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Hatchlings:
Startup workers share working space at Kejora HQ in the Barito Pacific
Building in Jakarta. The government aims to have 10 unicorn startup
companies in five years’ time.(JP/Jerry Adiguna) - See more at:
http://www.thejakartapost.com/news/2015/12/29/a-year-breakthrough-establishing-a-breeding-ground-unicorns.html#sthash.1LTJ4n9z.dpuf
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This year marks the
start of a nationwide policy to set up an environment fit for tech startups, accelerating their
growth to help them reach ultimate
valuations of US$1 billion.
While it seems a far-fetched
ambition to start with, the Indonesian government is confident that
two such tech companies, called
unicorns, could emerge next year.
It has set out a
five-year plan to scout thousands of local startups, incubate the selected hundreds and provide
them sufficient funding to scale up.
In 2020, so the plan goes, Indonesia is expected to have
raised 10 unicorns to be frontrunners in the new global economy.
In order to give
access to foreign mentors and venture capitalists, the government will loosen up regulations on
foreign direct investment and taxes,
among other things.
Although everything is a bit premature at this point — a roadmap is still being
drawn up — there have been some
milestones that could favorably drive the tipping points that are required to enable the fast growth of startups.
On internet
penetration, according to Google, more than two out of five
Indonesians, 43 percent of the
population of more than 250 million, owns a
smartphone and the penetration of smartphones has increased this year
to 61 percent in cities.
Communication and Information Minister Rudiantara also encouraged telecommunications
operators to focus on the improvement of
4G broadband before moving on to a 5G network.
The ministry also
aimed to see cheaper 4G-enabled smartphones more widely available in the next three years, expecting
that a fully optimized broadband network
would spur the growth of the digital economy.
Google and TNS
Australia recently released survey results about Indonesian online commerce behavior that would be
lucrative for any Indonesian startup.
The data shows that each individual installed 31 mobile applications on average and 34 percent of
smartphone users don’t mind installing
paid applications priced under Rp 48,000 (US$3.5).
The online payment
system is maturing well, as seen in the steadily increasing number of transactions, especially
on National Online Shopping Day — the
local version of Cyber Monday aimed at public
education about safe online transactions — which has been held
every Dec. 12 since 2012.
Under these conditions, thousands of local developers entered the mobile application and
games market of tens of thousands of
gamers and urban dwellers who are optimizing the convenience of technology for a higher
quality life.
Global
online coupon database Coupofy’s blog recorded Indonesia as the fourth highest
country in terms of the number of startups this year with 771,000, after the
US, India and the United Kingdom and followed by Brazil with 584,000 startups.
And the number is going up.
Besides the administrations of Jakarta, Bandung and Surabaya that are pushing digital initiatives, local and international startup incubators this year held a series of workshop and pitching events alongside business plan competitions and award events organized by traditional companies seeking a niche in the new economy.
Among the initiatives taken by Google in Indonesia this year were Android Academy, Launchpad Week, Hack for Impact and, most recently, the Indonesian Developer Showcase.
In Launchpad Week that was held from Nov. 9 to 13 in Jakarta, aspiring entrepreneurs took part in workshops and intensive mentoring sessions to help them refine their business models and launch their apps.
For the already existing ones, the event helped them to scale their presence.
Shinto Nugroho, head of public policy and government relations with Google Indonesia, said that the company was committed to supporting the Indonesian government’s initiative and contribute to building its digital ecosystem.
“The size of our population means there is a tremendous pool of talent here. Google is very committed to helping Indonesian developers and startups refine their ideas and help bring them to market,” she said.
Nugroho pointed out how the Indonesian government can benefit from the new economy, aside from increasing employment.
“Indonesians benefit from the convenience and information that apps can deliver. For example, when more public data is shared openly, developers can create an infinite number of apps that help people find healthcare centers, public transportation, emergency services and other key public utilities.
“E-commerce platforms and marketplaces are also allowing small businesses to reach new customers and grow their businesses,” she said.
She also cited a recent report by Deloitte Access Economics showing that doubling broadband penetration rates and lifting digital engagement by small- and medium-scale businesses could increase Indonesia’s annual economic growth by 2 percent — the additional growth it needs to achieve the 7 percent target required to become a middle-income country by 2025.
“By going online, the report also shows that small and medium businesses are one-and-a-half times more likely to increase employment and can experience up to 80 percent higher revenue growth,” she added.
It was still difficult to map out the landscape of startups in Indonesia since it was very diverse, not to mention the conglomerates of traditional businesses entering the market with their “online business” versions.
They technically cannot be categorized as startups, but nevertheless they contribute to the dynamics of the digital economy.
