformation.
EV-DCI 2021 Index:
Dropped by 2 places with
increasing score
Fairly high score in Infrastructure
Low scores in Entrepreneurship
and Productivity, HR and Economy
pillars
There are efforts to accelerate the digital infrastructure by the provincial and central governments as a form
of preparation for Indonesia’s new capital city
There are still a lot of people who have not taken advantage of the internet nor digitized their businesses
This is caused by the current condition of existing human resources. Higher education institutions with digital study programs
are still very limited, so the number of students with digital abilities remains very low. This has impacted the contribution of the
information and communication sector to the economy of East Kalimantan.
Strong foundations from the use of ICT and good infrastructure still needs to be converted into added value
in the Economy and Productivity pillars
This can be encouraged by strengthening the business sector’s move towards digital.
Page 41 of 68
| East Ventures - Digital Competitiveness Index 2021
Maluku
Potential Driver for
Digital Economy
Development in East
Indonesia
Ambon, the capital city of Maluku, is the
backbone of the economy and the centre
of trade for Eastern Indonesia. The city
has great potential in the transition and
transformation to a digital economy.
With the use of sophisticated
technology, Maluku’s product can be
optimized for export.
The strategy for digitizing MSMEs in
Maluku was encouraged by the Maluku
Provincial Government to increase
online transactions in the community.
24th
EV-DCI 2021 Index:
Moved up by 3 places
Employment Pillar has the
highest score, rank 8th nationally
45.09
Improved in Infrastructure pillar,
but still the 5th lowest nationally
35.78
Government continues to encourage young people in Maluku to become entrepreneurs, that will further
develop the creative economy, through the establishment of a startup incubator in Ambon city.
Geographical conditions and population distribution have posed challenges in providing digital
infrastructure in eastern Indonesia
The poor infrastructure has also caused its ICT Utilization to remain relatively low -- the second lowest nationally. To support
regional development, many improvements are needed in digital literacy, equitable connectivity access, and resource capacity.
A number of strategies for digitizing MSMEs have been implemented in Maluku
#MariKatongBalanjaOnline encourages MSMEs to connect with online applications, which will then increase online transactions.
Some 11 assisted MSMEs and 397 non-assisted MSMEs have joined the program, and it will continue to be developed in the
future.
Page 42 of 68
| East Ventures - Digital Competitiveness Index 2021
At the city level, areas
in Java still dominate
the highest rankings of
EV-DCI
The selection of these 25 cities is based
on a combination of cities with the
highest level of competitiveness and the
largest populations in Indonesia. These
cities are part of the 157 cities and
regencies studied using the EV-DCI
methodology.
Java region dominates
>50%
of the 25 selected
cities are located in
Java
Page 43 of 68
9 out of
top 10
cities are located in
Java
Denpasar &
Makassar
are the only 2 cities from
outside of Java in the top 10
| East Ventures - Digital Competitiveness Index 2021
Bandung
The Center of Digitalization in West Java,
Ready to Equal the Capital City
Bekasi
Jakarta’s Satellite City Continues to Increase
Its Digital Competitiveness
Its Entrepreneurship and Productivity pillar has improved by 1.6x compared to the
previous year which indicates the adequate digital infrastructure has been well
optimized, especially by MSMEs. This is supported by high ratio of population that use
the internet. Local government is actively partnering with e-commerce to help MSME
develop their business digitally. Bandung needs to pay attention to the HR pillar, which
is the lowest and experienced a decline indicates there has been no significant
improvement in the quality of digitally-literate HR.
The city has experienced improvements in all pillars except for the Economy pillar and
slightly in the Employment pillar. The increase in score is mostly due to the ICT
Expenditure and Entrepreneurship and Productivity pillars, which have almost
doubled the previous year. The presence of The Bekasi Creative Center, a business
incubation center for creative economy players, has had a positive impact on the
development of MSMEs. The local government is also working with banks & business
actors to increase the potential of the digital economy.
EV-DCI 2021 Index:
Same position as last year
2nd
Bandung’s local government is
actively partnering with ecommerce to help MSME
players develop their business
digitally.
Page 44 of 68
EV-DCI 2021 Index:
Moved up by 3 places
3rd
Bekasi’s local government has
established The Bekasi
Creative Center and is
improving access to banks in
order to increase its digital
economy potential.
| East Ventures - Digital Competitiveness Index 2021
Denpasar
The Island of Gods’ Digital Potential
South Tangerang
Jakarta's Support City, Moved Up 3 Places
As the capital of Bali province, its EV-DCI score has increased the most compared to
other cities. its ICT Utilization and Infrastructure score was the highest, at 79.88 and
90.37, respectively. The local government is promoting digital innovation by combining
a cultural and local wisdom-based creative economy. With a high level of ICT
Utilization, this city still needs a breakthrough in regulations, infrastructure, and
financial services to support the growth of the digital ecosystem and tourism
development.
The increase in its score is mostly contributed by the Entrepreneurship and
Productivity pillar. The local government has prepared a strategy to empower and
improve the quality of cooperatives and MSMEs by providing training so they can
compete in the new normal ecosystem. However, it needs to continue to improve in
providing infrastructure so the high-performing ICT Utilization can be optimized to
improve the economy in the city.
