The Institute for Management Development (IMD) released on Thursday its latest Global World Digital Competitiveness Index, which ranks Indonesia 56^th this year, the same as last year. That compares with second, 26^th and 39^th place held by Singapore, Malaysia and Thailand.

“Indonesia has improved in the future readiness factor, including increased e-participation and online retailing. However, the improvement is counterbalanced by a drop in the level of investment in telecommunication and low internet penetration,” the report says.

Despite the country’s 175.4 million internet users, Indonesia’s internet penetration rate remains at 64 percent as of January, lagging behind Brunei, Singapore and Thailand, where internet penetration rates exceed 70 percent.

However, the country’s combined foreign and domestic investments in transportation, warehouses and the telecommunications sector rose by 6.26 percent year-on-year (yoy) in the January-June period this year to Rp 76.3 trillion (US$5.1 billion), according to Investment Coordinating Board (BKPM) data.

“It would be difficult for us to go up the digital competitiveness rank if we do not carry out an extraordinary digital transformation. Keep in mind that other countries are also continuing to build their digital infrastructure,” Indonesia Information Communications Technology Institute executive director Heru Sutadi told The Jakarta Post on Friday.

He added that Indonesia needed to focus more on completing its digital infrastructure as around 12,000 villages were still without internet access and thousands of others struggled with slow internet services.

Despite the challenges, the IMD noted that Indonesia’s future digital readiness would remain high as entrepreneurs were less likely to fear failure and more businesses had started to adopt big data and analysis.

The report also says that next year’s ranking will likely shed further light on the impact of digital competitiveness during the pandemic as it is based on data from 2019. However, the current assessment can be used to hypothesize about how digital technologies could impact countries’ ability to weather the pandemic.

“The post-COVID world will be characterized by a K-shaped recovery, with two types of economies: those that will recover quickly and those that will recover more slowly. Recovery is driven by many factors, such as the health of public finances. But also, fundamentally, by the digital competitiveness of those economies,”  IMD World Competitiveness Center director Arturo Bris said in a written statement on Thursday.

Economists believe that the K-shaped recovery will widen the country’s income gap in the post-pandemic world.

Meanwhile, the Communications and Information Ministry director general for post and informatics management Ahmad M. Ramli said the government had been able to provide connectivity for most of its citizens.

“The pandemic has created a new digital culture for Indonesia and growth in our digital economy has been able to also include small and medium enterprises,” he told the Post on Thursday.

“This year’s digital competitiveness rank is definitely a point for our evaluation, but even before the report was announced, the President was committed to raising the budget for the national digitalization program.”

President Joko “Jokowi” Widodo announced in August that the government will roll out $2 billion from the state budget for ICT development. The goal is to increase connectivity inclusion, including in providing internet access to around 4,000 villages and subdistricts in Indonesia’s outermost, frontier and least developed (3T) areas.

In line with the president’s goal, the Communications and Information Minister Johnny G. Plate has also set a target to have nationwide 4G internet service by 2022.

Popular

Responsibility to protect

Stocks set for tough week, oil eyes big gains as Middle East war rages

Analysis: Desperately seeking funds for Red and White cooperatives