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7 Reasons Indonesia is Great Place for Startups in APAC Region

The Southeast Asian archipelago country Indonesia is known for its natural resources, pristine island of Bali, sprawling rainforest, beaches, palm trees cultivation, exotic flora and fauna.

However, the country is steadily emerging as the home to a thriving startup scene that is becoming a force to reckon with in the entire Asia Pacific region. A wide range of homegrown startups has already kick-started their operations, while a host of international firms have made the country their second home.

There are some very good reasons why Indonesia is a great place for startups in the Asia Pacific region.

We have listed seven of those:

The early adopter of technologies

From AI to big data, Indonesia has emerged as an early adopter of technology. A recent study conducted by Forrester Consulting on behalf of tech firm Appier revealed that the Southeast Asian country emerged as a leader in the implementation of artificial intelligence (AI) technology in the Asia-Pacific region.

As per the study, 65 percent of respondents in Indonesia stated that they have had either implemented AI in their business or were upgrading or expanding their AI capacity.

Fast-rising middle-class population with rising incomes

Indonesia is witnessing a growing number of fast-rising middle-class population that is young, confident and smart, equipped with sophisticated technological tools. The rise in the income of the middle-class people has raised the purchasing power capacity of the population and enabled them to buy their desired products and services. These factors have benefitted a growing number of startups who are looking to cash in on the fourth highest middle-class population in the world with 19.6 million households.

Home to large international players

Apart from being a fertile ground to homegrown startups such as Jakarta-based travel booking portal Traveloka, Jakarta-headquartered ride-hailing, logistics, and digital payments firm Go-Jek, Indonesian fintech startup Moka; Indonesia is the home to large international startups and its e-commerce market is anticipated to touch $46 billion in a decade. Indonesian President Joko Widodo has set the aim of creating 1,000 technopreneurs by 2020 and a digital economy that is worth $130 billion during the same period.

Government’s focus on infrastructure

The $1 trillion Indonesian economy had been mainly reliant on the country’s natural resources such as coal, minerals and palm oil. However, the country is looking beyond than tapping into its natural resources and aiming to be a key part of the global economy.

The Indonesian Government has ramped up its efforts to improve the country’s infrastructure in a significant way. More than the physical infrastructure, the government is focused on transforming the virtual infrastructure that is the main lifeline of the digital economy, tech-based startups, and almost all major sectors.

The Indonesian government aims to connect all regional capitals to broadband by 2019 and further augment the country’s appeal as a digital economy. With the expansion of broadband networks, the digital sector in the country will grow considerably.

Rising incubators for startups and culture of mentorship

Indonesia is witnessing a considerable shift in the attitudes towards entrepreneurship among its residents due to more and more incubators for startups are opening in the state and a culture of mentorship is strong among the entrepreneur community.

Recently, Indonesian conglomerate Salim Group’s digital division Innovation Factory and Japanese venture capital firm Gree Ventures launched a new startup accelerator named Skala in Jakarta with an aim to guide and finance local and overseas tech startups serving the Indonesian market.

The startup accelerator will invest USD30,000 in each startup it picks in return for a 5 percent equity stake for a period of three months. It invited tech startups from a wide range of sectors to enroll in the program, subject to the formal incorporation prior to their application for the accelerator program.

Increasing talent pool for startups

With growing numbers of education centers and skill development units, the country has a strong talent pool. Indonesian policymakers are making it a point to invest more in educating and training its existing talent pool that will enable them to enhance their employability and be a part of the booming startup scene.

Indonesian colleges including the University of Indonesia, Bandung University of Technology, Jakarta State University, among others are emphasizing on vocational training and making graduates capable to work in fast-paced startups.

Growing number of investors and inflow of foreign capitals

Indonesia is witnessing a growing number of homegrown investors who are increasingly investing in domestic firms and startups who have promising ideas, products, and services.

Furthermore, overseas companies are investing in the country. Foreign Direct investment inflows into the Southeast Asian country have increased and its base has been growing more and more. Last year, FDI investment into the archipelago country reached USD 23 billion, a massive surge from USD 3.92 billion. Accounting for 19.5 percent of total investment in January to June period of 2017, Singapore is the highest investor in the country, followed by Japan with an investment of 17.5 percent during the same period. In the entire 2017, Singapore’s new investment in the country stood at USD 8.44 billion and in the January to June period of 2018, the new investment of the city-state in Indonesia stood at USD 5.04 billion.


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