President Joko Widodo’s (Jokowi) remarks claiming that whichever country “controls AI can potentially control the world” has galvanized the role of AI for Indonesia’s digital transformation.1 Capitalizing on its vast geography, market size, and youthful demographics, Indonesia has become a major hotspot for venture capital investments in the region and is poised to become Southeast Asia’s front-runner in AI development.2
Jokowi’s observation set in motion a series of initiatives aimed at laying the groundwork for Indonesia’s AI blueprint. The Agency for the Assessment and Application of Technology (BPPT) was tasked with conducting initial deliberations with government agencies, as well as stakeholders from universities, industry associations, and national telecommunication companies.3 These consultations culminated in the National Strategy for Artificial Intelligence (“Strategi Nasional Kecerdasan Artifisial”) released in 2020.4
According to the Ministry of Research and Technology and the National Research and Innovation Agency (BRIN), the document sets forth the national policy for AI development from 2020 to 2045. It outlines five national priorities where AI is anticipated to have the biggest impact: (1) health services to accelerate plans for smart hospitals and health security infrastructure in the aftermath of the pandemic; (2) bureaucratic reform to implement digital services for citizen-centric public service (“pemerintahan digital melayani”); (3) education and research to aid online schooling and bridge the digital divide; (4) food security for smart agriculture, fisheries, and management of natural resources; as well as (5) mobility and services to facilitate the development of 98 smart cities and 416 smart districts under Indonesia’s 100 Smart Cities Movement. In supporting the implementation of these five national priority areas, the National AI Strategy also identifies four key focus areas: (1) ethics and policy; (2) talent development; (3) infrastructure and data; and (4) industrial research and innovation.
The National AI Strategy serves as the umbrella framework to streamline Indonesia’s existing technology-focused plans and projects. It builds on Jokowi’s digital roadmap launched in 2014 called “Making Indonesia 4.0”, which involves 10 cross-sectoral initiatives aimed at boosting Indonesia’s competitive performance in key areas like manufacturing, industry, biology, and hardware automation.
Apart from these initiatives, the overarching governance framework surrounding ethical AI will be critically important to drive the overall strategy. The National AI Strategy’s guidebook recommended the formation of a data ethics board to oversee AI development, as well as create regulations and national standards for AI innovation. There is currently no such agency or institutional structure in place to oversee the governance and ethical use of AI.
With the publication of the National AI Strategy, Indonesia joins other countries in Southeast Asia that are bullish about harnessing AI’s transformative impact on both the economy and the wider society. Additionally, Indonesia’s role in convening the Regional Comprehensive Economic Partnership (RCEP) and its intention to join the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP) demonstrate its interest in helping set regional digital economic standards. Apart from Singapore, which is a participating member, Indonesia is the only other Southeast Asian country that sits as an observing member on the ISO/IEC JTC 1/SC 42 standards committee on artificial intelligence.5
Usage and Impact
Even before the release of its National AI Strategy, Indonesia was already primed to seize the opportunities and benefits of AI given its market size and growth potential. A study commissioned by International Data Corporation or IDC Asia-Pacific Enterprise Cognitive/AI Survey in 2018 found that Indonesia had the highest AI adoption rate in Southeast Asia at 24.6 percent, followed by Thailand (17.1 percent), Singapore (9.9 percent), and Malaysia (8.1 percent).6 Having a population of approximately 273 million with a median age of 29 years, and with increasing smartphone usage and internet penetration, Indonesia alone contributed 40 percent to Southeast Asia’s total GMV amounting to USD70 billion in 2021.7 With the rising adoption of AI in the country’s financial services, retail, logistics and supply chains, Indonesia is expected to further add USD366 billion to its GDP in the next decade.8
Indonesia’s booming internet economy is fueled by a “digital mindset” that drives the rapid adoption of AI technologies across the archipelago. It is home to native digital tech unicorns such as Bukalapak, Traveloka, and OVO.9 The local success of Indonesia’s start-ups in natural language processing and big data analytics has led them to expand further in international markets. Two homegrown digital mammoths, Gojek and Tokopedia, have led Indonesia’s mobile-first approach and adoption of AI solutions. Gojek is also one of the most funded start-ups in the Asia Pacific, with operations in other markets like the Philippines, Singapore, Thailand, and Viet Nam. As a one-stop shop multiservice platform, Gojek has developed scalable machine learning (ML) models to create personalized customer preferences. It leverages AI and ML to offer biometric security features such as fingerprint and facial recognition. Tokopedia is an e-commerce giant that leverages AL and ML capabilities for product development. It has also promoted AI research and talent development through its partnership with the University of Indonesia, with the 2019 launch of a deep learning supercomputer technology called NVIDIA DGX-1.10 The partnership also launched AI-based solutions like demand prediction, smart warehouses, and smart logistics.11
In 2021, Gojek and Tokopedia merged and became the “GoTo Group” with a combined valuation of about USD20 billion.12 The GoTo Group offers a wide-range of services including e-commerce, ride-hailing, food delivery, and financial services, but is also expanding to the fintech arena through financial payments, consumer finance, and merchant lending.13 Although both entities still operate as separate businesses, Tokopedia and Gojek are accelerating the local integration of AI-enabled technologies in close tandem with initiatives backed by the government.14 However, both entities now face falling market share and profitability due to fierce competition from other regional players like Grab, OVO and ShopeePay.
