Let's go digital

Let's go digital

Indonesia's almost dormant Internet industry received a
welcome jolt this week from foreign investors, showing their
confidence in the untapped but potentially lucrative local e-
business. Detik.com, a popular local cybernews content provider,
turned itself into a portal service site on Wednesday after it
sold 20 percent of its equity to a Hong Kong internet company. On
the same day, Astaga.com, a wholly foreign-owned operation, made
its debut as an Indonesian portal. Both Detik.com and Astaga.com
are vying for the small but undoubtedly growing e-commerce market
in Indonesia. On Thursday, Catcha Group of Singapore expanded its
Indonesian site, Catcha.co.id, as a content search engine portal,
and announced that it is looking for local companies to form
joint ventures to expand its e-business operations in Indonesia.

This is a quiet foreign invasion into an industry about which
the government seems to be completely ignorant. The Internet
industry is not even on the list of economic sectors touted by
President Abdurrahman Wahid to investors in any of his recent
extensive overseas tours. Thankfully, a number of local giant
corporations like Lippo and Astra have already caught on before
the invasion began. Lippo Life switched from insurance business
to e-business last month, and renamed itself Lippo-E-Net. Astra
Graphia, Multipolar and Metrodata Electronics are other major
local companies which have announced their entry into e-business,
helping to usher Indonesia into the digital era.

Following the rapid global development of information
technology, e-business is the way forward for the Internet
industry. After a period of trial and error processes,
enterprising industrialists have finally found a way of turning
the Internet industry into a money making machine. This is led by
e-commerce which has turned the Internet into a virtual
electronic marketplace, allowing people to buy and sell, as well
as a host of other things. More important than facilitating the
way we do our shopping, e-commerce is revolutionizing the way
people run businesses. Since e-commerce enhances globalization,
it is bound to make international competition even fiercer than
it already is. It is therefore essential for every country to
keep up with this technology if it is to survive globalization.

Compared to other countries, including many of its neighbors,
Indonesia has been slow in jumping onto the e-business bandwagon.
A small fraction of the 210 million people in this country have
access to the Internet. The Association of Indonesian Internet
Service Providers says about 1 million Indonesians are online.
The volume of e-commerce transactions is also minuscule. The
International Data Corporation of the U.S. puts the number of
Indonesians making online purchases at 70,000 this year.

Yet while it is small, the number of Internet users continues
to grow, suggesting that it is not a totally dormant industry.
And with a population of 210 million people, the future looks
promising enough for the likes of Detik.com, Astaga.com and
Catcha.com to try their hand in developing the e-commerce
industry in Indonesia.

The initiative for developing Indonesia's e-commerce so far
has come from the private sector, including foreign investors.
The government's role has been almost negligible. As much as we
like to see the private sector taking the lead, government
support is vital to get e-commerce off the ground. The widely
touted potential will never materialize without strong and
conscious support from the government.

Many of the physical and social infrastructures needed to
build a solid e-commerce industry are lacking here, or worse
still, they do not exist. Most households in this country are not
even connected with telephones. PT Telkom, the government-owned
monopoly for domestic telephone service, has installed 5.94
million fixed lines throughout the country. Very few people have
access to computers, and even fewer with access to the Internet.

Because it is an entirely new and still changing business, the
legal framework for the Internet industry is, understandably,
almost non-existent. But laws and regulations are necessary to
give the industry, and e-commerce, a solid legal footing.

Finally, most Indonesians are still computer illiterate, and
for such a life-death matter to the nation's future, computer
science is not included among the compulsory subjects in the
national school curriculum.

Indonesia's entry into the digital era has been slowed by the
economic crisis and the political upheavals of the last three
years. But with the international business environment
drastically changed by the arrival of e-commerce, Indonesia
cannot afford to remain aloof and hope to survive the global
competition without making some effort. The invasion of foreign
Internet companies on our shores this week, if anything, should
be seen as a wake-up call for the country to rise to the
challenge of the digital era.