Fri, 12 May 2000

Is Indonesia significantly gearing up for e-paradigm?

JAKARTA (JP): Indonesian media is now full of articles and advertisements about this new entity that starts with a small "e", like e-business, e-commerce, e-education, e-distribution and e-etc.

More recently we see a proliferation of codes such as B2B and B2C and so on. At the same time we are hearing and seeing more of the other cousin of these e-somethings, the something-dot-coms. What are we getting into? Why are we talking in garbled and even pretentious shorthand? Why indeed? And should we in fact be involved with it?

Globalization is, of course, responsible. Just imagine if we were not affected by the explosive development of the computer, by information transfer and above all the microchip. Isn't it blissful to be ignorant?

We wouldn't have to think about all those white-collar frauds that haunt societies that have gone digital. So what if you can transfer your money from your living room. It is OK of course for those who have money to transfer.

But are the e-somethings limited to these sorts of things only? And is it prudent not to be involved in this exciting development that now appears to be affecting everything and everybody.

It does not matter whether a country is rich and affluent or whether it is a poor and developing country. Globalization and its attendant elements are here to stay.

With globalization, if one accepts that it is inevitable, then one might next expect that there will arise a serious consideration of equity and equality. Because globalization will not work when there are elements of the world which are incapable of participating in the "game". At least it certainly will not work as well.

As for the developing and the less developed nations, there is no choice but to gear up and prepare to be part of the game. Those who do not get on the globalization "train" are said to be left behind forever.

This is not as true now perhaps as a couple of years ago, because it is just as important for the developed world to ensure that everybody participates.

This creates an interesting if not embarrassing paradox in that most people in developing countries still need the very basic necessities while a relatively small percentage pursue the e-world.

In early April this year a seminar was held involving an international consulting company, McKinsey & Co., the Indonesian arm of another international company, IBM, a local internet company with international affiliation and a local Graduate Business School, IPMI, where the current state of the art of e- commerce was presented and discussed.

It was attended by more than 250 people of whom more than 100 were Chief Executive Officers (CEOs) of various local and international companies. IPMI took the opportunity to survey participants on a number of questions, pertaining to not only e- commerce, but the whole new paradigm of how Indonesia will be affected and how people will do business here in the near future. The results are very interesting.

Out of about 100 respondents, 80 percent believed that the e- paradigm would shape Indonesian society by the year 2003, with only 4 percent disagreeing, while 16 percent were undecided.

When asked if this would happen in an exponential way, 51 percent were undecided, but 33 percent, as against 13 percent, felt certain that that's how it will happen.

The responses to just these two questions clearly show that there is little doubt among respondents that within only two years Indonesia will be significantly affected by e-paradigm and that perhaps the uptake will be nonlinear. That is, Indonesians won't be waiting and thinking about getting involved in the e- things.

Such confidence also can be understood from the answers to another three questions in the survey: should e-commerce concentrate on either its marketing, its financing or its operation in order to gain competitive advantage?

On the most positive scale of the answers, that is, "strongly agree", the 100 or so respondent CEOs clearly signaled that its financing is of little concern in relation to its marketing and operation. However, when the whole five scale answers were analyzed , its operation is definitely considered more important than the other two aspects.

This finding may sound paradoxical as one might initially expect that financial or marketing would have been a clear source of competitive advantage. Probing further into the respondents' backgrounds revealed even more puzzles.

Clearly, the majority of respondents have had some systems exposure as 57 percent of them mentioned having websites and 52 percent claimed to run their businesses using computer-integrated systems.

Of the rest, about half are currently constructing their websites and getting their computer-integrated systems, leaving about 20 percent having neither websites nor computer-integrated systems.

What are the implications of all the above? We believe that the time has come for the government to take a more active role in the development of more appropriate education for Indonesians.

At the same time, however, it must also be said, given reformasi (political reform), autonomy, devolution, empowerment and the predilections towards a "hands-off" policy, that the New Order methods of instructions, expedient Presidential decrees, ministerial decrees and government regulations are no longer appropriate.

Much evidence can be presented demonstrating that the bureaucratic implementation of these authoritarian methods do a lot more harm than good. That this is still happening now, under a new minister, a new ministry (of national education) and a new director general of higher education, is absolutely lamentable.

An hour and twenty minutes away in Singapore, the Singapore government is boosting IT manpower by creating a conducive environment for what they call a "career switch" (The Straits Times April 27, 2000); triggered by its Manpower Ministry's considered prediction of needing more than 250,000 infocom workers by the year 2010.

If Indonesia is to even crawl, let alone run with the pack of high achievers in the region, it must no longer compromise and set road blocks to progress. It is ironic that six months after the new director general of higher education took office, decisions of the previous incumbent that did nothing but stop progress in education, are still invoked as late as a few weeks ago.

Indonesian CEOs as reflected in our survey, have clearly indicated which way Indonesia should go with regards e-paradigm. Let us hope that the government and in particular the Ministry of Education, will create a conducive and supportive environment for progress.

This article was co-authored by Nirwan Idrus, executive director at IPMI Graduate Business School, Jakarta, Firdaus Alamsjah and Arif Saharko, both faculty members at the school.