As the 4^th largest potential AI market, future projections estimate a contribution of USD 350 billion to ~12% of Indonesia’s GDP (Gross Domestic Product) in 2030. However, the journey ahead is steep for the nation to unleash true digital transformation. According to Oxford’s AI Readiness Index 2023, Indonesia ranked 42^nd out of 193 countries, significantly behind neighbouring nations Singapore (2^nd) and Malaysia (23^rd). The AI Readiness Index 2023 also highlights specific improvement areas.  

• Government pillar ranks 25 with a score of 76 out of 100  
• Technology pillar ranks 41 with a score of 43 out of 100
• Data & infrastructure pillar ranks 64 with a score of 63 out of 100  

With an overall average score of 61, this reveals critical gaps that must be bridged by the government and the nation’s industries to harness AI’s full potential, especially in the data and infrastructure pillar. A strategic, well-structured roadmap is essential for Indonesia to boost its digital economic growth.

The Four Pillars of Focus

1. Data Infrastructure and Management
Prioritize robust data infrastructure development and management practices to ensure data is representative and readily available, laying the groundwork for AI technologies to thrive. Achieve this by developing national data standards as well as centralized and decentralized data repositories to ensure quality, accessibility and data sharing through open data initiatives.

2. Talent Development
Fostering a continuous learning and innovation culture is crucial for Indonesia to master AI technologies and compete globally. Attract and retain AI talent with competitive incentives and create opportunities for practical experience through partnerships.

3. Research and Innovation
Continuous research and innovation are necessary to develop new AI technologies and algorithms and ensure Indonesia becomes a pivotal contributor to the global AI landscape. Translate AI research into practical applications across various sectors by collaborating with academia and industry to develop AI research centres and innovation hubs.

4. Funding and Investment
Accelerate AI integration into various sectors, support AI startups, encourage enterprise-level adoption, and facilitate R&D through substantial funding for long-term sustainable AI adoption. Funding and investment also incentivize private sector investments and the government to allocate significant funding for AI development and cross-sectoral AI integration.

The Role of Policy and Regulation

Strong policies and regulations concerning data protection and privacy are aspects Indonesia must not overlook while focusing on these pillars. This is necessary to prevent data misuse and build public trust in AI technologies. Trust is fundamental for the widespread acceptance and use of AI nationwide. ‍

Towards a Digital Economy Vision in 2045

The path forward involves collaboration across government, industry, academia, and civil society to create an ecosystem that supports AI innovation and adoption. By focusing on the outlined pillars and underpinning them with strong policies and regulations, Indonesia can leverage AI as a catalyst for transformation. 5 areas should be focused on to achieve this vision:

1. ‍Health service: Accelerate the development of smart hospitals and strengthen health security infrastructure in response to the post-pandemic. ‍
2. Bureaucratic Reform: Leverage digitization of services for a citizen-centric public service model ‍
3. Education and Research: Improve online schooling systems and address the digital divide, facilitating broader education access through AI. ‍
4. Food Security: Strengthen food security by applying smart technologies in agriculture, fisheries, and natural resource management. ‍
5. Mobility and Services: Develop 98 smart cities and 416 smart districts as part of Indonesia’s 100 Smart Cities Movement.

AI sparks immense potential for Indonesia to meet its Digital Economy Vision in 2045 A and secure a prosperous, technologically advanced future for all Indonesians. The time to act is now.

References

1. AI Readiness Index 2023 - Oxford Insights. (2024, February 5). Oxford Insights. https://oxfordinsights.com/ai-readiness/ai-readiness-index/
2. The 4^th AI Innovation Summit. (2020). Stranas AI.  https://ai-innovation.id/strategi