Summary: This paper assesses Indonesia’s digital economy over a 12–24 month horizon. Its central thesis is that the priority has shifted from launching new projects to orchestrating existing “digital rails”, connectivity, data centres, payment systems, and public digital services, so they convert into real productivity, digital-services exports, and measurable improvements in state capability. We begin with a diagnosis of seven binding constraints: (1) talent gaps and uneven digital maturity; (2) connectivity cost/quality, including last-mile and mid-band 5G spectrum; (3) readiness of the National Data Centre and inter-agency interoperability; (4) demand volatility and tighter funding that require disciplined unit economics; (5) uneven digital inclusion and financing; (6) sporadic MSME/cooperative digitalisation; and (7) logistics frictions in e-commerce fulfillment and returns. We propose a flywheel, rails → trust → demand → value capture, and a TOWS portfolio that combines pro-investment spectrum release and fibre deployment; adoption of Digital Public Infrastructure (DPI) (digital identity, e-signature, registries, data exchange); security hardening of national data centres before migration; life-event–based public service redesign; cross-border payments for MSMEs; micro-fulfilment logistics; and large-scale micro-credential academies for civil servants, educators, and workers. Three 2026 scenarios (acceleration, baseline, headwinds) are mapped to portfolio governance and a quarterly KPI scorecard. The conclusion argues that consistent execution on connectivity policy, interoperability-security, and high-value use cases will spin the flywheel and turn digital assets into inclusive national competitiveness.
Introduction:
Converting Digital Assets into Advantage
Indonesia’s
digital economy has entered a more mature phase. Foundational rails, nationwide
connectivity, data centres, cashless payments, and digital public services, are
far stronger than five years ago. The key challenge is no longer to multiply
pilots but to synchronize these rails so they yield real productivity
gains, expand exports of digital and creative services, and raise the quality
of public service delivery. A large domestic market, high digital-government
maturity, widespread QR-based payments, and satellite connectivity for remote
regions provide a robust base. Yet the next leap depends on disciplined data
governance, cybersecurity, and system-level interoperability.
Diagnostic: Seven Binding Constraints and Their Implications
