Presented by Dr Titik Anas, Founder of Presisi Indonesia, during the High Level Seminar Project 2045: The Path to Peaceful and Prosperous Indonesia and Japan 2045 held in Jakarta on 9 December 2018 by the Economic Research Institute for ASEAN and East Asia (ERIA) and UNDP Indonesia, under the funding of the Government of Japan.

1. The Use of Digital Technology to Improve Quality of Life
Titik Anas and Bambang Irawan
High Level Seminar
‘Project 2045: The Path to Peaceful and Prosperous Indonesia 2045’
9 December 2018

2. the age of digital technology
CHOICES
Brings morechoicesfor consumers
GROWTH
Higher productivityinduces
higher economicgrowth
DATATRANSFER
Data transmission becoming
faster and morereliable
COMMUNICATION
• Digital technology changesways
to communicate
• Connected more peopleanytime
andanywhere
EFFICIENCYAND
PRODUCTIVITY
Digital technologyimproves
efficiencyandproductivity
DATASTORAGE
Large data can be stored in
small storage
shapes dailylife benefits

3. Digital technology and Firm’s Performance
1,9
0,8
0,8
1,7
1,2
1
0,9
1,3
1,4
1,4
Robotics
Mobile/social
media
IoT
Cognitive
technologies
Combined
investments
Asset-heavy
Asset-light
Return on Investment: Asset-Heavy vs. Asset Light Industries
(2015-2016)
Productivity change for average company after $1 increase in investment for each technology
Source: World Economics Forum,2018
• At firm level, investment in
digital technologies provided
efficiency and productivity
improvement
• Asset-light firms benefitted
from mobile/social media
investment the most
• While asset-heavy firms
benefitted the most from
robotics

4. digital technology and economic growth
• Mobile Phone and internet
usage proliferation gives
significant increase to
economic growth
• In 2000 to 2014, mobile phone
proliferation gives between
1.0% and 4.1% increase of GDP
per capita growth
• Meanwhile, internet usage
proliferation increase GDP per
capita growth around 0.9 to
9.9%
• In absolute terms, the
diffusion of digital
technologies brings US$
3,308 increase in GDP per
capita on average
Country
Mobile Phone
Change Contribution Contribution
(%) (%) (US$)
Internet Use
Change Contribution Contribution
(%) (%) (US$)
61
55.7
30.7
3.27
2.99
1.64
1,923
1,732
938
38
49.2
57.8
3.3
4.3
5
1,940
2,477
2,866
72.2 3.87 2,185 32.1 2.8 1,573
31.5
46.4
38.6
41.6
1.69
2.49
2.07
2.23
1,068
1,369
1,124
1,217
18.6
27.6
113.9
33.2
1.6
2.4
9.9
2.9
1,020
1,319
5,369
1,572
66.6 3.57 1,756 45.2 3.9 1,928
48
27.6
51
17.8
19.3
30.7
60
24.2
2.57
1.48
2.73
0.95
1.03
1.65
3.21
1.3
881
918
1,233
848
481
989
2,243
704
16
36
38.2
24
73.1
10.3
28.3
39.6
1.4
3.1
3.3
2.1
6.3
0.9
2.5
3.4
476
1,937
1,497
1,850
2,954
537
1,715
1,867
Australia
Austria
Belgium
Canada
Denmark
Finland
France
Germany
Japan
Korea
Netherlands
New Zealand
Norway
Spain
Sweden
Switzerland
United Kingdom
United States 76.2 4.08 2,899 34.9 3 2,151
Source: Qu, Simes, and O’Mahony (2017); Contribution is in GDP per capita constant US dollar (2010 PPP);
Year of observation is 2000 - 2014

5. Digitalization and the economy– Indonesia
ICT sector growing very fast
Firms using digital
technology exhibit higher
productivity
Source. Pangestu and Dewi, 2017

6. Digital Tech
and
Indonesians
Fast adaptation
and high
savviness to
digital economy
Strong e-
commerce,
sharing
economy
Indonesia
Indonesia
Source: McKinsey, 2018
$8 bn gross
merchandise value
30 million
shoppers
Source: McKinsey, 2018
Source: iPrice Insights,2017

7. However, Indonesia has tremendeous gap across
regions, reflected in the ICT development index
6,12
5,84
5,63
5,59
4,95
4,82
4,64
4,51
4,41
4,27
4,26
4,26
4,24
4,12
4,08
4
3,93
3,92
3,91
3,83
3,8
3,73
3,72
3,69
3,58
3,51
3,41
3,32
3,29
3,21
3,02
2,75
0 1 2 3 4 5 6 7 8
7,41DKI Jakarta
East Kalimantan
Riau Islands
Banten
West Java
East Java
South Sulawesi
Central Kalimantan
Bangka Belitung
Jambi
Maluku
West Papua
North Sumatera
Central Sulawesi
Lampung
North Maluku
East Nusa Tenggara
2,41
Source: Berita Resmi Statistik Pembangunan IP-TIK 2015-2016,BPS
Indonesia:
4.34
• Jakarta has the highest ICT
Development index score
• However, we found that other
regions outside Java, such as
Kalimantan, also received higher
than average score
• The lower part of the score is
dominated by Eastern Indonesian
regions
Classification based on quartile:
• High score :Score≥ 4.49
• Medium score :3.97≤ Score< 4.49
• Low score :3.61≤ Score< 3.97
• Very low score :Score< 3.61

8. Indonesians should have access to and benefits from digital. However,
the use of technology is currently limited in Indonesia
Agriculture
• digital platform
shorten the supply
chain by giving direct
linkage from farmers
to consumers so that
it yields higher profit
to farmers and lowers
the cost to consumers
Fishery
• More efficient fishing
(information sharing)
Tourism, hotel, and
restaurant
• Digital technology can
provide real time
information about
tourist destination
• Advertise the addition
of digital platforms
Education
• Better access to
(higher) education for
those in remote areas
(distance learning)
• Knowledge can be
delivered via digital
technology but
human relation (social
skills) still needs
human delivery.
focus of current study
Manufacturing
- digital tech
improves
productivity
Health-care:
the use of IT in
health care
management and
delivery is limited as
well telemedicine.
The adoption
improves efficiency
and effectiveness o
the delivery

9. Weaknesses
ICT
infrastructure
still lacking Digital Divides
General Digital
Skills and Future
Technology
Skills

10. Cooperation
ICT infrastructure development
Human capital investment
• Higher education
• Cooperation in improving quality of distance learning services.
• Area: content development of the online courses for distance.
• Vocational education
Research and Development (R&D)
on future technology
Application of future technology
• Healthcare: integrated healthcare information system