Not only as players, these conglomerate families this year offered commitment to tech startups as angel investors or venture capitalists, some of them in collaboration with international networks.
Tech community media platform Tech in Asia made a list of 10 conglomerates that joined in the tech boom, namely: Lippo Group (MatahariMall), Sinar Mas (aCommerce, HappyFresh), Emtek (Bobobobo, Bukalapak), Salim Group (shares in Rocket Internet), Djarum (Kaskus, BliBli), Kompas Gramedia Group (Skystar Capital), Ciputra Group (Ciputra GEPI incubator), MedcoEnergi (Grupara VC, Maskoolin), MNC Group (MNC Tencent) and Bakrie Group (Path).
The startups trend would clearly continue in the coming year with the government taking the lead in its development.
The question of whether the time is right to establish two unicorns in 2016 would, however, remain with the awareness of the projected bubble phenomenon, as what happened to once highly valued tech startups such as Dropbox, Square and Snapchat.
Nugroho reminded the Indonesian government of the importance of a robust and supportive regulatory framework for e-commerce and tech companies to thrive and for the ecosystem to grow.
“Indonesia is at the beginning of the growth stage for startups. We understand that the government is working with multiple stakeholders to create the framework and we are encouraged to see them providing input from the entrepreneurs as well as reflecting users’ needs.”
Besides the administrations of Jakarta, Bandung and Surabaya that are pushing digital initiatives, local and international startup incubators this year held a series of workshop and pitching events alongside business plan competitions and award events organized by traditional companies seeking a niche in the new economy.
Among the initiatives taken by Google in Indonesia this year were Android Academy, Launchpad Week, Hack for Impact and, most recently, the Indonesian Developer Showcase.
In Launchpad Week that was held from Nov. 9 to 13 in Jakarta, aspiring entrepreneurs took part in workshops and intensive mentoring sessions to help them refine their business models and launch their apps.
For the already existing ones, the event helped them to scale their presence.
Shinto Nugroho, head of public policy and government relations with Google Indonesia, said that the company was committed to supporting the Indonesian government’s initiative and contribute to building its digital ecosystem.
“The size of our population means there is a tremendous pool of talent here. Google is very committed to helping Indonesian developers and startups refine their ideas and help bring them to market,” she said.
Nugroho pointed out how the Indonesian government can benefit from the new economy, aside from increasing employment.
“Indonesians benefit from the convenience and information that apps can deliver. For example, when more public data is shared openly, developers can create an infinite number of apps that help people find healthcare centers, public transportation, emergency services and other key public utilities.
“E-commerce platforms and marketplaces are also allowing small businesses to reach new customers and grow their businesses,” she said.
She also cited a recent report by Deloitte Access Economics showing that doubling broadband penetration rates and lifting digital engagement by small- and medium-scale businesses could increase Indonesia’s annual economic growth by 2 percent — the additional growth it needs to achieve the 7 percent target required to become a middle-income country by 2025.
“By going online, the report also shows that small and medium businesses are one-and-a-half times more likely to increase employment and can experience up to 80 percent higher revenue growth,” she added.
It was still difficult to map out the landscape of startups in Indonesia since it was very diverse, not to mention the conglomerates of traditional businesses entering the market with their “online business” versions.
They technically cannot be categorized as startups, but nevertheless they contribute to the dynamics of the digital economy.
Not only as players, these conglomerate families this year offered commitment to tech startups as angel investors or venture capitalists, some of them in collaboration with international networks.
Tech community media platform Tech in Asia made a list of 10 conglomerates that joined in the tech boom, namely: Lippo Group (MatahariMall), Sinar Mas (aCommerce, HappyFresh), Emtek (Bobobobo, Bukalapak), Salim Group (shares in Rocket Internet), Djarum (Kaskus, BliBli), Kompas Gramedia Group (Skystar Capital), Ciputra Group (Ciputra GEPI incubator), MedcoEnergi (Grupara VC, Maskoolin), MNC Group (MNC Tencent) and Bakrie Group (Path).
The startups trend would clearly continue in the coming year with the government taking the lead in its development.
The question of whether the time is right to establish two unicorns in 2016 would, however, remain with the awareness of the projected bubble phenomenon, as what happened to once highly valued tech startups such as Dropbox, Square and Snapchat.
Nugroho reminded the Indonesian government of the importance of a robust and supportive regulatory framework for e-commerce and tech companies to thrive and for the ecosystem to grow.
“Indonesia is at the beginning of the growth stage for startups. We understand that the government is working with multiple stakeholders to create the framework and we are encouraged to see them providing input from the entrepreneurs as well as reflecting users’ needs.”
Tertiani ZB Simanjutak/UrbanIndonesia
source: The Jakarta Post