Noticing the enormous potential of the digital economy, the Indonesian government created the Gerakan Nasional 1000 Startup Digital (The National Movement for 1000 Digital Startups). After President Joko “Jokowi” Widodo’s visit to Silicon Valley in 2015, the Indonesian government increased its support for the creation of new startups. This corresponds with the president's vision of making Indonesia Asia's digital powerhouse.
This program was initiated by the Ministry of Communication and Information Technology, which collaborated with numerous partners in organizing this program. This article will focus on the currently existing startup ecosystem in Indonesia, what the participants will get from this program, how much this program has contributed, and why this program is relevant for startup practitioners.
Q1: What’s Unique from the Startup Ecosystem in Indonesia
A1: Indonesia is home to many well-known companies that are or were classified as startups. Go-Jek is Southeast Asia's second-largest startup and also a decacorn (a startup with a valuation above $ 10 billion). As of November 2019, in addition to Go-Jek, there are also 4 startups that have been bestowed the unicorn status (a startup with a valuation above $ 1 billion), which are: Tokopedia ($ 7 billion), OVO ($ 2.9 billion), Bukalapak ($ 2.5 billion) and Traveloka ($ 2 billion)[i].
Moreover, there are currently 2,159 active startups in Indonesia[ii]. This means that Indonesia has the world’s 5th largest number of startups in the world and the 2nd in Asia[iii]. Indonesian startups operate in various sectors, such as Ruangguru in education, Alodokter in health, TaniHub in agriculture, and many others.
Q2: What Are the Main Obstacles That Startups Face in Indonesia?
A2: Starting and running a startup is not easy. Various obstacles still exist within the startup ecosystem in Indonesia. For starters, Indonesia still lags when it comes to internet usage. In 2018, only around 40% of the Indonesian population used the internet, lower than the world average of 49.7%[iv].
Moreover, excessive regulations and complicated bureaucracy are also other problems that still haunt the startup ecosystem in Indonesia. In the Ease of Doing Business Index 2019, Indonesia ranked the 73rd out of the 190 surveyed states[v]. This means that Indonesia performed better than most of the other surveyed states. However, Indonesia still ranked behind several other Southeast Asian countries, such as Singapore (2nd place), Malaysia (15th place), Thailand (27th place), Brunei (55th place) and Vietnam (69th place)[vi].
The Indonesian government, under President Jokowi’s administration, is fully aware of this issue and seeks to improve the startup ecosystem in Indonesia and Indonesia’s digital economy in general. The Palapa Ring, a network of fiber optic cables that span tens of thousands of kilometers all across the Indonesian archipelago, was inaugurated in October 2019. Palapa Ring is expected to improve internet service, especially in rural and underdeveloped areas.
Q3: How’s the National Movement for 1,000 Digital Startups?
A3: In addition to building necessary infrastructure, the Indonesian government also provides training for those who are building their startups. The National Movement for 1,000 Digital Startups was started in 2016 and has trained more than 40,000 entrepreneurs ever since[vii]. This program has produced more than 1,000 startups, with notable ones such as Bizhare, Garda Pangan, and Tumbasin. The Indonesian government fully funds this program.
Q4: Why is This Programme Important for Prospective Startup Practitioners in Indonesia?
A4: Having talents that possess the necessary expertise is essential for any startup. Based on an analysis on 101 failed startups, 23% of the respondents claimed that not having the right team was the main reason for their failure[viii]. Hence, having the necessary know-how is crucial for startups.
Therefore, the National Movement for 1,000 Digital Startups provides relevant courses. Participants are able to tailor their learning from the six available programs: Ignition, Networking, Workshop, Hacksprint, Bootcamp, and Incubation.
In Ignition, participants can learn from the experiences of successful startup founders through seminars. Networking is held with Ignition and grants the participants a chance to meet like-minded individuals which can open new opportunities. Meanwhile, Workshop is a 2-day event that focuses on understanding the market and the customers better. Hacksprint helps the participants to develop their products. Bootcamp grants the participant access to one-on-one mentoring in specific topics. Last but not least, in the Incubation program, the startup of the participants can be incubated for six weeks to ensure that it will be ready once it’s on the market.
In the bottom line, the digital economy in Indonesia is very lucrative. 1 startup has been bestowed with the decacorn status, with 4 others granted the unicorn status. However, there is still a lot of unharnessed potential, which is likely to produce more unicorns in the future. Infrastructure and Indonesia’s performance in the Ease of Doing Business Index are the two obstacles that still haunt the Indonesian startup ecosystem, in which the government is currently trying to improve. Besides, the National Movement for 1,000 Digital Startups is also an excellent initiative, as it provides the necessary know-how for startup practitioners. Hopefully, this programme can hatch future unicorns.
[i] CB Insight, 2019. The Global Unicorn Club. [Online]
Available at: https://www.cbinsights.com/research-unicorn-companies
[Accessed 13 November 2019].
[ii] Startup Ranking, 2019. Countries. [Online]
Available at: https://www.startupranking.com/countries
[Accessed 13 November 2019].
[iv] The World Bank, 2019. Individuals Using the Internet (% of the population). [Online]
Available at: https://data.worldbank.org/indicator/it.net.user.zs [Accessed 13 November 2019].
[v] The World Bank, 2019. Doing Business 2019: Training for Reform, Washington D.C.: The World Bank.
[vii] Gerakan Nasional 1000 Startup Digital, 2019. Gerakan Nasional 1000 Startup Digital. [Online] Available at: https://1000startupdigital.id/ [Accessed 13 November 2019].
[viii] Niall McCarthy, 2017. The Top Reasons Startups Fail. [Online]
Available at: https://www.forbes.com/sites/niallmccarthy/2017/11/03/the-top-reasons-startups-fail-infographic/#301c64914b0d [Accessed 13 November 2019]