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None of the changes enabled by Digital Technologies comes without accompanying organizational changes—management mind-sets, organizational behavior, operating cultures.
Indonesia has great economic potential, with abundant resources, a large young workforce and rapid urbanization. Indonesia recorded an impressive economic growth rate over the past decade, averaging 5% per year. The country has made tremendous strides in social progress and economic management and is looking to its next target of becoming a middle-income country by 2025.
Strengthening the digital economy will play a pivotal role in reaching Indonesia’s full potential. With more SMES (Usaha Kecil Menengah) engaged in the digital economy through broadband, e-commerce, social media, the cloud, and mobile platforms, they can have faster growth in revenue and employment, be more innovative and more competitive in the ASEAN Economic Community.
Based on economic modelling and World Bank research, we find that doubling broadband penetration rates and lifting digital engagement by SMESs could increase Indonesia’s annual economic growth by 2% – the additional growth it needs to achieve the 7% target required to be a middle-income country by 2025.
SMEs in Indonesia are well placed to reap the benefits of digital transformation. They are already using basic forms of technology to achieve similar goals. Government policy can play a significant role in accelerating the benefits of the digital economy – primarily through increasing broadband access and by improving coordination of existing government programs, payments facilities, access to investment and facilitating access to new inexpensive digital tools