EV-DCI 2021 Index:
Moved up by 19 places
4th
Denpasar’s local government
is promoting digital innovation
by combining a cultural and
local wisdom-based creative
economy.
Page 45 of 68
EV-DCI 2021 Index:
Moved up by 3 places
5th
South Tangerang’s local
government is providing
training to MSMEs to help
them compete in the new
normal ecosystem.
| East Ventures - Digital Competitiveness Index 2021
Surabaya
The Digital City of East Java
The city, which is the center of industry and trade in East Java, also experienced the
largest increase in the ICT Expenditure and Entrepreneurship and Productivity pillars.
The Financial pillar also shows a relatively better score, driven by high economic
activities, causing the distribution of LKD agents to be concentrated in the city.
However, its high potential does not go hand in hand with its digital capacity, which
decreased compared to the previous year. The local government is also trying to
improve the younger generation’s digital abilities by building partnerships with
technology companies.
EV-DCI 2021 Index:
Dropped by 3 places
6th
Surabaya’s local government is
trying to improve the younger
generation’s digital abilities by
building partnerships with
technology companies.
Page 46 of 68
Depok
Great Potential for Digital Talent in West
Java
Like Bekasi, it has experienced an increase in scores in almost all pillars, except for
Economy, Labor, and Regulation. Depok has great potential in terms of digital talent, as
seen by the increase in human resources, although it is still relatively small. The
Cooperatives and MSMEs Agency in conjunction with the Depok City Market are
planning to develop a special marketplace to increase the reach of local MSMEs. With
the increasingly progressive use of digital technology, Depok needs to innovate to
improve its supporting infrastructure in order to accelerate its digital economy.
EV-DCI 2021 Index:
Dropped by 2 places
7th
Depok has multiple initiatives
in place, such as the Smart
City Depok, in order to
improve its digital economy.
| East Ventures - Digital Competitiveness Index 2021
Tangerang
Great ICT Potential Needs to be Maximized
Yogyakarta
Digital Potential from the MSME Centre
As an industrial centre in Java, the highest pillars are Infrastructure and
Entrepreneurship and Productivity. In 2020, the local government focused on
economic recovery and prepared training for businesses to adapt to new digital
business models. As a centre of commerce, Tangerang’s government continues to
improve in the Regulation aspect and it has experienced a 10.71 increase to 45.39. ICT
Utilization and Expenditure have not been optimally utilized to advance the
economy. The potential for digital resources also needs to be worked on so the city can
take advantage of the momentum of digital transformation.
High contribution of the ICT Utilization, Infrastructure, and Regulation pillars. The ICT
Utilization and Regulation pillars are also the highest nationally. Yogyakarta, which is
known for its creative potential, is an independent region that derives income from its
resources. The Entrepreneurship and Productivity pillar experienced the highest
increase, supported by the high number of the population using the internet for
online sales. The local government also continues to initiate innovation, together with
the Bank of Indonesia and the Beringharjo Initiative Foundation, they have
collaborated to form the Smart Traditional Market (SEMAR) movement to help SME
enter digital market.
EV-DCI 2021 Index:
Dropped by 1 place
8th
Tangerang’s local government
has prepared training for
businesses to adapt to digital
platforms.
Page 47 of 68
EV-DCI 2021 Index:
Moved up by 1 place
9th
Local government together
with BI and the Beringharjo
Initiative Foundation, has
collaborated to form the
Smart Traditional Market
(SEMAR).
| East Ventures - Digital Competitiveness Index 2021
Makassar
The Potential of a Digital Center in Eastern
Indonesia
Malang
Encouraging MSMEs to Enter the Digital
Market
Its best pillar is Infrastructure followed by ICT Expenditure and ICT Utilization. The
local government encourages the use of digital technology to improve the local
economy. In 2020, in collaboration with a mobile technology company, the government
provided digitalization training to 1,000 MSMEs, assisted by the National Handicraft
Council, the Cooperatives and MSMEs Agency and the South Sulawesi Trade Agency.
With Makassar Digital Valley, as business incubator centre, government provided
programs to develop digital talent in Makassar.
This increase was influenced by the Financial pillar. The highest ranking that supported
this growth is the Entrepreneurship and Productivity pillar. This is in line with Mayor
Sutiaji's program to encourage MSMEs to enter the digital market to realize Malang’s
goal to be a smart city also supported by improvement in its Infrastructure pillar, which
is rising and this pillar has the highest score. It received a perfect score for the ratio of
villages with strong internet connectivity.
EV-DCI 2021 Index:
Moved up by 2 places
10th
The Makassar Digital Valley, a
business incubator center, has
played a key role in driving the
growth of the digital economy
ecosystem.
Page 48 of 68
EV-DCI 2021 Index:
Dropped by 4 places
13th
Malang’s local government
encourages MSMEs to enter
the digital market.
| East Ventures - Digital Competitiveness Index 2021
Smart City: Utilizing Information Technology to Manage the Pandemic
The “Smart City” is a city and regency-wide development plan that utilizes information technology to effectively and efficiently connect, monitor and
control various resources throughout the city. A significant part of the attributes of the Smart City concept is the cultivation of a smart government,
which uses information technology to improve the quality and effectiveness of the government in providing public services.
