This year marks the start of a nationwide policy to set up an environment fit for tech startups, accelerating their growth to help them reach ultimate valuations of US$1 billion.

While it seems a far-fetched ambition to start with, the Indonesian government is confident that two such tech companies, called unicorns, could emerge next year.

It has set out a five-year plan to scout thousands of local startups, incubate the selected hundreds and provide them sufficient funding to scale up.

In 2020, so the plan goes, Indonesia is expected to have raised 10 unicorns to be frontrunners in the new global economy.

In order to give access to foreign mentors and venture capitalists, the government will loosen up regulations on foreign direct investment and taxes, among other things.

Although everything is a bit premature at this point — a roadmap is still being drawn up — there have been some milestones that could favorably drive the tipping points that are required to enable the fast growth of startups.

On internet penetration, according to Google, more than two out of five Indonesians, 43 percent of the population of more than 250 million, owns a smartphone and the penetration of smartphones has increased this year to 61 percent in cities.

Communication and Information Minister Rudiantara also encouraged telecommunications operators to focus on the improvement of 4G broadband before moving on to a 5G network.

The ministry also aimed to see cheaper 4G-enabled smartphones more widely available in the next three years, expecting that a fully optimized broadband network would spur the growth of the digital economy.

Google and TNS Australia recently released survey results about Indonesian online commerce behavior that would be lucrative for any Indonesian startup.

The data shows that each individual installed 31 mobile applications on average and 34 percent of smartphone users don’t mind installing paid applications priced under Rp 48,000 (US$3.5).

The online payment system is maturing well, as seen in the steadily increasing number of transactions, especially on National Online Shopping Day — the local version of Cyber Monday aimed at public education about safe online transactions — which has been held every Dec. 12 since 2012.

Under these conditions, thousands of local developers entered the mobile application and games market of tens of thousands of gamers and urban dwellers who are optimizing the convenience of technology for a higher quality life.

Best product: Tani Hub team presents their product at a pitching session. The team won a free facility at the working space Conclave in South Jakarta for producing the best product.(JP/Tertiani ZB Simanjuntak)

Global online coupon database Coupofy’s blog recorded Indonesia as the fourth highest country in terms of the number of startups this year with 771,000, after the US, India and the United Kingdom and followed by Brazil with 584,000 startups.

And the number is going up.

Besides the administrations of Jakarta, Bandung and Surabaya that are pushing digital initiatives, local and international startup incubators this year held a series of workshop and pitching events alongside business plan competitions and award events organized by traditional companies seeking a niche in the new economy.

Among the initiatives taken by Google in Indonesia this year were Android Academy, Launchpad Week, Hack for Impact and, most recently, the Indonesian Developer Showcase.

In Launchpad Week that was held from Nov. 9 to 13 in Jakarta, aspiring entrepreneurs took part in workshops and intensive mentoring sessions to help them refine their business models and launch their apps.

For the already existing ones, the event helped them to scale their presence.

Shinto Nugroho, head of public policy and government relations with Google Indonesia, said that the company was committed to supporting the Indonesian government’s initiative and contribute to building its digital ecosystem.

“The size of our population means there is a tremendous pool of talent here. Google is very committed to helping Indonesian developers and startups refine their ideas and help bring them to market,” she said.

Nugroho pointed out how the Indonesian government can benefit from the new economy, aside from increasing employment.

“Indonesians benefit from the convenience and information that apps can deliver. For example, when more public data is shared openly, developers can create an infinite number of apps that help people find healthcare centers, public transportation, emergency services and other key public utilities.

“E-commerce platforms and marketplaces are also allowing small businesses to reach new customers and grow their businesses,” she said.

She also cited a recent report by Deloitte Access Economics showing that doubling broadband penetration rates and lifting digital engagement by small- and medium-scale businesses could increase Indonesia’s annual economic growth by 2 percent — the additional growth it needs to achieve the 7 percent target required to become a middle-income country by 2025.

This year marks the start of a nationwide policy to set up an environment fit for tech startups, accelerating their growth to help them reach ultimate valuations of US$1 billion.

While it seems a far-fetched ambition to start with, the Indonesian government is confident that two such tech companies, called unicorns, could emerge next year.

It has set out a five-year plan to scout thousands of local startups, incubate the selected hundreds and provide them sufficient funding to scale up.

In 2020, so the plan goes, Indonesia is expected to have raised 10 unicorns to be frontrunners in the new global economy.

In order to give access to foreign mentors and venture capitalists, the government will loosen up regulations on foreign direct investment and taxes, among other things.

Although everything is a bit premature at this point '€” a roadmap is still being drawn up '€” there have been some milestones that could favorably drive the tipping points that are required to enable the fast growth of startups.

On internet penetration, according to Google, more than two out of five Indonesians, 43 percent of the population of more than 250 million, owns a smartphone and the penetration of smartphones has increased this year to 61 percent in cities.

Communication and Information Minister Rudiantara also encouraged telecommunications operators to focus on the improvement of 4G broadband before moving on to a 5G network.

The ministry also aimed to see cheaper 4G-enabled smartphones more widely available in the next three years, expecting that a fully optimized broadband network would spur the growth of the digital economy.

Google and TNS Australia recently released survey results about Indonesian online commerce behavior that would be lucrative for any Indonesian startup.

The data shows that each individual installed 31 mobile applications on average and 34 percent of smartphone users don'€™t mind installing paid applications priced under Rp 48,000 (US$3.5).

The online payment system is maturing well, as seen in the steadily increasing number of transactions, especially on National Online Shopping Day '€” the local version of Cyber Monday aimed at public education about safe online transactions '€” which has been held every Dec. 12 since 2012.

Under these conditions, thousands of local developers entered the mobile application and games market of tens of thousands of gamers and urban dwellers who are optimizing the convenience of technology for a higher quality life.