The Digital Talent Gap is a Scourge of the National Economy

Deputy for Coordination of Digital Economy, Manpower, and SMEs of the Coordinating Ministry for Economic Affairs, Rudy Salahuddin stated that 77 percent of the population of Indonesia's 277 million people have been exposed to the internet or digital technology.

With such potential, by 2030, Indonesia's gross domestic product (GDP) is predicted to reach Rp 24,000 trillion, with 18 percent or Rp 4,500 trillion contributed by the digital economy. It should be noted that Indonesia's GDP in 2022 was Rp 19,588.4 trillion.

To achieve a GDP leap with the support of a digital economy in 2030, Indonesia needs an additional 9 million digital talents from 2015 until 2030.

The addition of new digital talent per year is targeted to meet expertise in the field of artificial intelligence (AI) development and cloud computing.

"If roughly calculated, every year Indonesia needs approximately 600,000 new digital talents," said Rudy during a media presentation themed "Launch of the National White Paper on Digital Economic Development Strategy", in Jakarta on Monday (4/12/2023).

Rudy explained, of the need for 600,000 new digital talents per year, currently the need is targeted to fulfill expertise in the field of developing artificial intelligence (AI) and cloud computing.

Unfortunately, based on records from the Ministry of Communication and Information, Indonesia's ability to produce new digital talent at present is far from ideal, with only 100,000 to 200,000 talents per year. Educational institutions are the spearheads in covering this gap.

According to Rudy, curriculum changes are needed that place more emphasis on analytical aspects; quantitative; and science, technology, engineering, mathematics (science, technology, engineering, math/STEM) to catch up with the rapid development of technology.

Also Read: Digital Economic Development Policies Are Not Yet Synergistic

To address this gap, the government has continuously collaborated with various local and foreign technology platforms. Two technology giants that the government has partnered with to form quality digital competent human resources are Apple and Microsoft.

Since 2017, the Apple Developer Academy has collaborated with several educational institutions in the homeland to educate potential skilled human resources in the digital sector.

One of Microsoft's initiatives includes digital literacy training that has already been conducted through the launch of Skills for Jobs Indonesia in January 2023 to strengthen digital skills and prepare for job search for 1 million people until 2024.

"We also collaborate with foreign universities, one of which is King's College London which is opening digital economy and digital future study programs in the Singhasari Special Economic Zone, Malang," said Rudy.

Microbusiness

Various efforts need to be made to optimize Indonesia's great potential in digital economy. Indonesia's digital economy value continues to grow and is recorded as the highest in Southeast Asia. In 2023, Indonesia's digital economy value will reach 82 billion US dollars and is estimated to reach 109 billion US dollars in 2025. Additionally, Indonesia holds a 40 percent market share in Southeast Asia's digital economy.

Indonesia's digital economy is dominated by digital trade services or e-commerce. As an illustration, the valuation of e-commerce or e-commerce economic activity in 2021 is 53 billion US dollars or around three-quarters of the total national digital economic activity.

By 2030, it is estimated that the amount will increase to double. This is partly supported by the practicality offered in transactions so that e-commerce or e-commerce is increasingly developing acceleratedly.

Rudy stated that under ideal conditions, the potential of this large digital market also contributes to the rapid growth of the economy. Digital trade, unrestricted by space and time, also opens up business opportunities throughout the Nusantara to expand their reach, especially for micro, small and medium enterprises (MSMEs).

Also Read: Digitalization of MSMEs Still Limited to Creating Business Competition

"Currently around 27 million MSMEs have go digital. "The target is that by 2024, 30 million MSMEs will have go digital," said Rudy.

Digitalization of bureaucracy

In the near future, the Ministry of Economic Affairs Coordinator will release the "National Digital Economy Development Strategy White Paper 2023-2030". This book will serve as a reference for many ministries and institutions to achieve optimal digital economic development goals.

Previously, in the Indonesia Digital Summit 2023 event last week, Minister of Communication and Information Technology Budi Arie stated that the low ratio of civil servants who have adopted digital work methods is still a significant challenge in achieving the potential of the digital economy in the country.

"Based on a survey we conducted, only 30 percent of our bureaucrats have a mindset that prioritizes digitalization. "This is our challenge, how can society transform digitally if ASN doesn't think digital first," he said.

Furthermore, in 2045, digital economy in Indonesia is projected to reach 20.7 percent of GDP. Budi indicated that this projection still has room for improvement as it is still far behind European countries, where their digital economy contribution has reached 30 percent of GDP.

In a separate occasion, economist and lecturer at the Faculty of Economics and Business at the University of Indonesia (UI), Ibrahim Kholilul Rohman, stated that currently, the measures taken by each ministry and state institution do not seem to be synergistic in developing the digital economy.

He described that Bank Indonesia (BI) is focusing on digital payment systems, the Financial Services Authority (OJK) is focusing on the supervision and development of the digital financial services industry, the Ministry of Cooperatives and SMEs is focusing on driving SMEs to enter the digital ecosystem, and various policies from other ministries and institutions. However, the implementation of their respective tasks is considered to not yet have reached a common end point.

Ibrahim, who used to work as a digital economic researcher at the European Union Commission, says that Indonesia could try to learn from digital economic development policies in the European Union region. There, there are various regulations, such as eIDAS (Electronic Identification, Authentication, and Trust Services), EGDPR (European General Data Protection Regulation), and Horizon 2020. However, all of these regulations lead to one goal, which is the Digital Single Market.