Digital technology can become basis for inclusive economic development

Digital technology can become basis for inclusive economic development

Head of the CSIS Economic Department Yose Rizal during a discussion in Jakarta on Tuesday

Jakarta (ANTARA) - The Centre for Strategic and International Studies (CSIS) stated that digital technology could become a basis for inclusive economic development in Indonesia.

"The biggest beneficiary of digital economic development is the business world, especially micro, small, and medium enterprises (MSMEs) and consumers, so that it can encourage the government's efforts in creating an inclusive economy," Head of the CSIS Economic Department Yose Rizal remarked during a discussion in Jakarta on Tuesday.

The existence of various digital platforms, ranging from the provision of services to goods, has succeeded in absorbing new workforce and realizing economic equality as well as ensuring coverage for all sections of society.

The CSIS statement was based on its research of the Grab application service. Grab has contributed Rp48.9 trillion to the Indonesian economy.

The figure is derived from the income of GrabBike, GrabCar, GrabFood partners, and Kudo agents, or online trading special.

The research was conducted by CSIS on May 7-27, 2018, and from July 2 to August 12, 2018, comprising a dataset of 215 million GrabBike observations and 642 million Grabcar observations.

"The calculation of consumer surplus using big data analysis was conducted in Southeast Asia firstly," he remarked.

The study also revealed that Grab offered income opportunities to around 300 thousand drivers and 40 thousand Kudo agents that were earlier unemployed.

"It is estimated that the economic input of Grab will reach Rp16.4 trillion in 2018," he stated.

The presence of the shuttle service also provides benefits, specifically in the form of consumer surplus. This means consumers reap benefits while buying goods or services at a lower price than the maximum price.

"The benefits generated by Grab is far greater than we had thought, both for consumers and partners," he pointed out.

The results of research on one application service showed that the potential for creating inclusive economic growth in Indonesia will be realized. Moreover, similar studies have not been conducted on the presence of other technology companies in Indonesia.

"The formulation of policies concerning digital economy should take into account the welfare of all parties, so that the benefits can be felt optimally," he added.
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