Page 49 of 68
| East Ventures - Digital Competitiveness Index 2021
The Ministry of Communication and
Informatics (Kominfo), alongside
several ministries, initiated the
Movement Toward 100 Smart Cities
in 2017-2019
The Minister of Communication and
Informatics, Johnny G Plate, said the
movement requires collaboration
between the central government, local
governments and industry players to
realize Indonesia's dream of becoming a
digital nation.
A 2017 study by the Coordinating Ministry for Frost & Sullivan note that the spending allocation for
Economic Affairs showed that the urgency of Smart City development in 2025 will reach US$ 2T.
implementing Smart City concept
Technology spending allocation initiatives for the
development of smart cities around the world are
expected to continue to increase to US$ 189.5B in 2023.
Urban Population Growth Rate
2.75%
Indonesia Urban Population
56.7%
In 2020
During the pandemic, implementing the
Smart City concept has been increasingly
useful to deal with the outbreak
Many local governments are implementing the
Smart City concept through the use of the
internet of things (IOT) technology to connect
with communities, taking away the need to
meet face to face. They also use the Smart City
approach to monitor, control and prevent Covid19 outbreaks through a centralized information
system to spread information through official
government websites.
Page 50 of 68
68.6%
In 2035
Several regional governments have developed command centers to provide effective and efficient services
to various communities during the pandemic
DKI Jakarta – Cooperation with the Indonesians at Harvard group to develop Covid-19 Likelihood Metric (CLM) to carry out rapid
testing to trace and determine whether someone is following the procedure. The government is also working with Nodeflux to
develop artificial intelligence to automate public mobility monitoring to identify and monitor crowds and enforce people to keep
their distance and wearing mask. In addition, government collaborate with Botika, DuitHape, Grab, Tokopedia, Bukalapak,
Shopee, and Gojek in September 2020 to help solve urban problems and provide the best services for its community.
West Java – Introduced Pikobar (Covid-19 Information and Coordination Center) to distribute information to the public regarding
the pandemic. Collaboration with Bukalapak and Tokopedia to provide tax payment services for residents through their apps.
Depok – The city administration is developing the Kampung Siaga Covid-19 application, which is integrated in the Depok Single
Window (DSW) application to establish a coordination forum with the Covid-19 Task Force to overcome the pandemic.
| East Ventures - Digital Competitiveness Index 2021
Banyuwangi
“In the midst of the Covid-19 pandemic,
the government-initiated digitalization
programs has gained momentum and its
benefits have been reaped.“
Even prior to the COVID-19 pandemic,
Banyuwangi’s regency administration has
actively adopted digitalization in a
number of sectors over the past few
years. The development of this digital
ecosystem has been fruitful during the
pandemic.
Impact of the Covid-19 pandemic on the economy
and the digital economy transformation process in
Banyuwangi
Banyuwangi’s regency administration has
accelerated digitalization in many sectors long
before the pandemic began
From March to May 2020,
Starting with the construction of a network infrastructure
(optical fibers) in each village. We have also prepared the Smart
Kampung application to bring public services closer to the
village level to make sure we reach every part of Banyuwangi,
and as a solution to the distance between regions.
•
Number of consumers decreased by 73.8%
•
Total sales fell by 74.1%
•
17.3% of businesses closed
Online marketing has become a staple alternative for
MSMEs to overcome decreasing sales and consumers.
During the pandemic, opportunities for digital
transformation have been widening, thanks to banyuwangimall.com which focuses on the development and marketing
of MSMEs, banyuwangitourism.com which focuses on
digitizing tourism, and various other efforts to maintain
Banyuwangi’s economy amidst the pandemic.
Through Smart Kampung application, the local government can
record of residents who leave Banyuwangi and collect data on
the distribution of social aid (bansos) for residents affected by
the pandemic, and online reporting for residents who have not
received social aid will speed up the distribution and the
accuracy of targeted beneficiaries..
Perspective
How are the local government and the private sector collaborating to develop Banyuwangi’s digital
economy?
The local government provides policies and a competitive space for the private sector to accelerate the digital economy. It also
provides stimulus to develop the digital economy through the provision of online services to every offline micro business;
increasing marketing access, product quality, process efficiency and resource management; ensuring the availability and
quality of internet infrastructure; strengthening local applications; and optimizing the use of information and communication
technology (ICT).
Collaboration with startups has been carried out since before the pandemic, from building a marketplace, banyuwangi-mall.com
with BNI bank; cooperating with fintech firms LinkAja, Dana, Paytren; mentoring with Gojek and Grab; and collaborating with
the Warung Pintar startup to empower the community's economy. We are implementing a strategy to empower local MSMEs to
sell on Warung Pintar, which also functions as a place to find information on tourism.
Page 51 of 68
Digitalization of Public Services
Through Smart Kampung
Application
Banyuwangi Regent 2010-2021,
Head of Regency Administrations
Abdullah Azwar Anas
| East Ventures - Digital Competitiveness Index 2021
Chapter 4
The Digital Revolution
in Various Sectors
Page 52 of 68
| East Ventures - Digital Competitiveness Index 2021
Information and
Communications
Technology (1/2)
The Engine Accelerating
the Digital Economy
As the backbone that sustains the growth
of the 4.0 industry and of the digital
economy, ICT has grown widely and
rapidly. However, there is still a high
disparity in the infrastructure
development among regions.
