How to create a flourishing local internet ecosystem

2 June 2022

How to create a flourishing local internet ecosystem

The digital economy worldwide is growing so fast, but Southeast Asia is among the regions with the fastest growth rate. Indonesia is one of the countries in the area showing high potential in the digital economy. With an estimated number of digital workers being 1.2 million, its e-commerce gross merchandise value went from $21 billion in 2019 to $32 billion in 2020. 

Southeast Asia's digital economy will double by 2025, but half of this growth will be in Indonesia. So, what are some of the challenges hindering Indonesia from achieving its goal of reaching a digital economic growth of $146 billion by 2025? Why did they introduce Internet Exchange Points (IXPs) and what benefits do they bring? Keep reading to find out. 

Challenges Hindering Equal Internet Access in Indonesia

While Indonesia has grown so fast in e-commerce, equal internet access has not yet been achieved. Here are some of the challenges that have contributed to this.

Infrastructure: Infrastructure is one of Indonesia's most significant shortcomings in reaching equal internet access. This is because people living in the rural parts of the country do not have stable internet connections instead of the ones in cities. The Palapa Ring project is a good start for reaching better connectivity but more has to be done for equal access. 

Regulations: The internet is controlled by the government with many set rules. However, if these regulations are unfavorable, they may hinder technological advancement. Personal data and consumer protection are essential, but they shouldn't hamper innovation and emerging technology. 

Digital Labor: There is still a big difference between the number of graduates in the tech industry and the demand by startups. This means that many companies are struggling to get enough talented tech experts. The best way to solve this problem is for the industry to collaborate with colleges to produce more graduates with cutting-edge digital talent. 

Internet Exchange Point (IXP) and Its Benefits 

In the past, Indonesia didn't have an Internet Exchange Point, which meant that Internet Service Providers (ISPs) had to pay a massive amount for international bandwidth. In the 1990s, if you sent an email to a friend two streets away, the message would travel around the world before reaching them. This was more time-consuming and expensive. 

The creation of IXPs in Indonesia has cut down the expenses for ISPs and has also made the internet much faster and more accessible. It also comes in handy for encouraging entrepreneurs and developers to generate content that meets the local demand. Apart from that, here are other benefits that come along with IXPs. 

● Better resource optimization

● Offers more authority and control 

● Cost-efficient 

● Offers continuous availability 

● It is highly dynamic

● It’s more scalable 

● Provides a better user experience 

Indonesia's tech industry is growing fast to become the digital economic giant in the Southeast Asia region. Internet adoption is skyrocketing, and Internet Exchange Points have played a significant role. However, some challenges such as infrastructure, regulations, and digital talent have to be improved for maximum equal internet access. 


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