The continuing success of Indonesia’s unicorns has sparked a vibrant start-up community. With approximately 21,000 start-ups, Indonesia ranked fifth behind the United States, India, the United Kingdom, and Canada in countries with the most start-ups.15 Up-and-coming household names are also making a positive impression in the local and international AI scenes. Kata.ai is a well-known conversational AI platform using natural language processing that automates customer interactions such as customer queries with minimal human intervention. Uniquely for Indonesia’s local market, Katai.ai uses Bahasa Indonesia rather than English.
As an example of Indonesia’s thriving technology sector, Bukit Algoritma (Algorithm Hill) was launched as a mega-tech hub located in Sukabumi, West Java to emulate the Silicon Valley spirit.16 The sprawling 888 hectares will be transformed into a special economic zone that will host Indonesia’s start-ups specializing in AI, digital technology, biotech, and semiconductors. The ambitious multibillion dollar industrial project hopes to become the country’s center of research in neuroscience, nanotechnology, quantum technology, solar cell technology, and space exploration. With completion expected by 2030,17 Bukit Algoritma is the latest addition to other digital hubs across Indonesia—Bumi Serpong Damai or BSD City, Bandung Technopolis, as well as in Yogyakarta and Malang—that will groom the country’s future start-ups and unicorns.18
Indonesia’s growing AI start-up community has received growing traction in key state and city-level projects. Local AI firm Nodeflux was tapped to partake in the Jakarta Smart City initiative to advance smart governance and smart mobility using data management solutions, computer vision, and real-time video analysis. Furthermore, it also collaborated with the Indonesian National Police to provide surveillance during the 2018 Asian Games as well as the 2018 International Monetary Fund and World Bank meetings that were held in the country.
The Indonesian government considers AI solutions as vital to achieving administrative effectiveness and efficiency. AI utilization was included in Indonesia’s five-year digital transformation plan alongside its roll-out of 5G infrastructure.19 BRIN has encouraged the use of AI to deliver innovation in agriculture, energy, cybersecurity, and the creative industries.20 The Aeronautics and Space Research Organization of BRIN is also currently developing an AI-enabled platform for remote sensing to monitor natural resources and the environment.21 Relatedly, other government agencies are using AI technology to monitor and anticipate forest fires, while some have been promoting AI-tech solutions for edtech in schools and universities, especially during the height of the pandemic.22
Apart from leveraging AI in specific strategic sectors, Jokowi has also vowed to use AI to reduce bureaucratic red tape.23 If adopted, it will result in the substitution of two ranks of public positions by AI-enabled technologies. Another government-led AI initiative is the employment of AI-based technologies to facilitate an online single submission system to ease business registration.24 These initiatives will help facilitate the ease of doing business and attract more foreign investment in Indonesia.