EV-DCI median for infrastructure pillar
The score gap between Java
and Papua-Maluku regions is
Growth of digital infrastructure
54.29
Ratio of villages with 4G signal
55.16
2x YoY
45.3
+7.54 YoY
All regions in Indonesia will be
connected to the internet
network by
ICT expenditure
33.34
2022
+2.37 YoY
Perspective
“Seeing the potential of the digital
economy, we feel the need to
collaborate with other BUMNs. They
need digitization, we need expansion.
For example, we collaborated with Bio
Farma to create a Covid-19
vaccination system.”
What is Telkom’s role in supporting government programs related to
infrastructure development and accelerating national digital transformation?
From the infrastructure side, we have seen a surge both in demand and in usage. On the
demand side, IndiHome subscribers have seen a growth rate of 50% compared to prepandemic. Our subscribers have also been using the internet 20-30% more during the
pandemic.
We anticipated this transformation so we prepared the necessary infrastructure to support this
digital acceleration. Our primary challenge is that our investment must match our priorities and
make sense economically.
We may be known as a digital connectivity provider, but we are also expanding into other
fields, including digital platforms, big data, cloud services and data centers.
Page 53 of 68
Telkom Migrating to Digital
Platforms and Services
Digital Business Director at PT
Telkom Indonesia Tbk
Muhammad Fajrin Rasyid
| East Ventures - Digital Competitiveness Index 2021
Information and
Communications
Technology (2/2)
The Engine Accelerating
the Digital Economy
As internet traffic continues to increase,
Indonesia needs an adequate
connectivity network and information
technology infrastructure. The
unaddressed populations include the
12,548 villages and 104,000 schools with
no internet access.
The government has created 4 agendas to accelerate National Digital Transformation for 2020-2024:
1
Accelerate the development of the digital infrastructure by collaborating with several industry players,
namely to build middle-mile, and last-mile networks
2
Develop the adoption of digital technology by reorganizing the frequency spectrum for the development of
5G technology, digitize TV, develop a national data center to realize the Indonesian One Data policy, and to
form a national monitoring center to monitor the quality of telecommunication services
3
Significantly develop tech talent
4
Facilitate the licensing process for telco companies’ infrastructure deployment, providing legal certainty in
the process of digitizing national TV, and prepare the Personal Data Protection Bill for further legal ease
Perspective
“The key is to always keep adapting,
keep your ears to the ground and to
try to understand what your userbase
really wants and how they consume
that content.”
Page 54 of 68
The Covid-19 pandemic has affected the economy in various sectors. How has
the media industry been affected? How big is the impact of the pandemic on the
media industry, especially online media?
In our perspective, good and sustainable media firms are firms that are able to control its
content creation and content distribution. In light of Covid-19, non-digital media players have
been severely affected. However, with the acceleration in digitalization, digital media players,
including IDN Media, has accumulated a significant increase in users. Some of our products
have increased its userbase by five to seven times. The Yummy cooking application, for example,
experienced a sudden surge in downloads because people cannot go out to eat. As for IDN
Media itself, we have been helped a lot from the digital acceleration that has taken place in
Indonesia. We were helped because we built an ecosystem business model, meaning that if
some of our products are negatively impacted, other business units will cross-subsidize it. This
helps generate significant revenue.
Technology Helps Deliver Better
Experiences for Consumers
Founder & CEO of IDN Media
Winston Utomo
| East Ventures - Digital Competitiveness Index 2021
E-Commerce
A Great Leap During the
Pandemic
The large-scale social restrictions (PSBB)
imposed in March 2020 encouraged
sellers to open online sales channels to
stay competitive and afloat. MSME
players flocked to open online stores. The
volume of shopping transactions and the
number of sellers in the e-commerce
industry have also experienced a
significant jolt.
EV-DCI median for entrepreneurship
and productivity pillars
% growth in demand by sector1
Health & beauty
80%
+30ppt YoY
Food & beverages
58%
+17ppt YoY
18.4M
In the post-pandemic
era, e-commerce players
will map potential
markets or products that
are pertinent to
consumer interests.
The beauty e-commerce
company, Sociolla,
responded to this
increase in demand by
opening warehouses in
21 cities around
Indonesia.
MSMEs are expected to go
digital by the end of 2022
Perspective
“It won't take two decades to catch up
with China. With the rise of the
transformation generation, the
number of digital transactions will
accelerate in the next 5-10 years.”
1SIRCLO
Page 55 of 68
The pandemic has changed people's shopping habits, and made them go digital.
What innovations and strategies has Tokopedia made in facing this change?
Our pandemic strategies have been undergoing ongoing revision and adaptation to the
circumstances because the urgency changes every month. From Tokopedia’s perspective, we see
innovations coming from MSMEs themselves, and Tokopedia simply gives them a new home.
Our concern is how we can generate demand to meet the influx of supply that has come
online. We use special offers, e.g. Ramadan Extra (during Ramadan), Waktu Indonesia Belanja
(every 25th of the month), free shipping promotion and other stimulus programs.
When the government launched the #BanggaBuatanIndonesia campaign, we started
consolidating local products in an online shopping festival and presented them through an
entertainment package, giving MSMEs exposure.
