Latest research indicates digital platforms drive economic recovery

Latest research indicates digital platforms drive economic recovery

Research webinar " Ecosystem Impact on the Indonesian Economy 2021: Supporting National Economic Recovery" from the Demographic Institute of the Faculty of Economics and Business, University of Indonesia (LD FEB UI), Thursday (21/10/2021) (ANTARA)

Jakarta (ANTARA) - Digital platforms are found to enable those in the ecosystem to adapt, stay resilient, and eventually rebound amid economic shocks, such as the pandemic, as well as to drive economic recovery.

The findings are based on the latest research from the Demographic Institute of the Faculty of Economics and Business, University of Indonesia (LD FEB UI).

“Our research finds that during an economic shock, Indonesians persist by looking for new sources of income, and most of them dare to take the leap and start digital-based businesses," LD FEB UI researcher Dr Alfindra Primaldhi stated during a webinar, Thursday (Oct 21).

Primaldhi remarked that the existence of digital platforms and their ecosystem offered respite from the economic shock.

"This is particularly for those without business experience who immediately start online business,” he pointed out.

According to the Coordinating Ministry For Economic Affairs, Indonesia is capable of accelerating digital transformation, including in the financial sector, as is apparent from the growth in the second quarter of 2021 at 7.07 percent (year-on-year).

Indonesia was still ranked 85th out of the 131 countries in the digital innovation index in 2020.

The latest research by LD FEB UI into Indonesia’s growing digital economy looked at Gojek as a case study.

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The research, titled “The Impact of the Gojek Ecosystem on the Indonesian Economy 2021: Supporting National Economic Recovery” found that Gojek and GoTo Financial are estimated to contribute 1.6 percent of Indonesia's gross domestic product (GDP), or around Rp 249 trillion in 2021. This contribution increased by 60 percent as compared to the 2019-2020 period.

“The total APBN (State Revenue and Expenditure Budget) allocated for national economic recovery reaches around Rp700 trillion. There is a picture that this is at least a third of the APBN,” Head of LD FEB UI, Turro S. Wongkaren, stated.

The research underlined that while Gojek contributes to the economy each year, it also allows the informal sector actors in its ecosystem, including driver partners and small business owners, to become more resilient and recover faster by way of increasing income in 2021 as compared to 2020.

One notable finding from the research was the ability of the Gojek ecosystem to help its partners continue to grow, so they remain optimistic about using online platforms as a place to make a living.

Optimism among small businesses using the food delivery platform GoFood to sell online was driven by their increased income, which has expedited recovery in the second year of the pandemic. The income of GoFood merchant partners increased by 66 percent on average in 2021 from that in 2020.

Driver partners, who joined Gojek’s ride hailing services GoCar and GoRide driver partners, also recorded an increase in income by 24 percent and 18 percent respectively in 2021 as compared to the previous year. Thus, it indicates that the informal sector in the digital industry feels the effect of and contributes to economic recover.y
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