Innovation-Friendly Digital Rules Could Add Rp582.8 Trillion to Indonesia’s Economy, Study Says
A new study by Meta and Deloitte estimates that more innovation-friendly digital regulation could add Rp582.8 trillion to Indonesia’s gross domestic product by 2035, while creating up to 870,000 full-time equivalent jobs. The research, titled Innovation-Enabling Regulation for the Digital Economy, examines six areas of digital policy including data governance, e-commerce and artificial intelligence.
- The Meta-Deloitte study says adaptive digital regulation could raise Indonesia’s GDP by 1.1% by 2035 and create up to 870,000 full-time equivalent jobs.
- Data governance is the largest contributor, potentially adding up to US$17.3 billion in GDP by 2035.
- The study also finds that 80% of Indonesian workers report using AI in the workplace.
What the research covers
The study examines six digital policy areas: data and privacy, digital and cross-border trade, business competition policy, platform governance, e-commerce and AI governance. Based on its modelling, policies that are more adaptive and supportive of innovation could increase Indonesia’s GDP by 1.1% by 2035.
Among the six areas, data governance offers the largest potential contribution. The research estimates that innovation-supporting data governance could add up to US$17.3 billion, or around Rp308.36 trillion, to GDP by 2035. That potential comes from helping businesses adopt digital technology more effectively, raise productivity and take fuller part in the digital economy.
Other policy areas with economic potential
Reforms to platform and e-commerce governance could contribute an additional US$7.1 billion, or about Rp126.55 trillion, to GDP by 2035. AI governance reform is projected to add US$6 billion, while digital and cross-border trade reform could contribute US$1 billion, or around Rp17.82 trillion.
The research also highlights the importance of reducing barriers to safe cross-border data flows and aligning different rules, steps it says can help companies operate more efficiently, cut costs and reach new markets.
Why regulation matters now
With high adoption of new technology, the need for regulation that gives businesses certainty is growing. The study notes that 80% of workers in Indonesia say they already use AI in the workplace, and clearer governance frameworks that support innovation can give companies confidence to invest and implement AI in their operations.
Berni Moestafa, head of public policy for Meta in Indonesia and the Philippines, said collaborative, adaptive and innovation-supporting policy frameworks will play an important role in supporting long-term economic growth. He added that businesses across Asia-Pacific are already using AI and digital technology to raise productivity, reach customers and open new growth opportunities.
Meta and Deloitte said the study concludes that Indonesia has a significant opportunity to accelerate digital economy growth through policies that facilitate trusted cross-border data flows, reduce regulatory fragmentation and encourage innovation, while strengthening the country’s position as a digital market leader in Southeast Asia.
FAQ
How much could digital regulation reform add to Indonesia’s economy?
The study estimates Rp582.8 trillion in additional GDP by 2035, equivalent to a 1.1% increase, along with up to 870,000 full-time equivalent jobs.
Which policy area has the biggest economic impact?
Data governance, which could add up to US$17.3 billion to GDP by 2035 according to the research.
Who conducted the study?
The research was conducted by Meta and Deloitte, and reported by Katadata.
Source: Katadata
Cover image generated by AI for illustrative purposes only.