Pandemic Giving Birth to A
Digitally Transformed
Generation
CEO & Co-Founder at Tokopedia
William Tanuwijaya
| East Ventures - Digital Competitiveness Index 2021
Logistics (1/2)
Prime Growth Moment
for Goods Delivery
Logistics has become a booster and key
supporter for the improvement and
growth of complementary verticals. The
scope of players has continued to widen
ranging from packaging, containers,
warehousing, couriers, freight
forwarding, trucking, and rail, sea and air
transportation. Logistics facilities that
have become increasingly advanced
extend a positive impact on the nation’s
economic growth.
EV-DCI median for economy
pillar
Economy pillar
30.82
+3.57 YoY
GRDP growth of warehousing,
transportation support, post, and
courier sub sector
61.25
The government is working to improve the investment
climate and competitiveness of national logistics by issuing
the Presidential Instruction (Inpres) No.5/2020 on the
National Logistics Ecosystem Management.
+5.04 YoY
This program includes:
Simplifying the process of government services
Simplifying the payment process of state revenue
Improving the management of ports and distribution
channels
Perspective
“With large-scale social restrictions
(PSBB) limiting mobility, we had to
quickly repurpose our driver partners
to become delivery partners.”
Faced by the challenges of the pandemic, how has Grab taken advantage of the
momentum of digital transformation for future business development?
As a super-app, Grab had to quickly navigate the challenge ahead and decided to repurpose
our driver partners to become delivery partners. With service diversification, driver partners
can focus on being delivery partners.
For driver partners, we immediately launched an innovative Grab Protect program, where
we installed foldable and portable plastic partitions as a safety protocol.
To digitally support MSMEs, we launched the Grab Merchant application, a one-stop solution
that provides a self-registration service, manages employees, branches, stock items and even
promotions. Grab has created opportunities to expand reach by providing Grab Assistance for
unregistered stores, and there is also Grab Kiosk, which embraces millions of online kiosks.
Page 56 of 68
Transforming Driver Partners to
Delivery Partners
President of Grab Indonesia
Ridzki Kramadibrata
| East Ventures - Digital Competitiveness Index 2021
Logistics (2/2)
Prime Growth Moment
for Goods Delivery
The pandemic has had a direct impact on
logistic sector. In general, the
transportation sector is under pressure
as transportation and warehousing
businesses experienced the deepest
contraction. On the other hand, courier
and delivery services experienced rapid
growth due to the large spike in ecommerce transactions, necessitating the
goods delivery business.
Logistics startup Waresix is growing rapidly through
its innovative first-mile and middle-mile services.
The logistics ecosystem now consists of 40K trucks
and 375 warehouses across Indonesia and serves
>250 corporations in various fields.
In the midst of the pandemic, Warung Pintar has also
continued to grow rapidly. By the end of 2020, Warung
Pintar worked with >300K stall owners in 65 cities and
doubled their distribution facilities from 5 warehouses to
11 warehouses.
Perspective
“For Unilever Indonesia, partnerships
with MSME players have been an
important part of the ecosystem and
growth since our inception. Therefore,
the rise of MSMEs from this economic
setback is something that must be
supported by all parties.”
How is Unilever taking advantage of the digital transformation to develop its
business towards Industry 4.0?
Digital transformation has been one of Unilever Indonesia's main agendas over the last few
years as it is pivotal to create businesses that are relevant and able to compete in the future. We
have applied digital transformation all throughout our value chain.
We have strengthened our data analytics capabilities and opened up new channels to enter
the market, including e-Commerce and B2B channels. This is important to ensure our products
reach more consumers.
Digitalization does not only make this process faster, more accurate and more rounded, but also
allow us to eliminate non-value added activities. Our efficiency can ultimately be reinvested in
the development of our brands.
Page 57 of 68
Digitalization Allows Shipping
Costs To Be More Efficient
President Director of PT Unilever
Indonesia Tbk
Ira Noviarti
| East Ventures - Digital Competitiveness Index 2021
Health
Telemedicine, A Pivot
For The Healthcare
Industry
The Covid-19 pandemic is driving the
healthcare sector to adapt quickly,
providing services virtually to the
community. The rising use of
telemedicine has popularized health
startups. For startups and investors, the
telemedicine market is a white space.
Telemedicine users have jumped sharply
>300K
# telemedicine users by the end
of April 20201
>10x
Increase in # Halodoc users in
2Q20 vs 4Q19
50%
MoM increase in Alodokter
traffic in March 2020
Perspective
“As more funds are allocated towards
healthcare and public awareness of
healthy living increases, digital
healthcare can now become an
important contributor to GDP.”
What will Halodoc do to continue to develop health services through the use of
technology?
Halodoc has been offering products that are expected to not only overcome disparities in
relation to the access to health services, but also make it easier for people to take advantage
of our insurance and drugstore links. We are maximizing this by continuing to expand the
collaboration. The Bain & Company survey shows 91% of respondents in Asia-Pacific are
interested in using digital health services if facilitated by offices or insurance.
To reach more users, we are partnering with more health facilities and pharmacies in a
number of cities. Apart from strategic partnerships, we are also collaborating with various
brands.
1Ministry
of Health
Page 58 of 68
In the future, Halodoc will continue to collaborate with many partners and assess other
opportunities that can be worked on together, for example in the field of diagnostics.
