Ecosystem Deep Dives #4: Indonesia - Asia's powderkeg
Why Indonesia's start-up ecosystem is poised for economic and impact growth.
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An entrepreneur's paradise, a politician's nightmare.
Made up of over 17,000 islands inhabited by around 270 million people, Indonesia is one of South East Asia's demographic giants. Its economy is growing fast. According to a joint study by the World Bank and the IMF, Indonesia will be the world's 5th biggest economy by 2024. Internet penetration has tripled in 10 years, and the country's growing middle class, who bring with them augmented buying power, is proving to be a golden opportunity for the country's entrepreneurs.
And Indonesian entrepreneurs have definitely not missed that opportunity. The capital city, Jakarta, placed second on Start-Up Genome's 2020 "emerging market ecosystem" ranking. This put Jakarta's start-up ecosystem ahead of renown cities such as Barcelona and Dubai. With a total value of $26.3B, Indonesia as a country boasts the most valuable start-up ecosystem amongst all other emerging markets. Indonesia is also parts of the CIVETS group (Colombia, Indonesia, Vietnam, Egypt, Turkey and South Africa), a group of countries deemed by investors to have explosive growth potential in the next decade.
The Indonesian ecosystem is interesting to compare with one of its neighbours, Singapoure, which is often referred to as the "Silicon Valley of South East Asia". While Singapoure, due to its small size and wealth, specializes in IP heavy, deep-tech start-ups, a lot of Indonesian start-ups succeed by bridging small, yet essential gaps in the lives of many Indonesians. A good example of this is Warung Pintar, a successful Indonesian start-up which digitizes and streamlines the operations of the many small, cornershops (called "warungs") that are a omnipresent in the lives of almost all Indonesians. However, some Indonesian start-ups are also active in advanced tech, with organization such as the Indonesian Blockchain Association leading the charge.