Indonesian IT awaits more support from the government

Indonesian IT awaits more support from the government

Vishnu K. Mahmud, vmahmud@yahoo.com

Internet search powerhouse Google (www.google.com) recently
announced plans to launch an initial public offering (IPO) on the
U.S. stock market, perhaps heralding a return of the good old
days of the dot-com boom.

Back in the late 1990s, Internet companies were proclaimed as
the new engine of the "wired" economy, with stocks at insanely
high prices, bringing corporate valuations higher than "old"
economy establishments such as Time Warner and Shell.

Indonesia at that time was in its own boom. Slowly crawling
out of the Asian economic crisis, the country was slowly seeing
various Internet websites blossom, offering the latest news,
gossip and services to the growing tech-savvy population.

Names like Astaga!, Detik and Satunet were the kings of the
Indonesian Internet. Complementary businesses, such as Internet
cafes, computer resellers and Internet service providers also
grew, providing new opportunities for entrepreneurs to help bring
the country to a new information age.

Of course, the dot-com bubble burst in early 2000, with sky-
high Internet stocks crashing down to earth. Very few Internet
companies in the U.S. and Indonesia survived, with venture
capitalists running for the hills, refusing to further finance
the next new idea.

The promising cyber cafes, known as warnets (short for warung
Internet, or Internet cafes), slowly began to close up shop due
to lack of interest and rising costs. Some even said the Internet
phenomenon was simply a passing fad.

We must, however, consider the bigger picture. All over the
world, the use of technology -- from computers, mobile phones and
the Internet -- is no longer an option but required.

Companies can raise workplace productivity as well as cut
costs by using the latest tech tools effectively, customizing
them for their businesses. People can learn more about the world
as well as gather interesting insights thanks to mediums such as
the Internet.

In Indonesia, things seem to be going backward. The telephone,
which by default is the primary method for Indonesians to access
the web, has seen rising prices, resulting in perhaps decreasing
numbers of people surfing the net.

There have also been questions about the need for licenses on
the 2.4 GHz frequencies that are commonly declared as "free" by
many countries worldwide, which can be used by anyone, including
small and large companies to cut telecommunications costs by
enhancing business efficiency with wireless connectivity.

However, such acts could imperil the revenue of the state
telecommunications company. And thus, for the sake of profits for
a national company, the future business and educational welfare
of the entire nation has been possibly placed into question.

Yet why is it that countries such as Thailand can successfully
and profitably provide information technology solutions to its
people? The Thai government's Information and Communications
Technology Initiative of offering low-cost computers for its
people is seeding the country with long-term growth, with hopes
of harvesting citizens' IT potential in the near future.

In fact, the Thai government's push for information technology
has managed to compel hardware and software companies to come to
terms with local pricing. Even Microsoft, facing relegation in
the face of the rising Linux operating system, had to introduce
an "entry-level" localized version of its flagship Windows XP
software, in the Thai language, at a fraction of the cost of its
larger cousin.

Thailand is also slowly building its knowledge capital, with
the training of information technology workers in the tourist
resort of Phuket being the latest venture that hopes to attract
foreign investment to this globalized economy.

Our close neighbor Malaysia also has joined the technology
fray, building a world-class IT supercorridor to rival that of
the Silicon Valley in the U.S. to house professional IT services
for the region.

Consider this for Indonesia: With better access to computers
and the World Wide Web, more ideas and businesses can be
developed, partnerships can be forged, knowledge gained and
understanding enhanced.

More people would access the Internet, thus requiring more
localized content and services. More entrepreneurs would
establish businesses, thus raising more taxes for the state.

As a result, more Indonesians could follow and possibly pass
their Southeast Asian counterparts in knowledge, know-how and
experience.

With a significantly higher human capital, Indonesia could
further anticipate new market challenges worldwide and compete
effectively with neighboring countries, and no longer be
considered simply another third-world country with cheap labor.

Also, with effective e-government, taxes could be collected
and distributed transparently, along with other controls that
would allow the general public to keep close watch of its
leaders. This could be done with an IT backbone established and
strengthened by Indonesian technology entrepreneurs.

Is this dream possible? With the proper support of the
government, it can be achieved. Can we build and think in the
long term instead of focusing on short-term profits? Time will
tell.