Survey Shows Telemedicine’s
Huge Untapped Potential
CEO & Co-Founder at Halodoc
Jonathan Sudartha
| East Ventures - Digital Competitiveness Index 2021
Education
Learning from Home,
The Starting Point of the
Educational Revolution
When the pandemic hit in early March
2020 and large-scale social restrictions
(PSBB) were implemented, the teaching
and learning process were changed to
online long-distance learning system
(PJJ). This sudden shift in learning
environments require much adjustment
for teachers, students, parents and
guardians alike.
In June 20201:
Government’s supports on the online learning
process
1
School operational assistance (BOS) funds
2
Subsidy for internet quotas
3
Schools digital optimization program, consisting of:
(1)
digital platforms optimization
(2)
learning content for the TVRI TV program
(3)
digital learning materials and education models, and
providing educational facilities in the form of ICT
equipment
68.8M
students were learning from
home
4.18M
teachers and lecturers were
teaching remotely
Perspective
“Ruangguru is working with
telecommunication service providers
to provide cheap, and even free data
packages, so students in Indonesia can
study online without being
constrained by credits.”
1Ministry
of Education and Culture
Page 59 of 68
The government implemented large-scale social restrictions (PSBB), which
resulted in the cessation of face-to-face learning. What are some of Ruangguru's
strategies to seize this opportunity?
Ruangguru’s Free Online School was launched one day after the government announced the
learning process should be carried out online and remotely. This can be accessed on the
Ruangguru application and, of course, it's free, so anyone can easily access it. It has been used
by >10 million students since first launched. On the first day it was launched, more than 1.5
million students attended our online school.
In July, Ruangguru also launched a classroom or distance learning management system that
teachers and schools can use for free Apart from providing a one-year mentoring and training
program for 3,800 teachers in Indonesia, Ruangguru also provides free access to online libraries
for all teachers. This service has been accessed by more than 150,000 teachers in Indonesia.
Learning Online With No Worries
Over Phone Credit
CEO & Co-Founder at Ruangguru
Belva Devara
| East Ventures - Digital Competitiveness Index 2021
Tourism (1/2)
Back on the Rise Post
Pandemic
This sector is not only a mainstay of the
national economy, but also contributes
greatly to foreign exchange earnings,
business development and employment.
Before the pandemic hit, Indonesia’s tourism sector had made some progress…
# Foreign Tourist1
In 2019, tourism sector has:
Contributed
Employed
5.5% to total GDP
13M
workers
Perspective
“We understand that air travel is not
just about flying, but also about the
need for a sense of security and
comfort for passengers.”
1BPS
Page 60 of 68
What are some strategies and innovations that Garuda Indonesia has created to
deal with the Covid-19 pandemic situation?
In these uncertain times, we must ensure that the business keeps running by increasing the
trust of passengers to fly. Our main focus is to enforce and emphasize safe health protocols.
We have collaborated with the Ministry of Tourism and Creative Economy to implement the
Cleanliness, Healthy, Safety, and Environmental Sustainability (CHSE) campaign; the Safe Travel
Campaign with the Indonesia National Air Carriers Association (INACA); and a number of other
campaigns to gain back user trust. In regards to digitalization, Covid-19 pandemic has changed
people’s habits. This includes the demand to do contactless transactions. We understand that
air travel is not just about flying, but also about the need for a sense of security and comfort in
the process of getting to the destination of choice. Therefore, we strive to provide a safe flying
experience, preparing information on mobile applications and digital magazines and by
providing passenger support services after flights.
Digitalization Helps Improve
Services for Consumers
President Commissioner of PT
Garuda Indonesia Tbk
Triawan Munaf
| East Ventures - Digital Competitiveness Index 2021
Tourism (2/2)
Back on the Rise Post
Pandemic
Just as digitalization in the tourism sector
experienced rapid growth, the onset of
the Covid-19 pandemic challenged and
transformed the whole industry. The
government anticipates that the tourism
industry will rebound strongly after the
pandemic ends.
The Covid-19 pandemic impact on the tourism sector:
Changing habits and needs of the community:
# foreign tourists1
4M
1
New tourism trends (e.g. solo traveling or travel in small
groups and exploration of local tourism through land
transportation)
2
Tourists pay more attention to hygiene and health protocols
at their destinations.
–74.84% YoY
The government estimates the recovery of the tourism industry and businesses will take place gradually
with the implementation of the new normal policy and the ongoing vaccination process For this reason, the
tourism ministry and other ministries are working together to prepare the necessary infrastructure,
especially in the 5 priority tourist destinations, to welcome a surge of tourists in the future
Perspective
“Traveloka has presented several
breakthroughs and developed its
services while prioritizing the safety
and health of our users and
employees.”
The pandemic has affected the tourism and accommodation sectors drastically.
What are Traveloka's innovations and strategies in facing this tough challenge?
Traveloka has been affected by the pandemic. It experienced the worst business decline in the
company's history - the number of refund requests jumped 10 times higher than normal. In the
past few months, we have enforced cost control and streamlined performance marketing
efforts and cloud computing allocations. We have also actively invested in customer service,
allocating more than 1,000 employees to handle user requests.
Traveloka strategically adapts itself to the market conditions and changes in user (consumer)
behavior. Traveloka has presented several breakthroughs and developed our services while
prioritizing the health and safety of our users and employees.
