Indonesia's Digital Competitiveness 2023: From Jakarta to the New Papua Province

The utilization of digital technology can significantly boost economic growth. However, digital innovation also risks causing disruption and presenting new challenges for those unprepared.

To address these challenges, venture capital firm East Ventures launched the East Ventures-Digital Competitiveness Index (EV-DCI) 2023 report to measure and map digital competitiveness across Indonesia.

EV-DCI is a collaboration between East Ventures, the Katadata Insight Center (KIC) research institution, and PricewaterhouseCoopers (PwC).

"Through EV-DCI, we want to encourage all stakeholders to participate in driving digitalization and developing the digital economy in Indonesia," said Willson Cuaca, Co-Founder and Managing Partner of East Ventures, in the EV-DCI 2023 report released on Wednesday (5/4/2023).

"The utilization of technology and digitalization should not be concentrated only in major cities," Willson added.

Measuring Digital Competitiveness in New Provinces

East Ventures has been measuring and mapping Indonesia's digital competitiveness index since 2020.

For 2023, EV-DCI added measurements in four new provinces resulting from the division of Papua: Southwest Papua, South Papua, Highland Papua, and Central Papua.

"Data for the four new provinces is calculated from the identification of cities/regencies within them, with a data aggregation process. This is done because data for the new provinces is not yet available," said the EV-DCI research team in their report.

Besides the addition of provinces, the EV-DCI 2023 methodology remains consistent with previous years.

EV-DCI measures regional digital competitiveness based on nine major indicator pillars: human resource (HR) conditions, the level of information and communication technology (ICT) use, ICT expenditure, economic conditions, entrepreneurship and productivity, employment, infrastructure, finance, and regional government regulations and capacity.

The results are then formulated using a 0-100 score system. The higher the score, the better a region's digital competitiveness is assumed to be.

Jakarta's Digital Competitiveness Tops, Central Papua Lowest

Nationally, the median score of Indonesia's digital competitiveness index has increased for three consecutive years.

In 2020, the national EV-DCI index median score reached only 27.9. The median then rose to 32 in 2021, increased again to 35.2 in 2022, and reached 38.5 in 2023.

This increase in the median score indicates that Indonesia's overall digital competitiveness continues to strengthen.

"The government and other stakeholders are making various efforts to help communities in every region cope with digitalization. For example, efforts to digitalize MSMEs have increased internet penetration in promotional activities, sales through social media, and e-commerce," said the EV-DCI research team in their report.

From 2020 to 2023, DKI Jakarta remained the province with the highest digital competitiveness. This year, Jakarta's EV-DCI score also rose to 76.6, compared to 73.2 the previous year.

In 2023, Jakarta received very high scores in the entrepreneurship and productivity (100) and infrastructure (98.2) indicators.

However, Jakarta's score remains low in the regulation and regional government capacity indicator (37.4). This indicator is assessed based on the gross participation rate of senior high schools/vocational schools and higher education, growth in life expectancy, and the suboptimal reduction in poverty.

Meanwhile, Central Papua had the lowest digital competitiveness in 2023. This newly formed province only scored 23.2 out of 100.

Generally, all provinces on Java Island have a digital competitiveness index among the top ranks.

Most provinces on Sumatra and Kalimantan islands have moderate competitiveness, while provinces in Eastern Indonesia are mostly in the lower ranks, as shown in the graph.

In addition to mapping competitiveness, EV-DCI 2023 also provides several recommendations for stakeholders, including the government, businesses, and the public.

The complete EV-DCI 2023 report can be downloaded from this website.