The Indonesian government has also entered into a partnership with the U.N.-led Global Pulse Lab headquartered in Jakarta to further develop AI-based solutions for public policy programs. Together with the U.N. Country Team, Indonesian representatives identified national development priorities for applied research. The collaboration culminated in the AI-powered platform called Haze Gazer, a crisis analysis tool which combines satellite imagery of fire hotspots, census data, and real-time information captured from social media for disaster management efforts.25 Through deep learning, it can also identify air quality instantaneously using meteorological data from satellite imagery and images shared via social media.26
At the height of the COVID-19 outbreak, AI was integrated as part of the e-government response in the public health sector. The Ministry of Health used an AI-powered app called Telemedicine Indonesia to link patients with hospitals and doctors.27 In co-ordination with provincial and city health services, the app provided affordable health access in four main telemedicine services: radiology, ultrasound, electrocardiography, and consultation.28
In a move to further centralize the government’s approach to AI, Jokowi reformed the country’s science and technology policy, which resulted in the consolidation of BRIN with the technology ministry to establish the Ministry of Education, Culture, Research, and Technology.29 However, it remains to be seen whether the government will enact a digital government transformation body to proactively facilitate resource allocation to priority sectors and help create linkages between international and local tech firms.30 In the meantime, the Artificial Intelligence Research and Innovation Collaboration (Kolaborasi Riset dan Inovasi Industri Kecerdasan Artifisial) or KORIKA serves as an “orchestrator organization in the form of an association that fosters AI innovation” and advocates for the adoption of AI in various fields to achieve Indonesia’s vision as laid out in the National AI Strategy by 2045.31
Use of AI in Healthcare
As part of Indonesia’s G20 presidency, Jakarta has pushed for countries to realize a global AI platform for current and future pandemic surveillance. This is aligned with its endeavors to build a global health architecture, one of the priority issues of Joko Widodo’s presidency. Having an integrated system on a single global platform can facilitate collaboration and ease the health sector in identifying, determining, and discovering diseases and new drugs.
The greatest benefit arising from the establishment and implementation of a global platform would be the availability of healthcare data across borders. This would allow for authorities to share knowledge on new viruses and variants, which could aid disease management and mitigation. Researchers and developers would also be able to benefit from this, as the availability of data sets could accelerate research and improve performance for AI applications. Indonesia’s National Research and Innovation Agency (BRIN) has prepared the data infrastructure for biological and genetic resources, which could serve as the primary source of data for the entire system. However, data protection laws within and across borders would have to be both tightened and streamlined to balance the public health advantages of such a platform while preserving the privacy and security of personal—even sensitive—data.
Challenges and Prospects
President Jokowi aims to advance Indonesia’s AI competitive footing, arguing that “the world today is in a war to gain AI capabilities. The competition to control AI is comparable to the space [race] during the Cold War.”32 To this end, he has instructed the BPPT further advance Indonesia’s ongoing indigenization of its tech capabilities through increased collaboration among the Indonesian diaspora, universities, and start-up companies.33
However, Indonesia’s ethical AI journey has several urgent challenges. These include concerns surrounding job displacement, inclusion, and equity, as well as surveillance and exploitation.
Through automation, AI could dramatically boost Indonesia’s productivity, but it could also cause disruption to the workforce. McKinsey estimates that 23 million jobs could be displaced by automation by 2030. But lost jobs can also be replaced and new ones can be generated. This depends on a mix of factors like shifting labor demands in key sectors such as construction, manufacturing, and education, as well as government policies to instill technological, social, emotional, and cognitive skills.34
Indonesia’s lack of highly-skilled talent has been evident since 2016. The Ministry of Finance has addressed the looming shortage of human resources by reskilling the workforce for high-tech industrial opportunities.35 But the Indonesian government needs a comprehensive and a long-term strategy to build and maintain a highly capable workforce. The United Nations Children’s Fund (UNICEF) Indonesia recommended that the country must first address the absence or inaccessibility of early childhood development services, especially in rural and remote areas.36
A study conducted by the Lowy Institute revealed that the Indonesian government has allocated “low public spending on education” and failed to address “human-resource deficits, perverse incentive structures, and poor management.” Such obstacles lay bare Indonesia’s challenges in establishing research and development linkages with international institutions in emerging areas like AI.37 Left unaddressed, Indonesia may find it difficult to tap into its reservoir of young talent to drive the country’s innovation and digital economy.