1Ministry
of Tourism and Creative Economy
Page 61 of 68
Adapting to Changing Consumer
Behavior
Traveloka Co-Founder
Albert Zhang
| East Ventures - Digital Competitiveness Index 2021
Fintech Payment (1/2)
Digital Innovation and
Democratizing Access to
Millions
The use of digital payments and demand
for fast, cheap and easy financial services
were rapidly growing among
Indonesians even before the Covid-19
pandemic hit. Now, following shift of
consumption patterns to online
platforms, more people are changing
their habits in fulfilling their needs by
conducting digital transactions.
Bank Indonesia developed the Indonesian Payment System
(SPI) 2025 vision
1
2
3
4
5
6
In October 20201:
IDR 18.79T
Supporting the integration of national digital finance
Supporting banking digitalization
Guaranteeing the interlink between fintech and
banking
Guaranteeing the balance between innovation and
consumer protection
Integrity and stability as well as fair business
competition
Ensuring national interests in the digital economy and
finance between countries.
e-money transactions
392.88M
transaction volume
Perspective
“The main strength of digital
payments in Indonesia is the
innovative industry players and
adaptive consumers.”
1Bank
Indonesia
Page 62 of 68
What is BI’s view on digital transactions and payments during the pandemic? Is
there a potential in further accelerating the transformation of the digital
economy?
Since the beginning of the COVID-19 pandemic in Indonesia, the nominal value of electronic
money transactions, dominated by non-bank payment services, has grown rapidly, reaching
38% YoY in 2020, amid a decline in the nominal value of card transactions, which still require
face-to-face interaction.
Banking has also continued to self-organize and transform, in terms of products, business
processes, and culture. Digitalization initiatives are being accelerated so they meet the
increasingly customer-centric needs. During 2020, the volume of digital banking activities
increased by 37.7% YoY, providing impetus for the acceleration of digital economy
transformation in Indonesia.
BI to Navigate Economic
Transformation & Digitalization
Head of Bank Indonesia Payment
System Policy Department
Filianingsih Hendarta
| East Ventures - Digital Competitiveness Index 2021
Fintech Payment (2/2)
Digital Innovation and
Democratizing Access to
Millions
3 key elements in ShopeePay's
strategy to increase transactions are:
The use of digital payments is expected
to become a permanent habit shift and
will continue to accelerate in the future.
The presence of fintech has also forced
banks to transform. Not only do they
have to make digital banking products,
banks also need to carry out innovations
such as collaborating with e-commerce
and fintech platforms.
(3) becoming one of the payment
services on the Shopee platform
to build a sustainable ecosystem.
(1) promotions such as discount
vouchers and cashback of up to
IDR 1 per transaction
(2) collaborating with more merchant
partners from various categories
GoPay has focused on
understanding what users
needed during the
pandemic by launching
Jaminan Proteksi Ekstra
untuk Saldo.
The company also
collaborated with other
digital services such as
YouTube, Viu, Iflix, and
HBO Go to provide a
payment system.
On the other hand, DANA has focused on ensuring the security of
user transactions. The non-cash payment process is carried out by
scanning a quick response code (QR), so there is no physical contact
between the seller and the buyer.
Perspective
“One of the challenges in maintaining
sustainable business growth is
creating synergies between digital
business owners and financial service
providers.”
Page 63 of 68
How will Bank Mandiri take advantage of the momentum of digital
transformation amidst the pandemic for its own business development?
Bank Mandiri's aspirations toward digital banking are carried out through the implementation of 4
strategies:
(1) Strengthening the foundations of the digital transaction infrastructure; (2) Developing
products that can provide end-to-end digital banking services (3) Providing customers with the
best digital experience from our existing channels to support their digital lifestyle; and (4)
Leveraging the digital ecosystem and participating in open banking initiatives to expand
customer access to bank products through an external ecosystem that collaborates with fintech
and e-commerce.
Becoming The Best in Modern
Digital Banking
President Director of PT Bank
Mandiri Tbk
Darmawan Junaidi
| East Ventures - Digital Competitiveness Index 2021
Fintech Lending &
Investment (1/2)
A Collaborative and
Pivotal Moment For
Fintech Lending and
Banking
The pandemic provides momentum for
fintech lenders to optimize its role in
providing access to loans.
EV-DCI median for finance pillar
46.23
+2.58 YoY
Improvements are seen in the Finance pillars,
especially in the Financial Inclusion Index
indicator. Fintech has provided the
infrastructure necessary to apply via online
platforms. The process has become far easier,
more accessible and far more simplified.
While financing for online loans has continued to increase monthly,
reaching IDR 137.66T in October 2020, the quality of loans decreased1.
Default rate on loans (TWP) past due 90 days, or the ratio of NPL, rose
from 4.2% in March 2020 to 8.9 percent in August 20201. Even so, online
loans were still in demand amidst the pandemic. MSMEs required
greater access to working capital loans to keep their businesses running,
opening up opportunities for fintech lenders to provide them with loans.
Perspective
“Fintech has been proven to support
economic recovery, as it has helped
both individuals and SMEs to make
transactions.”
1OJK
Page 64 of 68
How can OJK take advantage of the digital transformation momentum to
develop the financial institution ecosystem and help accelerate national
economic recovery?
To take advantage of the momentum of digital transformation to develop the ecosystem of the
financial services institutions (LJK), OJK has three strategies in the financial sector. First, building
a large digital capacity to enable the undisrupted use of digital financial products and
services. Second, increasing financial and digital literacy. Third, implementing digitalization in
business processes.
