Indonesia is strategically steering its digital economy transformation towards the ambitious “Digital Indonesia Vision 2045,” a comprehensive blueprint designed to build a more inclusive and sustainable digital economy.
The government’s multi-pronged approach focuses on optimising national priority programmes with technology, strengthening the digital ecosystem through robust regulation, infrastructure, and talent development, and ensuring equitable access to digital opportunities across all regions.
Strategic pillars of digital transformation
The national digital economy transformation strategy is anchored on three main pillars:
Optimising national priority programmes with the latest technology: Digital technology is seen as key to accelerating the delivery and broadening the reach of four critical national priority programmes: Free Nutritious Meals, Free Health Checks, Cash Social Assistance, and Education Transformation. This involves leveraging strong digital infrastructure and advanced tech adoption, such as the SATUSEHAT Mobile digital platform for health check-ups and integrated digital services for education.
Strengthening the digital ecosystem through regulation, infrastructure, and talent: Digital transformation fundamentally requires a supportive environment comprising strong regulation, equitable access, and a skilled workforce. Initiatives like the Digital Talent Scholarship (DTS), which trained over 400,000 individuals in areas like big data, cloud computing, AI, and cybersecurity by 2024, directly address the talent gap. Infrastructure development includes expanding 5G networks, establishing national data centres, and optimising existing backbone networks like the Palapa Ring Undersea Cable Communication System.
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Ensuring equity in the digital economy: Future priorities for a balanced digital economy include strengthening AI governance, expanding infrastructure, investing in digital talent, and improving micro, small, and medium enterprises’ (MSMEs) access to financing. This crucial pillar underscores the government’s commitment to ensuring that the benefits of digitalisation reach all Indonesians, requiring synergistic collaboration among the government, private sector, communities, and society at large.
Key regulatory frameworks: PDP law and beyond
Law No. 27 of 2022 on Personal Data Protection (PDP Law) is a cornerstone of Indonesia’s digital governance. This strategic legislation aims to foster a transparent and secure data governance framework, which is crucial for building public trust and enabling responsible AI development.
However, the report acknowledges challenges in its implementation, with Indonesia ranking eighth globally for data leaks between 2020 and 2024. Incidents such as the mid-2024 ransomware attack on the National Data Center (PDN), affecting 210 government agencies, highlight the urgent need for more effective enforcement.
Beyond data protection, the government is actively developing new regulations. A Cyber Security and Resilience Bill is under review to strengthen cyberspace protection.
Additionally, a draft AI regulation is targeted for publication in the third quarter of 2025, aimed at providing ethical guidelines, transparency, and accountability for AI usage. Regulations like Presidential Regulation No. 132 of 2022 on Electronic-Based Government System (SPBE) are in place to support data and system integration, although challenges remain, such as 40 per cent of State Civil Apparatus (ASN) not being technically ready to operate the system.
Investing in infrastructure and talent
Recognising unequal distribution of digital infrastructure as a significant challenge, the government is accelerating the development of essential infrastructure in remote areas, including power grids and logistics. Efforts include establishing Digital Broadcasting System (DBS) infrastructure in six locations and providing internet access at over 36,830 public service sites. The aim is to continue 5G network implementation, prioritising underdeveloped regions, and to foster investment in data centres and cloud computing capabilities.
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On the talent front, despite efforts like DTS, Indonesia faces a digital talent deficit, needing nine million digital talents by 2030, but projecting fewer than seven million can be developed within that period. Indonesia also ranks 53rd out of 67 countries in digital capability according to the IMD World Digital Competitiveness Ranking 2024, lagging behind regional peers like Singapore (2nd), Malaysia (34th), and Thailand (40th). To address this, recommendations include aligning education curricula with industry needs, improving access to quality digital training in underserved areas, expanding access to digital professional networks, and simplifying administrative processes for digital workers.
Challenges in implementation
While the policy framework is robust, the report underscores several persistent challenges: the pace of innovation often outstrips legal certainty and implementation effectiveness; infrastructure gaps persist in remote and rural areas, hindering technology adoption; digital literacy remains low for micro businesses and the general public, limiting service utilisation; and collaboration between startups and local governments is uneven, leading to sub-optimal alignment of digitisation agendas. Addressing these requires a more integrated strategy, involving incentive schemes, contextual digital literacy programmes, and phased testing of technologies like AI for MSMEs.
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Ultimately, the successful realisation of Digital Indonesia Vision 2045 hinges on synergistic collaboration between all stakeholders, ensuring that digital transformation creates lasting value and social justice for all Indonesians.
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