Inclusion and equity
Upon the release of the National AI Strategy, academics and civil society groups warned of the urgency of addressing the country’s talent gap, lagging infrastructure, and risk of algorithmic bias. There was a consensus that the National AI Strategy was a positive development, but first Indonesia must address foundational issues like talent development and internet connectivity across the archipelago. The government must also implement reforms in higher education and install regulations to prevent damage from possible AI algorithmic errors. More importantly, there was an emphasis on upholding principles of fairness, accountability, and transparency to guarantee the protection of human rights and prevent the occurrence of racial bias.38
The partnership between Tokopedia and the University of Indonesia is a good starting point to further expand discussion regarding ethical AI guidelines in the context of Indonesia. Under KORIKA’s oversight, a multistakeholder AI partnership inspired by multilateral data partnerships can be explored, whereby AI companies are paired with research institutes, universities, and civil society groups to tackle AI’s potential risks and harms.39 Lessons learned and insights drawn from these partnerships can be compiled as actual case studies that could strengthen the basis for Indonesia’s AI ethics guidelines, in addition to existing initiatives that promote the regulation of information security and the protection of personal data.40
Surveillance and exploitation
The need to uphold and embed principles of fairness, accountability, and transparency has become ever more relevant in light of Indonesia’s growing gig economy. According to Gojek’s ride-hailing drivers, the app’s algorithms have “increasingly squeezed and exploited” their working conditions. Because of intensifying competition and relentless price wars with Grab, Gojek reduced drivers’ bonuses and compelled them to work long hours to achieve their daily targets, but at the same pay rate. During the pandemic, allegations were made that Gojek’s algorithms were deployed to penalize and demote inactive drivers even if they had contracted COVID-19. As a result, drivers demanded changes to the platform’s policies. But despite growing movement within the community to organize, mobilization was hindered by algorithmic configurations that deployed drivers to different locations to disrupt rapport and camaraderie.
To circumvent Gojek’s complex algorithms, drivers adopted various strategies like using hacked versions of official accounts coined as ghost accounts or spoofing a phone’s global positioning system (GPS). It even led to an app war where developers inserted features to evade Gojek’s detection systems. To counter these forms of resistance, Gojek developed more precise trackers to determine driver location and implemented stringent rules of account suspension. However, over time, the drivers’ network continued to expand.
Since 2016, GoJek drivers have gone on occasional strikes under the banner of Gojek Solidarity to push against unfair policies.41 These protests have forced Gojek to incrementally revamp its policies to improve their working conditions.42 Yet there is still a need to push for more regulatory changes in Indonesia to recognize the gig economy and enforce minimum standards for the treatment of ride-hailing drivers.
This particular case highlights the risk of entrenching exploitative labor practices through algorithms. Additionally, charges of “data colonialism” in other countries where tech companies harvest user data and manipulate algorithms to control users as subjects, offer cautionary lessons for Indonesia about the dangers of surveillance and worker mistreatment in a data-driven ecosystem.43 It also exposes the prevailing institutional void which characterizes the Indonesian government’s shortcomings in providing market regulation policy frameworks fit for the platform economy. This, in turn, undermines formal government rules and regulations under the pretext of economic growth.44
By reflecting on its leadership role in the region, Indonesia could foster greater dialogue and co-ordination with and among its neighbors in the context of agenda-setting and rulemaking AI. Its G20 chairmanship this year provides the platform for how developing countries can address structural limitations in science, technology, and innovation in collaboration with trusted peers in advanced economies. Indonesia can also explore effective interventions to prevent or mitigate digital transformation risks that could lead to more serious institutional weaknesses.
In addition to its three G20 digital priority areas—post-COVID-19 recovery, digital literacy, and cross-border data flow—Indonesia should reignite the discussion on harnessing the benefits of AI beyond economic growth. It should reinforce the tremendous potential of AI-based solutions to accomplish the U.N.’s sustainable development goals, which could lead to positive spill-over effects reaching even those outside the G20 circle.45 In doing so, Indonesia can achieve a positive and collective effort, enabled by sound policy incentives to employ AI for good, that will catalyze genuine digital transformation within and beyond Southeast Asia.
