Digital boom must translate into real economic gains, says Indonesia minister

Indonesia's digital economy must yield lasting economic power, not just growth, by ensuring value creation stays within the region, according to Communications and Digital Affairs Minister Meutya Hafid. Speaking at the Asia Economic Summit in Jakarta, Hafid stressed that unchecked growth often results in profits and data flowing to platforms headquartered abroad, diminishing the local economic impact.

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We have seen regions grow their digital economies, while the real value flows out to platforms headquartered far away.

Hafid projected Indonesia's digital economy to surge from approximately $100 billion to $360 billion by 2030. She also noted the potential for the broader ASEAN digital economy to expand from $300 billion to $2 trillion by 2030, contingent on the implementation of the Digital Economy Framework Agreement (DEFA), slated for signing in November.

However, Hafid cautioned against equating larger economic figures with greater economic strength. Indonesia's focus, she explained, is on achieving "value retention" and "productivity spillovers" into the real economy. This means ensuring that a larger portion of the value generated by digital activities remains within local economies and that technology adoption enhances productivity in sectors like manufacturing, agriculture, and small businesses.

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Put simply, we intend to keep more of what we earn.

Addressing the rise of artificial intelligence, Hafid warned that while AI can accelerate growth, it also risks exacerbating inequalities and introducing new dangers if access and capabilities are unevenly distributed. She highlighted the increasing value of data and the proliferation of misinformation through tools like deepfakes. Hafid urged ASEAN countries to be active participants in shaping technology, rather than passive consumers, emphasizing that control over data and the alignment of global AI models with regional languages and values are crucial for preserving the region's identity.

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So if our data is controlled by others, we can be sure that our future will be shaped by others. If global models never learn our languages and our values, the region risks losing its own identity altogether.