Country Diagnostic Studies in Selected Developing Member Countries - Ecosystem for Tech Startups in Indonesia

Team Member: Ahmad Zuhdi Dwi Kusuma, Akhmad Ramadhan Fatah, Adinda Angelica, Hening Wikan
Completion Year:
2021
Area:
National
Topic:
Economic Policy

Collaborating Partners

Project Donor/FunderAsian Development Bank

 
 

Description & Progress

Background

Indonesia is home to a growing number of startups. According to Startup Ranking [1] number of startups in Indonesia increased from 1,400 in 2017 to 2,200 in 2019 placing Indonesia as the fifth countries with highest growth on startups after USA, India, UK, and Canada. Jakarta is included in the top 500 cities globally for startups, while Bandung, Surabaya, and Denpasar also show promise. Indonesia is the second-largest recipient of venture capital in Southeast Asia, after Singapore. Five prominent unicorns include Gojek (ride-hailing and service supplying startup), Tokopedia and Bukalapak (online marketplace), Ovo (digital payment), and Traveloka (travel booking company).

Issues such as internet connection, particularly in the rural areas was identified as the main obstacle to include agricultural community in the ecosystem (Bachtiar et al, 2020a)[2]. However, hopes are high with the presence of Palapa Ring connecting all districts. This backbone infrastructure is expected to improve access to internet with relatively affordable price. In addition, government is also committed to provide three more satellite to covering small islands as well as additional 4,000 Base Transmission Station in left behind villages. The strategic planning of the Ministry of Communication and Information Technology in 2015-2019 was focusing on infrastructure, in 2020-2024 it has moved towards digital talents and developing startups (Bachtiar et al, 2020b)[3].

Above all, the Government of Indonesia has laid solid foundation for digital transformation in its 2020-2024 Medium-Term National Development Planning. In this context, the study on tech startups becomes very relevant and timely.  It is important for all key actors to comprehend the enabling environment that support the tech startup ecosystem.

 

[1] (https://www.startupranking.com/countries [17 August 2020])

[2] (http://smeru.or.id/en/content/towards-inclusive-digital-economy [17 August 2020])

[3] forthcoming

Objective

The study aims at understanding the vital elements of an enabling ecosystem and the needs of startups in Indonesia, especially in cleantech, agritech, edtech, and healthtech. These are the startups which are outside of the main startup sectors of e-commerce and fintech. In particular, the study will provide answers to three broad research questions:

  1. What is the support ecosystem for startups in cleantech, agritech, edtech, and healthtech?
  2. What factors have helped and what factors have constrained startups?
  3. What are the policy recommendations to improve support for startups?

Methodology

This study will comprise of three components: (1) mapping and analysis of the ecosystem; (2) identifying factors that support and constraints startups; and (3) developing recommendation on how to improve the ecosystem for startups. Methods of data collection include in-depth interview and focused group discussion (FGD) with the informants who are the key actors in the ecosystem. The Component 1 and 2 of the study employs the in-depth interview, while the component 3 uses FGDs. The informants will be identified using snowball sampling approach. In this approach we make best use of the information received from the previous subcomponent/component by triangulating it and analyze it in order to determine the informants for the following subcomponent/component.


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