Tuesday, November 25, 2014

Indonesia's online boom

Indonesia is rapidly becoming one of the largest online markets in the world. The new government plans to double the number of Indonesians online to 150 million in the coming year. Indonesia already has 70 million Facebook users and is a major Twitter market. Rovio has launched Angry Birds games worldwide from Jakarta. Facebook CEO Mark Zuckerberg last month visited Indonesia and met the President. Online shopping platforms like Lazarda and Toko Bagus are booming. Japan’s SoftBank Corp. and Silicon Valley’s Sequoia Capital invested $100 million into Indonesian e-commerce platform company PT Tokopedia this year. A new tech startup hub.id, has been lauched with government funding. Telkom Indonesia plans investments with Fenox VC, a Silicon Valley-based venture capital firm.

Challenges exist. Indonesia is dominated by smartphones (35 million+) not computers, limiting functionality. There is a longstanding history of policy initiatives failing over time. More computer science and programming in education is critical, along with as engineering. R&D is terribly low tech and universities do not have Technology Transfer Offices (TTOs) to commercialise IP. IP protection is regarded as weak, particularly in enforcement. Few online disputes get resolved through the legal system (for example the longstanding ebay.co.id dispute). 

A lot needs to be done to build an strong online industry and a major part of that will be improving IP protection. The new copyright law is a start but the ministry of communications' online takedown processes will be critical. With numerous stalled attempts to break into the knowledge economy in recent history the new government will need to pull out all the stops to make it work.

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