Indonesia Artificial Intelligence

April 4, 2021

Indonesia Artificial Intelligence : Indonesia is a country poised to see an explosion in their Artificial Intelligence industry.

Indonesia boasts one of the youngest median ages of their population: 30, vs Japan’s 48.4 median age and Germany’s 45.9. With a literacy rate approaching 95% and a geographical location that lends itself to being the perfect next step in the Asian Ai revolution, Indonesia is primed for the future.

Indonesia’s Asian neighbors have led the globe in adopting artificial intelligence in their societies, whereas Indonesia has been significantly behind the technological adoption curve, so far.

However, HSBC’s chief market strategist for Southeast Asia, James Cheo told the Jakarta Post “The most exciting story, if we look at the next decade, is Southeast Asia. The next ten years could very well be the region’s golden age because if it continues to grow, say, at its current pace, it can become the fourth largest economic bloc, behind the US, Europe and China,”

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Indonesia’s young populations will continue to grow the trend of urbanization. Indonesia has been slower to move its rural population to the cities due to the nation’s 14,508 islands. But, that offers potential for Indonesia. As this young population will want to seek jobs to support their families and move to urban environments where the salaries and jobs are plentiful. This in turn will help turn the corner.

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Indonesia’s government announced an initiative in 2018, “Making Indonesia 4.0” which essentially is a government sponsored program that seeks to speed up the automation of the Indonesian society. Through investments in Ai, robotics and technology-based Indonesian firms as well as encourage investment from leading Japanese, Chinese and Korean tech firms.

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The five key points of the initiative are: Internet of things, artificial intelligence, human-machine interface, robot and sensor technology, and 3D printing. Indonesia’s Industry Minister Airlangga Hartato, said of the program, “it will be key to encourage added value and high-technology downstream industries to become a competitive player in the new global context.

In order to turn Indonesia into a competitive nation, it will require the development and integration of connectivity, technology, information and communication. This should lead to a more efficient economy as well as higher quality output in the industry sector.”

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Hartato is a former businessman and engineer. After attending Wharton, Hartator rose to Indonesian business fame through a number of successful tech startups. Hartato hopes the initiative will boost GDP by 1-2% in the next few years, adding to an already impressive 5% GDP growth rate Indonesia has enjoyed over the last several years. Eventually Hartato wants technology to represent more than one quarter of Indonesia’s total economy.

Indonesia’s population is already extremely digital. The population averages 5 hours per day on their phones vs only 3 hours for Japan and 193 million out of a population of 264 million have a smartphone. However, only half of mobile phone users in Indonesia use their phones for mobile transactions. Before 2011, Statista.com shows that less than half of the country even had a mobile phone and less than 10% had smartphone technology.

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Indonesia is already home to a number of Ai firms today. In fact 4 of the globe’s technology unicorns are based in Indonesia. Recently funded Ai firms include Snapcart which just received USD $14m in funding for their smart receipts platform and four conversational Ai firms: Kata.Ai, BJTech, Bahasa.ai & Prosai.ai.

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Sonar Platform is a social media monitoring firm that operates globally and was founded in Jakarta. In fact the Ai scene in Jakarta is exploding, with the government hoping for over 1,000 tech startups by the end of 2020. Neighboring Singapore saw their Venture Capital industry mushroom from $80 million to over $1 billion since 200. So much of that technology growth is already spilling over to Jakarta as a cheaper and newer alternative for investment. Singapore’s growth is a model for where Jakarta can go.

The Coronavirus will undoubtedly slow Indonesia’s economy in the near future. And the government is still strict on foreign talent migrating to Indonesia, out of fears of stealing local jobs, which will slow the tech growth. But, in the long-term, the outlook is quite bright for Indonesia’s Ai future.

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