1 Aineena Hani, “Indonesia Deploys Artificial Intelligence to Accelerate Economy and Digital Transformation,” Open Gov Asia, November 9, 2021, https://opengovasia.com/indonesia-deploys-artificial-intelligence-to-ac…
2 Kayla Goode and Heeu Millie Kim, “Indonesia’s AI Promise in Perspective," Issue Brief, Center for Security and Emerging Technology, August 2021, https://cset.georgetown.edu/publication/indonesias-ai-promise-in-perspe…
3 “Indonesia National AI Strategy set in motion this month,” Carrington Malin, August 16, 2020, https://www.carringtonmalin.com/2020/08/16/indonesia-national-ai-strate…;
4 Strategi Nasional Kecerdasan Artifisial 2020-2045, Badan Pengkajian dan Penerapan Teknologi, https://ai-innovation.id/server/static/ebook/stranas-ka.pdf.
5 “Artificial Intelligence Standards and Trade in ASEAN,” Industry IoT Consortium Webinar, Singapore Chapter, February 25, 2021, https://www.iicom.org/wp-content/uploads/Singapore-Chapter-Report-25.02…;
6 Ai Le Tao, “Indonesia leads ASEAN region in AI adoption,” Computer Weekly, July 12, 2018, https://www.computerweekly.com/news/252444634/Indonesia-leads-ASEAN-reg…;
7 “Southeast Asia internet economy to hit $1 trillion by 2030, report says,” Reuters, November 9, 2021, https://www.reuters.com/world/asia-pacific/southeast-asia-internet-econ…;
8 Eisya A. Eloksari, “AI to bring in $366b to Indonesia’s GDP by 2030,” The Jakarta Post, October 9, 2020, https://www.thejakartapost.com/news/2020/10/09/ai-to-bring-in-366b-to-i…;
9 "How did Indonesian startups fare in 2020," Tech Collective, December 11, 2020, https://techcollectivesea.com/2020/12/11/how-did-indonesian-startups-fa…(Bukalapak,India%2C%20Great%20Britain%20and%20Canada.
10 Goode and Kim, “Indonesia’s AI Promise in Perspective," 6.
11 “Artificial Intelligence Standards and Trade in ASEAN,” Industry IoT Consortium Webinar, 17.
12 Jamila Lim, "It’s official—Tokopedia Gojek merger heralds the arrival of SEA’s digital services giant,” https://techwireasia.com/2021/06/tokopedia-gojek-finalize-merger-with-c…;
14 Goode and Kim, “Indonesia’s AI Promise in Perspective," 7.
15 "How did Indonesian startups fare in 2020," Tech Collective, December 11, 2020, https://techcollectivesea.com/2020/12/11/how-did-indonesian-startups-fa…(Bukalapak,India%2C%20Great%20Britain%20and%20Canada.
16 Editorial Board, "Indonesia’s Silicon Valley," The Jakarta Post, April 30, 2021, https://www.thejakartapost.com/academia/2021/04/29/indonesias-silicon-v…;
17 Eileen Yu, “Singapore Industry Needs Stronger Code of Conduct as Consumer Data Gains Value,” ZDNet, March 17, 2018, zdnet.com/article/singapore-industry-needs-stronger-codes-of-conduct-as-consumer-data-gains-value/.
