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Indonesian businesses disrupted, overwhelmed by digitalization
A survey by Baker McKenzie showed that 84 percent of Indonesian businesses felt disrupted, which meant they lagged behind competitors in digitalization efforts, despite a year of accelerating digital transformation.
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Illustration of digital transformation (Shutterstock/metamorworks)
D
espite the rapid digitalization that has been happening over the course of the COVID-19 pandemic, most businesses in Indonesia still consider themselves “disrupted” and face difficulties keeping up with digital transformation, two recent studies show.
A survey conducted by law firm Baker McKenzie on 800 businesses from eight Asia Pacific countries showed that 84 percent of Indonesian businesses felt disrupted over the past year, which meant they lagged behind competitors in digitalizing their operations.
The survey, which was conducted in the first half of this year, also found that only 34 percent of Indonesian businesses felt they had successfully onboarded and monetized new technologies.
A separate Ernst & Young (EY) study found that many nondigital industries in Southeast Asia did not invest enough money over the past few years to mimic digital companies’ success in growing amid the COVID-19 pandemic.
“Businesses said that they had faced an acceleration of business digitalization in the past year but also shared deep anxieties around the pace of keeping up with competitors and risks associated with digital transformation, from cybersecurity, effective adoption of technology to expected heightened regulatory scrutiny,” wrote Baker McKenzie in a statement about the survey on Aug. 12.
The two studies reflect the sentiment of Indonesia’s businesses community, which is struggling to undergo digital transformation despite the pressures of the pandemic and the hurrah over digitalization amid a tech start-up boom in the country.
Baker McKenzie’s study titled “Riding the Next Wave – Digital Transformation Strategies in Asia Pacific” stated that 44 percent of Indonesian respondents felt they were falling behind competitors in establishing technology to support remote working, higher than the 31 percent average in Asia Pacific.
