Indonesia Targets 8% Economic Growth by 2029 With AI Productivity Push

Indonesia’s government is pushing wider use of artificial intelligence to raise productivity and national competitiveness, positioning AI as one of the growth engines behind its target of 8% economic growth by 2029. The Ministry of Communication and Digital (Komdigi) outlined the strategy in a statement on August 13, 2026.

The government’s AI strategy

Minister of Communication and Digital Meutya Hafid said digital technology must not stop at growing online activity among citizens. The digital ecosystem, she argued, needs to produce productivity gains, innovation, quality jobs and stronger national technology capability.

“AI development cannot rely only on the ability to adopt technology developed by other countries,” Meutya said in the statement. She said Indonesia needs to build its own capability through research, talent development, computing capacity and innovation, so that available AI technology generates added value for the economy.

Digital economy targets

The ministry cited the e-Conomy SEA 2025 report, which put Indonesia’s digital economy at US$99 billion in 2025, equivalent to roughly Rp1,770 trillion. That figure is projected to rise to US$340 billion by 2030. The government also targets the digital economy contributing 19% of gross domestic product by 2045.

Komdigi is steering digital transformation through three agendas, described as Terhubung (Connected), Tumbuh (Growth) and Terjaga (Safeguarded). They cover connectivity, data centers, cloud services and computing capacity, running alongside efforts on data protection, system security and public trust.

New AI infrastructure and talent programs

To strengthen the national AI ecosystem, Komdigi is developing the Indonesia AI Center of Excellence. The NVAITC Joint Center is part of that initiative, bringing together universities, industry, technology partners and government. The center is supported by the GPU Merdeka facility, which gives students and researchers access to high-performance computing through a GPU-as-a-Service scheme.

The ministry is also working with Universitas Gadjah Mada (UGM) on the Artificial Intelligence Talent Factory (AITF), a program to train AI practitioners and specialists using real-world case studies with guidance from international academics and industry practitioners. The second cohort of AITF was launched alongside the opening of the NVAITC Joint Center.

Early application projects

Several projects developed through the talent pipeline target national problems. Tech4Disaster focuses on disaster mitigation, SmartAgri aims to improve agricultural productivity and irrigation efficiency, and e-Nose TB is designed to help screen tuberculosis non-invasively.

Meutya said the goal is for Indonesian talent to create solutions usable at home and meeting global standards. She stressed that building AI sovereignty does not mean developing every technology independently or closing the door on global technology, adding that collaboration with global companies and partners remains necessary when it strengthens national capability.

FAQ

What is Indonesia’s economic growth target?

Indonesia is targeting 8% annual economic growth by 2029, with AI development named as one of the growth engines to support that target.

What is GPU Merdeka?

GPU Merdeka is a facility supporting the Indonesia AI Center of Excellence that provides students and researchers access to high-performance GPU computing through a GPU-as-a-Service scheme.

What is the AI Talent Factory?

The AI Talent Factory (AITF) is a program run by Komdigi with Universitas Gadjah Mada to train AI practitioners and specialists using real-world case studies.

Source: Katadata

Cover image generated by AI for illustrative purposes only.