Towards an Inclusive Digital Economy

Palmira Permata Bachtiar, Rendy Adriyan Diningrat, Ahmad Zuhdi Dwi Kusuma, Abella Diandra
Economic Policy, Labor, Migration & Informal Sector, Poverty & Inequality, Social Protection
Indonesia
Briefs, August, 2020, Final

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EXECUTIVE SUMMARY

Indonesia’s current digital economy is not inclusive due to many issues. Firstly, the internet and its supporting infrastructure have not been evenly distributed in rural areas, particularly the disadvantaged, frontier, and outermost (3T) regions. Secondly, even when internet infrastructure is available, it does not necessarily ensure that the access to the internet and its utilization are equal, particularly for women, the poor, the elderly, people with low educational attainment, and people with disability. Thirdly, the digital transformation in business expansion has not been fully achieved. Finally, awareness of the importance of social protection among businesspeople and workers involved in the digital economy ecosystem is still low.

To achieve an inclusive digital economy, it is important to take the following four measures.

  • The government, in this case the Ministry of Communication and Information Technology (Kemenkominfo), needs to ensure that internet infrastructure is available in rural areas, particularly in the 3T regions, as well as for the agricultural sector.
  • In addition to providing internet infrastructure, Kemenkominfo needs to improve digital literacy to ensure that the internet can be accessed by women, the poor, the elderly, people with low educational attainment, and people with disability. This digital literacy improvement needs to be followed by increasing awareness of the importance of owning administrative documents to be able to get involved in the digital economy system.
  • BPJS Kesehatan and BP Jamsostek need to cooperate with online application-based companies to disseminate the importance of social security for businesspeople and workers in the digital economy ecosystem.
  • Especially in the midst of the COVID-19 pandemic, it is important for the Ministry of Trade to postpone the implementation of business legalization. When the pandemic impacts subside, this business legalization should be applied gradually, starting from middle to small to micro enterprises.

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