AI and Digitalization Poised to Drive Indonesia's Economic Growth

Coordinating Minister for the Economy Airlangga Hartarto declared that digital transformation and artificial intelligence are poised to become Indonesia's new engines for economic growth. He highlighted the necessity for new drivers as the nation's economic expansion has hovered around 5 percent for the past seven years.

"What is the next economic growth machine? The answer is digital transformation," Hartarto stated during a diplomatic economic breakfast event in Jakarta. He noted that Indonesia has successfully navigated past crises, including the 1998-1999 economic downturn, the 2008 global financial crisis, and the COVID-19 pandemic, through stable government policies.

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What is the next economic growth machine? The answer is digital transformation.

However, Hartarto pointed to emerging challenges stemming from global uncertainty, geopolitical conflicts, and the rapid advancement of AI technology. Aligning with President Prabowo Subianto's directives, the government is prioritizing technologies that bolster national self-reliance in food, energy, and digital transformation.

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The government is pushing for technology that enhances national self-reliance in food, energy, and digital transformation.

Hartarto emphasized that digital transformation is key to Indonesia's future economic trajectory, offering advantages such as reduced dependence on global logistics chains, which facilitates faster digitalization. He views AI as a crucial foundation for future growth but stressed the need for a robust ecosystem, including ample data, hyperscale data centers, computing infrastructure, and a strong semiconductor industry.

To support AI ecosystem development, the government is actively pursuing international collaboration. Partnerships are underway with the UK on next-generation semiconductor chips and with the United States and other nations on AI initiatives. Indonesia plans to participate in the PACSILICA forum and the World AI Cooperation Organization meeting in Shanghai to gain insights into global AI trends and strengthen cooperative efforts. Hartarto concluded that digital transformation and AI signal the dawn of a new era of economic growth for Indonesia.

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AI will be a crucial foundation for Indonesia's future economic growth. However, its use requires an adequate ecosystem that includes data availability, hyperscale data centers, computing infrastructure, and the semiconductor industry.