OJK also supports fintech development by collaborating with the industry to design special
programs that support the development of MSME potential through fintech products. For
example, the development of fintech products for credit management, crowdfunding services,
service aggregators, financial products, and several other products.
The Importance of Digital Literacy
In The Age of FinTech
Head of Digital Financial
Innovation Group at OJK
Triyono Gani
| East Ventures - Digital Competitiveness Index 2021
Fintech Lending &
Investment (2/2)
A Collaborative and
Pivotal Moment For
Fintech Lending and
Banking
# of capital market or retail investors
participating in the trading of stocks,
mutual funds and bonds increased
rapidly throughout 2020. >50% of
investors own accounts at fintech selling
agents1.
Perspective
“The contribution of local investors to
investment funds needs to be
increased to make up 50-60 percent of
the total.”
1DailySocial.id
Page 65 of 68
In December 2020:
3.87M
+56% YoY
capital market investors based
on SID
Most widely used fintech products1
1
Digital wallets
at 70.7%
2
PayLater
at 45.2%
3
Investments
at 28.4%
As an investor and actor in the capital market, how do you see the pandemic
providing momentum to accelerate the digital economy?
I think offline-to-online is an irreversible trend. Looking at the stock performance of companies
related to e-commerce and logistics, that are mostly private and non-listed, the increase is
extraordinary. Companies that adopt technology in Indonesia such as Tokopedia, Gojek, and
Bukalapak also receive extraordinary benefits. The share price of the company I invested in,
Shopee, has risen from US$ 30 to US$ 240 since the pandemic began.
Currently, since people are doing online transactions, the preferred payment method has
changed to non-cash, and there are less and less transactions using ATMs. In my opinion, digital
adoption in the next two to three years will be extraordinary. The pandemic is accelerating
technology adoption and this is the new normal. Technology companies will contribute
significantly to the national economy.
Regulators Need to Embrace
Digital Economy Players
Commissioner at IDX
Pandu Patria Sjahrir
| East Ventures - Digital Competitiveness Index 2021
Chapter 5
Recommendation
Page 66 of 68
| East Ventures - Digital Competitiveness Index 2021
The Covid-19 pandemic has provided momentum for relevant stakeholders to accelerate
business development through building a comprehensive digital ecosystem.
To accelerate digital transformation in society and to take advantage of this momentum
for the prosperity of the nation, a number of steps can be taken by the central
government, local governments and digital economy players.
Page 67 of 68
| East Ventures - Digital Competitiveness Index 2021
Recommendation
Preparation of Qualified Human Resources (HR)
HR is one of the primary pillars with an unequal
distribution of scores between provinces in EV-DCI 2021.
Regional governments need to intentionally prepare and
train qualified human resources to create a sustainable
human capital supply for the digital infrastructure to
continue to grow. Improving HR quality is divided into
three main parts: basic skills, which focus on digital
literacy skills; intermediate and technical skills, which
include the ability to use and keep up with the latest
technology; and advanced skills, which are a necessity
when doing business in the digital economy.
Developing a Comprehensive Digital Ecosystem
To be an attractive investment opportunity for domestic
and global investors, the ecosystem needs better data
protection and regulatory certainty. A good digital
ecosystem can drive domestic and international
investment traction in technology. Efforts to improve
regulations, both by the central and local governments,
are urgently needed to assist the process of accelerating
the transformation of the digital economy.
The creation of a comprehensive digital ecosystem could
be assisted by multi-stakeholder forums in each region.
This could take the form of an informal but regularly
held forum to discuss ICT development and adoption in
the region.
Page 68 of 68
Increasing Productivity and Added Economic
Value
The Entrepreneurship and Productivity pillar has the
most unequal distribution of scores between provinces.
One of the reasons is the low level of productivity in
terms of ICT Utilization. Increasing productivity and
strengthening the business ecosystem in the digital
sector are strategic steps in the digital economic
transformation, especially within MSMEs. In addition,
entrepreneurship and business management training
are needed and exposure to technology will increase the
company’s added economic value as a whole.
Digital Infrastructure Development
This pillar has the highest score in the EV-DCI 2021
findings but it still has big gaps. This shows the
infrastructure is not evenly distributed throughout the
regions. Therefore, the government should encourage
the development of digital infrastructure to reach all
regions in Indonesia to accelerate digitalization. In this
regard, special attention needs to be paid to Papua,
whose Infrastructure pillar score is lower than other
provinces. For most of the other areas, since access to
digital infrastructure is no longer an issue, efforts must
be focused on utilizing this infrastructure optimally.
Improving the Geographical Distribution of
Digital Competitiveness
Not every place can be equally competitive. A variety of
regions in Indonesia have representatives in the list of
top 15 provinces with high digital competitiveness.
However, the Maluku-Papua region has yet to be
represented. To improve the distribution of digital
competitiveness, it is necessary to improve the
performance of the indicators of leading provinces in
Maluku-Papua.
Equally important is the gap between Jakarta, which is in
first place, and the second-tier or runner-up provinces. It
is less about reducing Jakarta's competitiveness and
more about increasing the competitiveness of the
second-tier provinces.
| East Ventures - Digital Competitiveness Index 2021