18 Goode and Kim, “Indonesia’s AI Promise in Perspective.”
19 Eisya A. Eloksari, “AI to bring in $366b to Indonesia’s GDP by 2030.”
20 Aineena Hani, “Indonesia Deploys Artificial Intelligence.”
21 Aineena Hani, "Indonesia Develops AI-based Platform for Natural Resource Monitoring," Open Gov Asia, November 29, 2021, https://opengovasia.com/indonesia-develops-ai-based-platform-for-natura…;
22 Anthony Iswara, "Indonesia sets sights on artificial intelligence in new national strategy," The Jakarta Post, August 14, 2020, https://www.thejakartapost.com/news/2020/08/13/indonesia-sets-sights-on…;
23 "Indonesia will replace some civil servants with AI, says Jokowi," Aljazeera, November 28, 2019, https://www.aljazeera.com/economy/2019/11/28/indonesia-will-replace-som…;
24 "Everything you need to Know about Indonesia's Online Single Submission System," Ministry of Investment, Accessed June 7, 2022, https://www2.investindonesia.go.id/en/article-investment/detail/everyth…;
25 United Nations Activities in Artificial Intelligence (AI) 2018, International Telecommunication Union (Geneva: International Telecommunication Union, 2018), https://www.itu.int/dms_pub/itu-s/opb/gen/S-GEN-UNACT-2018-1-PDF-E.pdf, page 32
27 Muslimin Machmud et al., "Artificial Intelligence In the Public Health Sector: the Use of Telemedicine in Indonesia During COVID-19," Palarch's Journal of Archaeology of Egypt/Egyptology, 17, no. 6 (2020), https://eprints.umm.ac.id/78518/19/Machmud%20Masmuh%20Nasirin%20Salahud…;
28 Ibid., 10111-10112, https://eprints.umm.ac.id/78518/19/Machmud%20Masmuh%20Nasirin%20Salahud…;
29 Editorial Board, "Indonesia’s Silicon Valley," https://www.thejakartapost.com/academia/2021/04/29/indonesias-silicon-v…
30 Et Ratcliffe and Ajisatria Suleima, "Indonesia's AI Ambitions," Asia House, October 27, 2020, https://asiahouse.org/wp-content/uploads/2020/10/Indonesias-AI-ambition…;
31 Aineena Hani, “Indonesia Deploys Artificial Intelligence.”
32 Tunggul Wirajuda, "President Jokowi Urges Indonesia to Accelerate AI Capabilities," Kompas, March 9, 2021, https://go.kompas.com/read/2021/03/09/062143674/president-jokowi-urges-…;
33 Kaushik Das, Phillia Wibowo, Michael Chui, Vishal Agarwal, Vivek Lath, Automation and the Future of Work in Indonesia: Jobs Lost, Jobs Gained, Jobs Changed, McKinsey & Company, September 2019, https://www.mckinsey.com/~/media/mckinsey/featured%20insights/asia%20pa….
34 Ibid., 2.
35 “Getting Indonesia 4.0.—Ready," The ASEAN Post, September 30, 2019, https://theaseanpost.com/article/getting-indonesia-40-ready.
36 Sheith Khidhir, "Creating high-skilled talent," The ASEAN Post, October 23, 2018, https://theaseanpost.com/article/creating-high-skilled-talent.
37 Andrew Rosser, "Beyond Access: Making Indonesia's Education System Work," Lowy Institute, February 21, 2018, https://www.lowyinstitute.org/publications/beyond-access-making-indones…;
38 Iswara, "Indonesia sets sights on Artificial intelligence in new national strategy."
39 Rajius Idzalika, Zakiya Pramestri, Imaduddin Amin, Yulistina Riyadi and George Hodge, “Big Data for Population and Social Policies,” Pulse Lab Jakarta - United Nations Global Pulse, (2019), https://pulselabjakarta.org/assets/uploadworks/2019-01-24-08-58-31.pdf…;
40 Muhammad Firdaus, "Artificial Intelligence Ethics Guidelines in Indonesia," Pukyong National University, (2019), https://www.academia.edu/49564840/Artificial_Intelligence_Ethics_Guidel…;
41 Callistasia Anggun Wijaya, "Hundreds of Go-Jek drivers protest 'unfair policy,'" The Jakarta Post, October 3, 2016, https://www.thejakartapost.com/news/2016/10/03/hundreds-of-go-jek-drive…;
42 Karen Hao and Nadine Freischlad, "Artificial Intelligence: The gig workers fighting back against the algorithms," MIT Technology Review, April 21, 2022, https://www.technologyreview.com/2022/04/21/1050381/the-gig-workers-fig…
43 Nick Couldry and Ulises A. Meijas, "Data Colonialism: Rethinking Big Data's Relation to the Contemporary Subject," Television and Media, 20, no. 4 (2019): https://journals.sagepub.com/doi/abs/10.1177/1527476418796632.
44 Wening Mustika and Amalinda Savirani, “’Ghost Accounts’, ‘Joki Accounts’, and ‘Account Therapy’: Everyday Resistance Among Ride-Hailing Motorcycle Drivers in Yogyakarta Indonesia,” The Copenhagen Journal of Asian Studies 39, no. 1 (2021), https://rauli.cbs.dk/index.php/cjas/article/view/6175/6795.
45 Ricardo Vinuesa et al., "The role of artificial intelligence in achieving the Sustainable Development Goals," Nature Communications, 11, no. 233 (2020), https://www.nature.com/articles/s41467-019-14108-y.