Towards a More Inclusive Digital Economy: a Policy Review

Team Member: Akhmad Ramadhan Fatah, Rendy Adriyan Diningrat
Completion Year:
2021
Area:
DKI Jakarta
Topic:
Economic Policy, Labor, Migration & Informal Sector, Microfinance & Small Medium Enterprises, Poverty & Inequality, Social Protection

Collaborating Partners

Project Donor/Funder: Australian Department of Foreign Affairs and Trade (DFAT) and managed by Knowledge Sector Initiative

 
 

Description & Progress

Background

The growth of digital economy has shaped global development pathway, and Indonesia is not an exception. In fact, Indonesia has been predicted to become the largest digital economy in Southeast Asia by 2025. This progress has received a lot of enthusiasm since the expansion of digital services, particularly in e-commerce by connecting more producers and consumers and hence increase employment opportunities. The government also envisages the use of e-government, smart city, and e-tax to improve public services.

However, many analysts consider that the contribution of this new economy to the national gross domestic products is somewhat low considering Indonesia still faces physical infrastructure and non-physical infrastructure challenges, namely the adaptability of regulations. It is becoming clearer that this new development has disrupted the existing formal regulations which is usually rigid. Meanwhile rigidity in the regulation itself could potentially kills innovation. 

SMERU’s initiation to provide research-based evidence to this policy discourse is also motivated by direct communication with several e-commerce companies that approach SMERU for commissioning study on measuring the social impact of their operations, as well as interaction with various startup companies. There are at least two lessons learned: (i) policy readiness and adaptability where many aspects have not been regulated, over regulated or under regulated; (ii) the inclusiveness of this new economy: widening digital divide versus reaching out the excluded communities.  As most research tends to investigate the future growth of digital economy, SMERU could fill the policy gap of the above mentioned areas.          

 

Objective

The study is expected: (i) to provide inputs to the development of national policy to be more inclusive; (ii) to enhance SMERU engagement with business sector and other donors for future collaborative research by 2021.

 

Methodology

In the first year, the study review the literature and collect secondary data to develop the analytical framework. These will be followed with approximately in-depth interviews with 30 informants from relevant companies and related institutions and ministries. Afterwards the study conducts two FGDs with around 15 resource persons (relevant business entities and policy makers) before comprehensively review the policies. Based on the findings, the study develops policy recommendations and determines issues for further examination. At the end of year-1, a half day dissemination event inviting 100 participants and five respectable resource persons will be organized in Jakarta.  In later years, the findings would be reconfirmed and policy recommendation will be developed.

Since the analysis will entail the use of big data, the team will be capacitated with relevant skills through training on data science skill development, data mining and big data analysis. The training will be attended by around 50 researchers and organized as in-house training by inviting respectable trainers in the field.

 


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