ADB allocates funds for studying the impact of disruptive technologies on the Indonesia economy

The Asian Development Bank (ADB) has approved US$750,000 to Indonesia to provide knowledge support and technical assistance to study the impact of disruptive technologies on the Indonesia economy.

The press release from ADB notes that the potential benefits of the digital economy for Indonesia are projected to be significant. Indonesia is among the fastest growing Internet markets in the world. Indicators such as internet traffic, revenue from cloud services, and connected devices (Internet of Things) are growing rapidly.

Indonesian online ride-hailing applications, such as Grab and Go-Jek, are creating jobs, and they often provide better wages and benefits, such as health insurance and access to bank accounts, compared to more traditional jobs.

On the flip side, disruptive technologies may also pose important risks for Indonesia in the form of potential jobs losses in certain sectors and increase in inequality.

Winfried Wicklein, ADB’s Country Director for Indonesia said that ADB’s technical assistance will help map the impact of disruptive technology on the Indonesian economy, both at the aggregate and the sector levels.

“ADB is keen to support the government’s efforts to leverage the benefits of technology, while mitigating risks,” he added.

The government launched the "2020 Go Digital Vision" in 2015, which aims to make Indonesia the largest digital economy in the Association of Southeast Asian Nations (ASEAN) region by the year 2020. It includes targets like getting 1 million fishermen and farmers to go online by 2019 to improve their access to markets as well as information and raise their income levels.

The 14th economic reform package issued last year included a comprehensive roadmap for promoting e-commerce. It aims to create 1000 technopreneurs, with total business value reaching US$ 10 billion. The total value of e-commerce is expected to reach US$130 billion. In August 2017, the President of Indonesia signed the country’s e-commerce roadmap which will be a guide for the central and regional governments to establish policy and create action plans for the acceleration of e-commerce.  It assigns responsibilities and sets key targets to be achieved by government institutions over the next two years.

The roadmap has eight major components: funding, taxation, consumer protection, education and human resources, communication infrastructure, logistics, cyber security and the implementing organisation.

The government has also started targeted measures and programs to promote Fintech and other technologies as part of its strategy to reduce poverty and inequality.

Suahasil Nazara, Chairman of the Fiscal Policy Agency at Indonesia’s Ministry of Finance, commented, “Indonesia stands at the crossroad of global technological changes,” “Better knowledge on this fast-evolving topic will be essential for informing enabling policy and investment decisions.”

Featured image: yohanes budiyanto (source: CC BY 2.0)

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