News feature - Government boosts unicorn development

News feature - Government boosts unicorn development

Industry Minister Airlangga Hartarto (right) and Director General of Small and Medium Industries Gati Wibawaningsih at the launch of Making Indonesia 4.0 Startup in Jakarta (ANTARA News / Sella Panduarsa Gareta)

Jakarta, (ANTARA News) - Rapid technological advancements have enabled Indonesia to boost the development of its digital-based businesses, startup firms, and unicorn companies, thus projected to become Southeast Asia`s biggest digital economy in 2020.

In the development of startup companies, for instance, Indonesia is ranked fourth in the world, with 1,720 startups. Following the success, Indonesia is eager to transform startups into unicorns, pioneer firms, with valuation of at least US$1 billion.

Until now, Indonesia is the biggest country in Southeast Asia in terms of unicorn development. Of the only seven unicorn firms in Southeast Asia, four belong to Indonesia.

This places Indonesia in the fourth rank in the development of unicorns at par with Germany.

According to Communications and Information Technology Minister Rudiantara, entering a digital-based economy, Indonesia is fortunate to have several large startups called unicorns.

The achievements of young Indonesians are able to carve out a legacy or inheritance at an international level that is not only sweet to remember but also serves as an inspiration to other children of the nation.

"The so-called unicorn, with a proud performance, contributes significantly to the nation`s economy," he noted.

Rudiantara remarked that the startup in question was not one only built for fun by youngsters, but it must be seriously developed to become a unicorn. This is because at present, countries in the world are competing to attract foreign direct investment for startups.

"Indonesia is among the luckiest to be the target of world-class startup investors. The results can already be seen. Indonesia is one of the countries with a large number of unicorns growing rapidly," he noted.

Rudiantara expressed hope that Indonesian youth, who in 2030 will become a demographic bonus, would start contemplating on ways to become startup entrepreneurs and no longer restrict their scope to solely becoming chief executive officers, who are basically highest-ranking executives in companies.

"I do not want our nation with young people aspiring only to become employees but how to create business and provide work. Hence, we encourage young entrepreneurs to develop what is called startup," Minister Rudiantara emphasized.

He remarked that Indonesian startups are currently growing rapidly, flexing their muscles to the world, with remarkable achievements, and are also comparable to several unicorns in Germany.

"Not only in terms of unicorns, even in terms of startups, Indonesia has demonstrated its clout," Rudiantara noted while delivering a public lecture on Nationalism in the Digital Era at the IPB Dramaga Campus, Bogor, West Java, Monday (Sept. 24).

Based on data from the startup rankings until March 2018, Indonesia ranked fourth in the world in terms of the number of startups. The United States ranked first, with some 28 thousand startups; India, with 4,700; Britain, three thousand; and Indonesia, at around 1,720 startups.

Thus, Indonesian startups are expected to develop further and transform themselves into unicorn firms. Based on international data on unicorns, as of 2017, of the 359 startup unicorns in the world, China ranked first, with 149 unicorns; outperforming the United States, with only 146 unicorns, followed by Britain, India, and Israel.

"Indonesia is at par with Germany, as we have four unicorns. In the ASEAN, there are seven unicorns, four of which are in Indonesia, and three in our neighboring countries," he pointed out.

However, he remarked that two unicorns of the neighboring countries had Indonesia as their main market. Hence, the minister believes it is highly likely that in 2019, Indonesia will add another unicorn.

The development of startups in the country is apparent from the development of Traveloka, Bukalapak, Go-jeck, and Tokopedia, which are online service and commerce firms. These firms are able to develop fast, with valuations reaching trillions of rupiah in a relatively short period.

According to Rudiantara, Indonesian pioneer companies, which will become unicorn firms, will reach more than five in 2019. Moreover, until now, there are already four unicorn firms: Traveloka, Bukalapak, Go-jek, and Tokopedia.

"Now there are four unicorns, and the government believes that in 2019, there will be more than five unicorns, especially with the `next Indonesia unicorn` program that brings together a feasible startup with potential investors," he stated.

The Investment Coordinating Board (BKPM) will collect investment data received by several digital startup companies following the huge influx of news on capital injected by several giant companies in local startups.

"If we look at the announcement from e-commerce or startup companies, there were several of them. They hit trillions of investments and even tens of trillions, but this figure is still not being reflected in our database," BKPM Head Thomas Trikasih Lembong stated at the presentation on investment realization in 2017 in Jakarta early this year.

Minister of Industry Airlangga Hartarto, who attended the World Economic Forum 2018 in Davos, Switzerland, recently stated that the Indonesian government is focusing on cooperation with various parties to work together to grow startups that could become unicorns in Indonesia.

"Hence, there is a linked match program for entrepreneurs from startups," he explained.

The Industry Ministry has always encouraged the development of domestic startups, especially those supporting the digital industry sector. Moreover, digital technology continues to develop.

The government projects Indonesia to become Southeast Asia`s largest digital economy by 2020 by targeting thousand technopreneurs, business valuations of up to $100 billion, and a total e-commerce value of $130 billion.

"Its backbone is an applicable research center, such as Techno Park," Minister Hartarto stated.

The minister believes that with a large population reaching 262 million, Indonesia can maintain the potential of digital economy in future in line with the development of technology and social media. The penetration of internet users in Indonesia has reached 133 million people, or some 50 percent of the total population.

Furthermore, active users of social media reach 115 million people, or about 44 percent of the total population. The use of smartphones has also reached 371 million, or 141 percent of the total population.





(A014/INE)

EDITED BY INE



(T.A014/A/KR-BSR/A014) 25-09-2018 15:09:24

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