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A local Silicon Valley
If the government seriously dreams of Tangerang city becoming the Indonesian Silicon Valley, then they have to make sure that the challenges associated with it are properly addressed.
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This image provided by Apple shows the Steve Jobs Theater at Apple Park in Cupertino, Calif. Apple announced that its new headquarters will open for employees in the spring 2017 and will include the theater named for late company co-founder. (Apple via AP/File)
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ilicon Valley-based tech powerhouse Apple Inc. will reportedly open a research and development (R&D) center in Indonesia in just a few months. The R&D center, which is estimated to cost up to US$44 million, is set to operate within the next few months, marked by the historic groundbreaking a week ago.
It is indeed a huge leap for the tech landscape in Indonesia. Having promised in his campaign to boost the Indonesian economy by improving Indonesian workforce competitiveness globally coupled with government-triggered investment in science and tech, the administration of President Joko “Jokowi” Widodo must have welcomed Apple’s action with open arms.
From a business perspective, the company’s investment in R&D here is a no-brainer. Starting from January, the Jokowi administration requires manufacturers selling 4G phones in the country to meet a 30 percent local content sourcing threshold, including financial investments. Thus, Apple has reportedly agreed to build the R&D center in a bid to comply with the local content rule.
Moreover, Apple sees a big opportunity in the country of 250 million people, which has a young, internet-savvy demographic that is among the world’s biggest users of social media. According to International Data Corporation, in the second quarter of 2016, South Korea’s Samsung led with a 26 percent share of Indonesia’s smartphone market by sales volume, trailed by China’s Oppo with 19 percent, both of which have factories in the country.
As a competitor, Apple obviously considers complying with the country’s regulations as a critical step toward grasping a bigger market share on one of the world’s biggest users of social media. It is believed that the Jokowi administration wants to make Tangerang a digital hub, or what they call the “Indonesian Silicon Valley.”
Hence, it is expected that the hub would produce all the excellence and brilliance that Silicon Valley presents to the US economy and technology.
The fact is, however, establishing a Valley-like ecosystem requires a tremendous amount of hard work and visionary planning. Silicon Valley is not merely a site where a clutter of tech companies congregate.
