Sea of Opportunities: B2B Tech in Indonesia and the Philippines
AIBP Online: Growth Opportunities for Technology in Southeast Asia - Spotlight on Indonesia and the Philippines
As we enter the new year, brimming with opportunities across ASEAN, we had the opportunity to catch up with our guests: Undersecretary Jocelle Batapa-Sigue, Undersecretary for ICT Industry Development, Department of Information and Communications Technology - Philippines (DICT), and Pak Firlie Ganinduto, Vice Chairman of IT at the Indonesian Chamber of Commerce and Industry (KADIN). During this session, they shared valuable insights into the technology landscape in Indonesia and the Philippines.
Indonesia and the Philippines, two of ASEAN’s most populous archipelagic nations, are experiencing a remarkable upswing in their digital economies. The Google Temasek e-Conomy SEA 2023 Report projected that Indonesia’s digital economy, valued at $82 billion in 2023, is expected to double by 2030. The Philippines, with a current digital economy worth $24 billion, is also on an upward trajectory, potentially reaching $80 billion by 2030. This growth, driven by a robust e-commerce sector, especially in the Philippines, where it is expected to triple in Gross Merchandise Value, presents an opportunity for B2B technology firms.
Screenshot of our Moderator and Speakers from the session
Opportunities from Increased Connectivity
The unique geographic diversity of Indonesia’s 18,641 islands and the Philippines' 6,741 islands is more than a logistical challenge – it's a window of opportunity. Undersecretary Jocelle Batapa-Sigue, Undersecretary for ICT Industry Development, Department of Information and Communications Technology - Philippines (DICT) is spearheading initiatives to enhance internet connectivity across these numerous islands, particularly in rural regions. This effort aims to expand digital employment opportunities in the business process outsourcing industry, which currently serves 85 million internet users.
Concurrently, the Philippines Business Process Association Roadmap is striving to expand the outsourcing industry's revenue to $59 billion. In Indonesia, Pak Firlie Ganinduto, Vice Chairman of IT at the Indonesian Chamber of Commerce and Industry (KADIN) highlighted the potential benefits of 5G networks in rural areas, particularly in manufacturing and agriculture, where IoT technology adoption could revolutionise these sectors.
Furthermore, cloud adoption is another burgeoning trend in both countries. Usec. Jocelle expects a significant increase in the Philippines, particularly following the DICT’s launch of the Cloud First Policy. There is a growing requirement among 500 regional government institutions for cloud hosting for their e-government applications.
Demographic Dividend, A Catalyst for Technology Adoption
Both Indonesia and the Philippines are undergoing a significant demographic shift. Indonesia, with its 82.9 million children, and the Philippines, where a third of the population is young, are gearing up for a technological revolution. At the 43rd Edition of AIBP Conference & Exhibition, Indonesia Dr. Nyoman Adhiarna, Director of Digital Economy, Ministry of Communication and Information Technology of the Republic of Indonesia (KOMINFO) pointed out that while the focus on digitalising education is important, the broader impact on B2B technology sectors is immense. Additionally, Usec. Jocelle emphasises the increasing usage of mobile devices and the growing interest in emerging technologies like Web3 and IoT, particularly in the health and travel sectors. The median age of 25 in these countries suggests a tech-savvy generation ready to embrace and drive adoption of innovative solutions across multiple industries.
Strategic Partnerships, Key to establishing regional presence
Navigating the vast markets of Indonesia and the Philippines, with their unique linguistic and cultural nuances, can be challenging. Pak Firlie underscores the importance of localisation for tech firms, emphasising the preference for locally adapted content. Collaborations with reliable local partners, such as KADIN or other government-recognized associations, are crucial for gaining market exposure and establishing a firm foothold. One of the Indonesian Winners in the 2023 AIBP Enterprise Innovation Award, PT HM Sampoerna Tbk., demonstrates this through strategic partnerships, like their collaboration with a Singaporean company to develop AI and Chatbot solutions, highlighting the importance of international technology exchange.
Tech Firms to Capitalise Upon Favourable Policies
Tech companies looking to operate in the Philippines can benefit from favourable policies introduced by the Department of Information and Communications Technology (DICT). Key initiatives include the Startup Innovation Law, offering cost subsidies, office space assistance, streamlined application processes, and research grants. Additionally, the collaboration between the Philippine Economic Zone Authority (PEZA) and the Department of Trade provides incentives for tech companies to establish in certain areas, including a 7-8 year tax holiday, duty exemptions on imports of capital equipment and raw materials, and 2-year PEZA visas for foreign employees. Furthermore, the Filipino government has enabled local governments to attract foreign investments, with 31 digital cities identified for development, enhancing the country's appeal as a destination for technological investment and growth.
Entering markets like Indonesia and the Philippines are attractive for tech companies, but it comes with each of its own complexities. Strategic planning is key to success in these markets.
Tune in to the full session here.
Interested in sessions like these and would like to find out more about opportunities in ASEAN? Join us in the upcoming AIBP Online: Growth Opportunities for Technology in Southeast Asia - Spotlight on Malaysia & Thailand.
