## A Digital-Savvy Indonesia

_IMF Blog, February 23, 2018_

## Source details

**Canonical URL:** [A Digital-Savvy Indonesia](https://www.imf.org/en/blogs/articles/2018/02/23/a-digital-savvy-indonesia)

## Other formats

- [Markdown version](/en/blogs/articles/2018/02/23/a-digital-savvy-indonesia/index.md)
- [Structured JSON version](/en/blogs/articles/2018/02/23/a-digital-savvy-indonesia/index.json)
- [Bundle manifest](/en/blogs/articles/2018/02/23/a-digital-savvy-indonesia/bundle-manifest.json)

## Bibliographic details
- Authors: Tidiane Kinda, Ting Yan
- Published: February 23, 2018

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### Population and demographics
- Authors: Tidiane Kinda, Ting Yan
- Publication dates shown: February 23, 2018; February 22, 2018
- Key contextual point: Indonesia has the third largest youth population in the world and 130 million active social media users.

### Digital landscape and impact
- McKinsey estimate: digitization could expand Indonesia’s economy by 10 percent of GDP and add 3.7 million jobs by 2025.
- Recent expansions cited:
  - Use of big data and advanced analytics increased by 60 percent between 2014 and 2015.
  - Number of mobile internet users grew by 13 million (more than 20 percent) between 2015 and 2017.
- Digital financial services and e-commerce trends:
  - The number of people who mostly banked through traditional branches (over 50 percent of their total transactions) dropped from 75 percent in 2015 to 45 percent in 2017 (Indonesia Banking Survey by PricewaterhouseCoopers).
  - E-money has almost quadrupled between 2014 and 2017.
  - Revenues from e-commerce grew by 22 percent between 2016 and 2017.
- Startup ecosystem:
  - Indonesia has over 1,700 digital startups, trailing only the United States, India, and United Kingdom.
  - Example: Go-Jek — founded in 2010 with a fleet of twenty drivers; evolved into a “super app” providing transportation, mobile payments, and food delivery with a fleet that exceeds 400,000 drivers.

### Digital momentum and opportunities
- Indonesia positioned to become the biggest digital economy in Southeast Asia given demographic advantages and growing digital adoption.
- Digital adoption is especially strong among the growing youth population, providing a sizable customer base for digital services.

### Constraints and areas to address (Expanding the digital opportunity)
- Internet penetration and quality:
  - Only a quarter of the overall population uses the internet, giving Indonesia one of the lowest internet penetration rates in the ASEAN region.
  - Although internet is affordable, average quality is low, including the size of the bandwidth per user and the average connection speed.
- IMF annual economic assessment priorities to support the digital economy:
  - Enhancing the country’s infrastructure to access information and technology.
  - Upgrading workers’ skills—particularly digital literacy—to meet the demands of the digital economy.
  - Streamlining regulations and encouraging the entry of foreign firms and skilled labor to boost competition and stimulate innovation.

### Risks and policy balance (Managing risks)
- Identified risks from digitalization:
  - Cyber risks.
  - Large-scale automation can accelerate job destruction and raise income inequality.
  - In the financial sector, emerging technologies, including virtual currencies, could disrupt established financial institutions and lead to a migration of financial activities outside the regulated sector.
- Policy guidance:
  - Strike a balance between addressing risks from digitalization and supporting innovation so policies can help Indonesia reap the digital dividends.

### Events and engagement
- Bank Indonesia and the IMF organized the New Growth Models in a Changing Global Landscape high-level conference in Jakarta on February 27 (year implied by context).
- Indonesia to host the 2018 IMF-World Bank Annual Meetings, providing an opportunity to showcase the country’s digital transformation.

*Source: A Digital-Savvy Indonesia (IMF blog post by Tidiane Kinda and Ting Yan, February 2018).*

---

## Content in this bundle

- **“数字达人”印度尼西亚; IMF博客; 2018 年2 月22 日**
  - [“数字达人”印度尼西亚; IMF博客; 2018 年2 月22 日 (Markdown version)](/external/chinese/np/blog/2018/022618c.pdf.md){rel="alternate" type="text/markdown"}
  - [“数字达人”印度尼西亚; IMF博客; 2018 年2 月22 日 (PDF)](/external/chinese/np/blog/2018/022618c.pdf){rel="external" type="application/pdf"}
- **Indonesia yang Cerdas Digital**
  - [Indonesia yang Cerdas Digital (Markdown version)](/external/lang/indonesian/np/blog/2018/022618i.pdf.md){rel="alternate" type="text/markdown"}
  - [Indonesia yang Cerdas Digital (PDF)](/external/lang/indonesian/np/blog/2018/022618i.pdf){rel="external" type="application/pdf"}
- **Indonesia Banking Survey 2017**
  - [Indonesia Banking Survey 2017 (Markdown version)](/id/en/publications/assets/financialservices/ibs-2017.pdf.md){rel="alternate" type="text/markdown"}
  - [Indonesia Banking Survey 2017 (PDF)](/id/en/publications/assets/financialservices/ibs-2017.pdf){rel="external" type="application/pdf"}

---

## References

- [https://www.imf.org/wp-content/uploads/2018/02/BLOG-1024x550-custormers-at-samsung-Jakarta-IND-Beawiharta-reuters-newscom-rtrlnine513222.jpg](https://www.imf.org/wp-content/uploads/2018/02/BLOG-1024x550-custormers-at-samsung-Jakarta-IND-Beawiharta-reuters-newscom-rtrlnine513222.jpg)
- [https://www.imf.org/wp-content/uploads/2018/02/eng-feb-20-draft-ind-test-1.jpg](https://www.imf.org/wp-content/uploads/2018/02/eng-feb-20-draft-ind-test-1.jpg)
- [assessment](https://www.imf.org/en/Publications/CR/Issues/2018/02/06/Indonesia-2017-Article-IV-Consultation-Press-Release-Staff-Report-and-Statement-by-the-45614)
- [high-level conference](https://www.imf.org/en/News/Seminars/Conferences/2018/01/05/asean-conference)
- [assessment](http://www.imf.org/en/Countries/IDN)
- [Creating Jobs for Indonesia’s Youth: Five Charts That Matter](http://www.imf.org/en/News/Articles/2018/01/26/NA020718-Creating-Jobs-for-Indonesia-Youth-Five-Charts-That-Matter)

_Source: https://www.imf.org/en/blogs/articles/2018/02/23/a-digital-savvy-indonesia_