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Airlangga discusses digital trends, low-carbon economic growth with Silicon Valley CEOs
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s part of President Joko “Jokowi” Widodo's working visit to Stanford University on the sidelines of the APEC Summit in San Francisco, the United States, Jokowi held a meeting with CEOs from major companies in Silicon Valley.
At The CEO of the Silicon Valley – Luncheon event at Stanford University Campus, Palo Alto, on Thursday, Coordinating Minister for Economic Affairs Airlangga Hartarto representing President Jokowi delivered a keynote speech and held discussions with Silicon Valley CEOs.
CEOs in attendance included Scott Cook (founder and chairman of Intuit, director of eBay and Procter & Gamble), Julia D Hartz (cofounder and CEO of Eventbrite), Javier Olivan (COO of Meta), Jeff Williams (COO of Apple), Bret Taylor (Silicon Valley AI entrepreneur; former co-CEO of Salesforce and former chairman of Twitter), Drew Houston (board member of Facebook, cofounder and CEO of Dropbox), Divesh Makan (founder of ICONIQ Capital, LLC), Tim Dattels (partner of TPG and chairman of TPG Asia), along with Arun Majundar (dean of Stanford Doerr School of Sustainability) and John Hennessy (chairman of Alphabet; president emeritus of Stanford University from 2000 to 2016).
During his speech, Airlangga said the event was extraordinary because of the CEOs in attendance, with those in attendance representing a market capitalization of US$7.3 trillion, or the equivalent of around six times Indonesia's GDP of $1.3 trillion. In comparison, the largest GDP of the Group of 20 members is held by the US at $25.46 trillion, followed by China at $17.96 trillion.
Airlangga also noted the outlook for global economic growth, which was revised down to 3 percent in 2023 and 2.9 percent in 2024. High inflation and tightening liquidity will still put pressure on global financial conditions, while slowing Chinese growth and rising geopolitical tensions will slow the world trade performance.
Amid global uncertainty and a slowdown, he continued, Indonesia's economic fundamentals are still good with strong economic growth compared with other countries.
Indonesia was able to maintain growth of around 5 percent for seven consecutive quarters, with growth of 4.94 percent in Q3 2023. This growth rate is accompanied by a controlled inflation rate at 2.56 percent year-on-year in October 2023 and improving social indicators. The latest Economic Outlook report from the IMF estimates that the Indonesian economy will grow by 5 percent in 2023 and 2024.
"Talking about the future means we will discuss two main things, namely those related to digitalization and decarbonization. We realize that currently the Fourth Industrial Revolution has disrupted many economic activities,” Airlangga said, adding that artificial intelligence (AI), robotization and ChatGPT are among factors that can disrupt the working world.
He highlighted the Leaders Declaration in New Delhi, India on Sept. 9 to 10, where G20 leaders paid special attention to the responsible use of AI, while President Jokowi also said there was no need to be afraid of AI, as it continues to be developed even though there are no regulations yet. On the other hand, he said, it is necessary to anticipate a larger role for AI by preparing the competencies to become an AI engineer and expert as much as possible.
In addition to digitalization changing the landscape of the global workforce, the world is also facing a climate change crisis, where every country must take joint responsibility for reducing carbon emissions.
"We need to continue collaborating to turn Indonesia into a global digital hub in Asia, and we want to do it in a low-carbon way. The digital economy in Southeast Asia is led by Indonesia, which is growing significantly. Indonesia and ASEAN are huge potential markets in developing the digital economy," Airlangga explained.
The total population of ASEAN is more than 640 million people, with 480 million connected to the internet. In 2023, ASEAN's digital economic value is projected to reach a gross merchandise value (GMV) of $218 billion, with Indonesia being the largest contributor in ASEAN, which will reach around $130 billion in 2025.
As the chair of ASEAN for 2023, Indonesia has also been able to strengthen the foundations of the ASEAN economy through several economic priority programs, one of which is accelerating negotiations on the ASEAN Digital Economy Framework Agreement (DEFA) as a strategy to accelerate digital economic transformation in the region. The growth of ASEAN's digital economic value is predicted to continue to increase to reach $2 trillion in 2030 with the implementation of the DEFA.
"We also believe that Indonesia can become a leader in providing environmentally friendly energy in the region," said Airlangga, noting that Indonesia is rich in important minerals such as nickel, copper, bauxite and silica, all of which are needed for battery materials.
In addition, he outlined Indonesia’s significant clean energy potential in terms of hydroelectric, geothermal and solar power, with an estimated potential of 3,600 gigawatts. In this way, Indonesia will be able to become a place for the development of digital technology such as environmentally friendly data centers.
In his closing remarks, Airlangga said Indonesia is currently in the accession process to join the OECD as an effort to accelerate the transformation toward a developed country.
“Let's work together. The government cannot achieve this alone. We need the support and collaboration of all parties to face various challenges in the future. I hope that this forum can become a catalyst for world economic growth, and become a trigger that encourages you to develop your business and drive the Indonesian economy," he concluded.
This article was published in collaboration with Coordinating Ministry for Economic Affairs Republic of Indonesia
