East Ventures – Digital Competitiveness Index 2024: Indonesia's Digital Competitiveness Continues to Rise

Indonesia's digital competitiveness has steadily increased over the past five years, coinciding with ongoing national development equalization efforts.

This is evident in the East Ventures – Digital Competitiveness Index (EV-DCI) report, a research collaboration between East Ventures and the Katadata Insight Center.

The EV-DCI has measured digital competitiveness across various Indonesian regions since 2020. The fifth edition of the EV-DCI, released in 2024, assessed 38 provinces and 157 cities/regencies.

The EV-DCI measures digital competitiveness based on 3 sub-indices encompassing 9 assessment pillars, detailed as follows:

* Input: Human Resources, Information and Communication Technology (ICT) Usage, ICT Expenditure
* Output: Economy, Entrepreneurship and Productivity, Employment
* Supporting Factors: Infrastructure, Finance, Regulation and Regional Government Capacity

These pillars are then compiled into a score ranging from 0-100 points. Higher scores indicate better competitiveness.

Based on this measurement method, Indonesia's digital competitiveness shows a positive trend. This is reflected in the national EV-DCI median score, which steadily rose from 35.2 points in 2022 to 37.8 points in 2023, and reached 38.1 points in 2024.

According to the EV-DCI report, this increase indicates an improvement in digital competitiveness, coupled with development equalization, particularly in provinces with mid-to-low ranking competitiveness.

However, a closer examination of the components reveals that this year's increase in digital competitiveness occurred only in 4 pillars: ICT Usage, Entrepreneurship and Productivity, Employment, and Finance.

Meanwhile, the digital competitiveness scores in the other 5 pillars decreased, namely in Human Resources, ICT Expenditure, Economy, Infrastructure, and Regulation and Regional Government Capacity, with score details as shown in the graph. (Note: The graph is not included in the provided text).

According to Adek Media Roza, Executive Director of the Katadata Insight Center, the government needs to respond by holistically addressing digital competitiveness issues.

"The decline in the ICT Expenditure pillar, triggered by weakened purchasing power due to inflation and other external pressures, exemplifies how macroeconomic conditions affect efforts to strengthen Indonesia's digital competitiveness. Therefore, the government must still consider various factors that could hinder the growth of Indonesia's digital competitiveness," said Adek in a press release (May 22, 2024).

In line with this, Willson Cuaca, Co-Founder & Managing Partner of East Ventures, hopes this report will encourage stronger collaboration in national digital development.

"We are pleased to once again present the East Ventures – Digital Competitiveness Index 2024 report. Since its launch in 2020, our commitment has remained the same: to foster a spirit of inclusion and collaboration to achieve digital justice and sovereignty for all Indonesian people," said Willson in a press release (May 22, 2024).

The full EV-DCI report can be downloaded at east.vc/DCI.