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GoTo contributed significantly to five key GDP sectors in 2023: LPEM FEB UI
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recent study by the Institute for Economic and Community Research at the University of Indonesia’s Faculty of Economics and Business (LPEM FEB UI) has estimated that GoTo Group, Indonesia’s largest digital ecosystem, contributed between Rp 259.6 trillion and Rp 392 trillion to the 2023 national GDP.
Though the figures do not reflect GoTo’s total gross transaction value (GTV), the estimates are based on the added value generated from the activities of companies and its partners in the GoTo ecosystem, specifically its driver partners and merchants.
For the study, researchers used all GoTo transactions, including Tokopedia transactions and other Gojek merchant partners such as GoFood and GoPay merchants, obtained from surveys as the main data source in forming shock or stimulus values for the economic impact calculation model using the input-output method.
The findings showed that GoTo’s overall economic impact in 2023 could be seen in five key GDP sectors. Its contributions in the retail sector, which includes wholesale and retail trade as well as the repair of motor vehicles and motorbikes, has an estimated value of Rp 154.7 trillion to Rp 175.4 trillion.
Following in second place is the manufacturing sector, which includes the indirect impact of business activities carried out by GoTo merchants, with an estimated value between Rp 17.4 trillion and Rp 45.1 trillion.
Indonesia’s information and communication technology sector benefited from GoTo’s business as a digital platform, with an estimated value of Rp 17.41 trillion to Rp 24.56 trillion. At the same time, accommodation and food and beverage activities saw significant impact from GoFood, which contributed a value between Rp 12.40 trillion to Rp 19.68 trillion.
Finally, GoTo’s on-demand and logistics services have positively affected the transportation and warehousing sector, with an estimated value of Rp 12.43 trillion to Rp 21.08 trillion.
LPEM FEB UI head Chaikal Nuryakin noted that despite Indonesia's GDP growth slowing down as a result of global economic challenges, GoTo had consistently made significant contributions to national economic growth.
“2024 will be marked by significant global challenges. However, we still see good potential for Indonesia's economic growth, supported by strong domestic consumption and government spending. We also believe that GoTo, with the support of its broad ecosystem, will continue to contribute significantly to the national economy," said Chaikal.
Based on data from Statistics Indonesia (BPS), the Indonesian economy grew by 5.05 percent in 2023, lower than the 2022 figure of 5.31 percent. The findings are in line with estimates and attributed to the global economic slowdown as well as inflation, which has hindered domestic economic activity.
For 2024, the Indonesian government is optimistic that the economy will grow at a higher rate of 5.2 percent. The International Monetary Fund (IMF) has projected growth of 5 percent this year, while the World Bank and Organization for Economic Cooperation and Development (OECD) have provided estimates of 4.9 percent and 5.1 percent, respectively.
In the first quarter of the year, Indonesia’s economy grew by 5.11 percent year on year (yoy).
Separately, GoTo CEO Patrick Walujo said that as a homegrown company, GoTo aimed to be the pride of Indonesia and contribute to the country’s growth.
“We believe that technology can help society achieve a better future, especially when the technology that is developed benefits people from all levels of society," he said.
“GoTo was born in Indonesia and developed by Indonesians to benefit the Indonesian people. The positive impact the company has on the national economy is something that we are very grateful for, and it also motivates us to ensure that GoTo continues growing sustainably, so that we can bring greater benefits to more people."
Narrowing the digital gaps and reducing unemployment
Findings from the LPEM UI study also showed that between 2015 and 2023, GoTo contributed to a reduction in Indonesia's unemployment rate at the regency/city level by an average of 8.25 percent per year.
In 2023, Indonesia's open unemployment rate decreased by 6.8 percent from 2022, or around 570,856 people. Based on the calculations, GoTo's contribution in reducing open unemployment in 2023 is equivalent to 47,083 people.
Another notable finding is that GoTo's contribution to the reduction in the unemployment rate is greater in areas outside Java, at approximately 21 percent of the total reduction in unemployment in these areas. In addition, GoTo is also contributing to the increase in digital inclusion in areas outside Java and Bali by empowering more Indonesian workers to use the internet.
Between 2018 and 2023, LPEM UI's calculation results show that on average, the presence of GoTo at the city/regency level increases the number of digitally savvy workers by 2.2 to 3.1 percent. Specifically for areas outside Java and Bali, the impact of GoTo's presence is correlated with an increase in the number of digital talents by 3.3 to 4.25 percent in that period.
Meanwhile, a qualitative study involving GoTo alumni, the Communications and Information Ministry, the Manpower Ministry, the Industry Ministry and university representatives has shown that digital platforms such as GoTo have inspired former workers and the wider community to build their own businesses, supported by exposure to company founders and international standard talent.
Chaikal explained that digital platforms such as GoTo could have a positive influence in increasing the availability of digital talent in Indonesia, done by expanding access to technology and learning platforms while also strengthening the diversity and skills possessed by the workforce.
"Digital platforms like GoTo have the opportunity to contribute to the development of digital talent by accelerating the digital transformation process. By holding boot camps, utilizing learning and job platforms, establishing institutions/associations and supporting government policies, GoTo is enabling Indonesians to have easier access to information on job vacancies in the digital sector."
In addition, digital platforms are also able to encourage the growth of tech entrepreneurs in four key ways, namely by providing inspiration, developing relationships, helping them to develop a business mindset and providing technical skills.
"This positive impact can be seen from the availability of various tech entrepreneur training programs in Indonesia," he concluded.
