Smart Moves: How AI is Redefining Indonesia’s Enterprise Landscape
Indonesia's economic outlook is promising, with projected GDP growth of 5.0% in 2024 and 2025. The country is also a key player in ASEAN's digital economy, which is expected to double to US$2 trillion by 2030.
Indonesia is positioning itself at the forefront of digital innovation, with ambitious plans to leverage data and artificial intelligence (AI) to drive economic growth.
Following months of interviews and surveys of business, technology, data and transformation leaders among Indonesian enterprises, we officially launched the AIBP Report: From Data to AI: Laying the Groundwork for Indonesia’s Digital Future, co-authored with Snowflake.
This report provides a comprehensive overview of the country's data and AI adoption landscape, the multifaceted impact of AI on business growth, revealing both exciting opportunities and significant challenges for enterprises in Indonesia.
Some key findings among Indonesian enterprises:
Data Infrastructure Challenges: Over 59% of Indonesian enterprises recognize the need for significant changes to their data infrastructure to support digital transformation.
Investment Trends: A majority of Indonesian businesses (65%) are planning moderate investments in AI, focusing on exploring new use cases and upskilling staff.
AI Use Cases: Customer service automation (71%), predictive analytics (51%), and process automation (51%) are the top AI applications being implemented or considered.
Business Objectives: Enhancing customer insights and personalisation (91%) and improving operational efficiency (76%) are the primary goals driving data-driven initiatives.
Implementation Barriers: Data quality and availability (81%) and difficulty integrating AI solutions into existing systems (56%) are the top challenges.
Regulatory Landscape: With the Personal Data Protection Law coming into full effect in October 2024, Indonesian enterprises are prioritising data governance and standardisation to ensure compliance and build trust.
65% of Indonesian businesses are planning moderate investments in AI
The 2024 AIBP ASEAN Enterprise Innovation survey found that more than 30% of businesses and institutions in Indonesia aim to increase their investment spending on digital technologies by more than 20%, slightly higher compared to other countries in ASEAN.
With larger anticipated spending on digital technologies, data infrastructure could be one of the first priorities in order to build a stronger foundation for AI and other future technologies to come.
Laying the Groundwork for Indonesia’s Digital Future: Data Infrastructures and Tools
More than half of Indonesian enterprises feel that significant changes to the data infrastructure are needed to support evolving needs of their organisation’s digital transformation journey, suggesting that many businesses recognize the need for change but may face challenges in adapting their infrastructure, while the small percentage of unsure respondents might indicate a need for clearer AI strategies or better understanding of AI's potential in some organisations.
Enhancing Customer Insights and Personalisation is Top of Mind for Indonesian Enterprises’ Driving Data-driven Initiatives
Focus areas for Indonesian Enterprises:
Unified Customer Understanding
Meaningful Data Insights
Customer-Centric Value Creation
Tailored Strategies and Promotions
More importantly however, is that pain points are different for each industry - a retail company might first focus on prioritising customer and inventory data to drive retail sales, while a manufacturing company might focus on prioritising operational data to maximise equipment uptime and production quality.
State-owned companies and larger groups of companies also have significant advantages when it comes to data resources and technological capabilities. Their scale often allows for more substantial investments in advanced data infrastructure and AI initiatives. At the same time, with size and complex business structures come greater challenges in data integration and accessibility issues including data silos, where information is trapped within different departments or legacy systems, making it difficult to achieve a unified view of their operations.
Costs, Regulatory Requirements, Data Privacy and Security: Indonesian Enterprises’ Top Concerns
51.1% of organisations cite data security and privacy concerns as a primary challenge with their current data infrastructure. The full implementation of the PDP Law is driving enterprises to prioritise compliance efforts, including data standardisation and robust governance frameworks.
As such, Indonesian enterprises may re-evaluate their data strategies to strike a balance between innovation and data protection - effective data governance is not just a legal requirement but also a crucial factor in building customer trust and maintaining competitive advantage.
AI is more than just a tool—it’s a mindset. The company’s focus on fostering a data-driven culture ensures that AI isn’t confined to the IT department but is integrated into everyday decision-making across all teams. This cultural shift is essential for AI to evolve from a novelty to a core driver of business value.
Listen to the ASEAN B2B Growth Podcast episode “Pertamina: Powering Indonesia’s Data-driven Energy Transition” here with Pak Sigit Pratopo, Senior VP of Integrated Enterprise Data and Command Center, Pertamina, how as Indonesia's largest energy company, Pertamina is using data intelligence to transform its operations. With the philosophy that "data is energy," Pertamina is leveraging analytics to optimise its traditional oil and gas business while accelerating renewable energy growth.
Stay tuned and get your copy of the AIBP Report: From Data to AI: Laying the Groundwork for Indonesia’s Digital Future here.
This article was originally written and posted by Valerie Tan.
