The government is targeting economic growth of up to 8 percent to accelerate the achievement of the Indonesia Emas 2045 vision. According to Burhanuddin Abdullah, Board of Advisors at Prasasti Center for Policy Studies, one of the most effective steps to reach this target is to accelerate digitalization.
“By focusing on digital, Indonesia’s ICOR, which currently stands at around 6.6, can be reduced to 4.3. This means high growth can be achieved with lower capital requirements,” he said.
Prasasti data shows that Indonesia’s digital economy reached IDR 1,860 trillion in 2024, equivalent to 8.4 percent of national GDP with an annual growth rate of around 7 percent, outpacing the national economic growth rate. The sector has also proven to be twice as efficient as the average of the 17 national economic sectors.
“The digital industry is a driver of economic efficiency. With low ICOR, significant GDP contribution, and broad job creation, the growth prospects for this sector are very strong in the next five years,” said Gundy Cahyadi, Research Director Prasasti.
Prasasti recommends expanding digitalization to 17 economic sectors already assessed, ranging from agriculture, mining, manufacturing, construction, trade, transportation, accommodation, finance, to education and health. Piter Abdullah, Director of Program and Policy at Prasasti, explained that expanding digitalization across all these sectors would significantly increase the likelihood of achieving 8 percent growth with lower capital investment.
According to Piter, the priority for government policy should be to improve infrastructure that supports the growth of the digital economy, particularly internet access. Internet access is still uneven and many regions do not have adequate connectivity. Without sufficient access, the digital economy potential in those areas remains low. The government must accelerate infrastructure equalization to ensure internet availability and reliability across the country.
Piter expressed confidence in the positive financial outlook of the digital industry. He noted that while the exact conditions of each technology company may differ, typical investment patterns suggest that many could begin generating returns within the next two to five years.
He also underscored Prasasti’s view on the importance of educating the public about digital business models, particularly in understanding that commissions charged on digital platforms are rental fees for using applications rather than illegal levies.
Furthermore, Piter emphasized that regulations should focus on maintaining healthy business competition rather than imposing price controls, allowing prices to vary according to service quality while preventing collusion or cartel practices that could harm consumers.
With these measures, Prasasti is optimistic that Indonesia can harness the potential of its digital economy to improve efficiency, expand employment opportunities, and sustain momentum toward the 8 percent annual growth target.
Learn more about Prasasti Research on Digital Economy, click here