Indonesia’s Internet Pioneers Show Potential for Business

Jakarta Globe, Gabriel Kereh, May 5, 2013.

Yogyakarta painter Iwan Setiyawan is among those artists who have found a
 global customer base thanks to Internet connectivity. (JG Photo/Boy T. Harjanto)

Since vanilla farmer Agus Ramada took his business online in 2010, his customer base has exploded beyond West Java to Malaysia, Japan and even as far as Germany and France.

From his bilingual Indonesian-English blog, Agus sells organically grown Vanilla planifolia to perfumers, bakers and home cooks around the world. The site has so far attracted 10,000 visitors from Malaysia and 8,000 from the United States.

“The raise in our income since we first used the Internet has been significant,” Agus said.

Agus’s is just one success story of what a strong Internet connection can do for small business.

The transformative impact of new technologies was recognized during the week at the Indonesia Digital Society Awards in Jakarta.

At the ceremony on Monday night, the East Java district of Banyuwangi was awarded for its efforts to improve public access to high-speed Internet, as part of a wider push to boost the local economy.

“Businesses, especially those at the micro, small and medium scale, must be encouraged to turn to IT,” district chief Abdullah Azwar Anas said as he accepted the award.

But for most businesses across the archipelago, what is needed is not encouragement to go online, but infrastructure to make it possible.

Connecting businesses

The Indonesian Internet Service Providers’ Association (APJII) says there are 63 million Internet users in Indonesia today, about a quarter of the nation’s population.

“There is uneven availability of Internet access in Indonesia. Java still has greater access than do other parts of Indonesia,” said Gatot Dewobroto, a spokesman for the Ministry of Communications and Information Technology.

The plan is to establish the Palapa Ring project, an initiative to install fiber-optic networks across the country. The ambitious plan has had some trouble getting off the ground.

Then there is the Regency Internet Service Center, which aims to provide Internet services to 5,800 regencies across Indonesia.

The projects are financed by the information and communications technology (ICT) fund, gathered from telecommunications operators who are obliged to contribute 1.25 percent of their yearly revenue.

Finally, the ministry has established the ICT Pura award to show appreciation to regencies able to achieve high Internet literacy rates and inclusive public access.

The ministry aims to secure basic Internet access for all Indonesians by 2015, and high-speed connections for all by 2020.

Gatot said there are two main obstacles to securing universal Internet access in Indonesia.

The first is geography. Extra effort, cost and time are required to build facilities in some areas; for example, cable networks need to be built underwater to reach regional centers like Manado in North Sulawesi and Jayapura in Papua.

The second obstacle to securing universal access is bureaucracy. The Communications Ministry must work in cooperation with the National Development Planning Agency (Bappenas) and the Finance Ministry, delaying consideration of projects. The ICT fund project itself took two years to complete.

“I am not blaming anyone, that is just how it works. But it could also be seen as an obstacle to a certain extent,” Gatot said.

This week, the communications ministry said it had approved implementation of 4G Long-Term Evolution (LTE) by operators holding licenses for the 2.3 gigahertz radio band, backing a technology the industry said could help up to half of all Indonesians get connected.

Connecting people

Besides promoting businesses, the Internet has also proven useful for strengthening communities.

For Ajeng Galih Sitoresni in Yogyakarta, the Internet has not only helped her to earn a living, but also to meet people of similar interests.

Ajeng is the owner of Poyeng, a knitting shop in Central Java that has fostered a community of enthusiasts.

“Poyeng actually started online,” she said. Ajeng started Poyeng as an online shop in 2008, selling goods over a blog and through Facebook.

After receiving expressions of interest from customers, she opened an offline workshop and established monthly meetings in 2010.

The community now has about 100 official members and five to 20 active members at its regular meetings. Most of the members are women aged between 16 and 35.

Ajeng said that about two-thirds of the revenue for the shop comes from online sales. Poyeng now sells products to people across the country — “from Aceh to Papua,” as Ajeng puts it — and has even attracted a few customers in Malaysia.

In Jakarta, the city administration has also taken advantage of online networks to hear the voices of its citizens.

Jakarta Deputy Governor Basuki Tjahaja Purnama signed a partnership memorandum with the Presidential Unit for Development, Supervision and Oversight (UKP4) to create the “Lapor!” (“Report!”) system, a performance monitoring tool.

With this system, Jakartans can send their complaints and suggestions via the “Lapor!” website (lapor.ukp.go.id), via a smartphone application or by text message to the number 1708. The input can be about any aspect of the administration’s performance, from the quality of TransJakarta bus services to the handling of fires.

Ruby Alamsyah, an IT security expert, said the best way to improve Internet access was to pressure operators to increase their reach. This would expand Internet coverage, though the government would still have to provide new infrastructure to ensure high-quality access for everyone.

For Indonesians who already have Internet access, Ruby said, the next challenge is to encourage usage that boosts economic and social development. At present, he said, too many Indonesians are addicted to social media, which is not necessarily a good thing.

“The perspective of many Indonesians toward the Internet is still very narrow and limited to social media,” Ruby said.

“This limited perspective could be changed with better Internet introduction to the younger generation, to let them know about the amount of things that they could actually get from the Internet. This could be started in schools and in families.”