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Jakarta Post

Jakarta conducive to startups

  • Callistasia Anggun Wijaya

    The Jakarta Post

Jakarta   /   Sat, February 10, 2018   /   11:19 am
Jakarta conducive to startups World's digital cities (JP/

While Jakarta may still lag behind other major cities in terms of internet infrastructure, a recent survey revealed that the capital is one of the world’s leading cities for digital businesses.

According to the Economist Intelligence Unit’s “Connecting Commerce” report, Jakarta ranked 8th among 45 cities in the world with the highest confidence in the environment for digital transformation, beating London, Madrid, New York, as well as its closest neighbor, Singapore. 

Based on a survey of 2,620 business executives in 45 cities worldwide, the city performed best in development of new technologies as well as innovation and entrepreneurship. 

As a thriving economy and home to four startup companies valued at over US$1 billion, also known as unicorns, the city fared better in the two categories compared to Singapore, which is more connected as a city. 

Jakarta was below Shanghai, Manila and Bangalore, among other Asian cities to top the list. 

“Many respondents believe policies pursued at a city level have greater influence on businesses’ digital success than those originating at the national level. This view is especially strong in Asian metropolises such as Shanghai, Beijing, Bangalore and Jakarta, but also in Barcelona and New York,” the report said.

The Indonesian Fintech Association’s director of public policy, Ajisatria Suleiman, said Jakarta is indeed not San Francisco’s Silicon Valley, where many world-class tech companies and skilled professionals reside.

Its strength, he said, came from startup communities and coworking spaces, in which digital entrepreneurs could meet and share their ideas.

“Tech and digital development in Jakarta is very fast at the moment. It is dubbed the next China from Southeast Asia. Venture capitals directly contact these communities,” Ajisatria told The Jakarta Post on Friday.

He said about 80 to 90 percent of 235 fintech companies currently resided in the capital. 

Rieka Handayani, the head of public relations for the Indonesian E-Commerce Association (idEA), said the Jakarta administration had eased the business licensing process for startups. 

“The process to obtain permits is not as complicated as in the past, when the administration asked for so many documents. Now, as long as we have a business plan and a revenue model, we can get permits,” Rieka said.

Some members of idEA said the licensing process in Jakarta and other big cities, such as Bandung and Yogyakarta, was getting easier because of the government’s support for digital businesses, she said.

There are many city-owned and private coworking spaces, as well as virtual offices that digital professionals can use. 

The city administration itself currently manages two coworking spaces — JSC Hive, in Kuningan, South Jakarta, and Jakarta Creative Hub in Kebon Melati, Tanah Abang.

The commitment to reduce the period of business licensing came directly from President Joko “Jokowi” Widodo, who had targeted to improve the country’s ranking in the World Bank’s annual Ease of Doing Business survey 

Jakarta was among the cities surveyed in the study.