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.