Challenges& Opportunities:Indonesia’s Big Data & AI Transformation Journey

Challenges& Opportunities:Indonesia’s Big Data & AI Transformation Journey

Author: Rudi Rusdiah, ABDI (Association Big Data& AI) – KOMITE.ID magazine &News Portal

As the fourth most populous countries in the worldand the largest archipelago with17,000 islands to its name, Indonesiafaces a challenge globally when talking about Big Data & AI transformationin the Industrial Revolution (IR) 4.0 era. Indonesia is very diverse, and can be in all stages of the IRsimultaneously. Some tribes in rural islands like Papua and Kalimantan, with their nomadic lifestyles, can still be at the first stage of IR. Other suburban towns and villages could be at the second or third stage, while metropolitan and capital cities have advanced on to the fourth stage.

The growth of Indonesianecommerce is fast and promising, from $ 6.5B (2016) to $ 6.96B (2017)to $8.5B (2018) – 65% of Asean’s$13B share (2018), according to Statista. This is largely due to the influence of4 unicorns –1 in travel sector(Traveloka), 2 in e-marketplace (Tokopedia & Bukalapak) and 1 in Public Transportation ride-hailing sector(Go-Jek). Unfortunately, this has created atrade deficit due to de industrialisation in sectorsthat are unable tofollow the fast pace progress of ecommerce, even though the Ministry of Industry has launched Industrial 4.0.

Although unicorn Go-Jekdoes not own anyvehicles,itboasts thelargest database of supply & demand ride-hailing clients in Indonesia. Its use of Big Data, AI routing and GPS tracking systems has disruptedthe traditional Metreand PagingTaxi industry. Tokopedia and Bukalapak may not own their own merchandise, but they have become one of the largest online shops, disrupting traditional brick-and-mortar stores.. Many new digital transformation logistics companies disrupting the PT Pos, the state-owned postal service. Small fintech dtartupsutilising e-wallets and QR codes have also disruptedtraditional financial services,big andsmall. Big Data and AI will be strategic to many of these enterprises in Indonesia and have proven to disrupt larger competitors that have not prioritised digital transformation.

Although Indonesia has recently rolled out 5G, it’s still in the trial stage before the 5G Frequency auction.Many locals are still accessing Internet via traditional GPRS, as opposed to LTE &5G technology.

According to IDC, Business Data Analytics (BDA) Asia Pacific countries grew 14.4% from $ 14.7B (2018) to $22.2B (2021) leads by leading sectors, i.e. Bank, Logistics, Government, Profesional Service and Telecommunication, which contributed 55% of BDA business– approximately $12.6B. Chinastill boasted the highest growth with BDA $5.5B (2018), followed by Indonesia, whichrecorded the highest growth in Asean (2018) at 19.7%, mainly due to businesses adopting digital transformation, facilitated by Government Industry 4.0 initiative, the 4 Indonesian unicorns and many other business enterprises.Even though neighbouring countries such as Australia, Singapore and Malaysia may face challenges in their digital transformation journey as well, Indonesia has additional geographical challenges on its plate, with more than 60% of its territory comprising water separating thousand of islands, and the need for sea and air toll roads and fibre optics.

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