Opportunities in Indonesia for the Australian entrepreneur

AGRICULTURE, aviation, marine, defence, e-commerce, cybersecurity, fintech, vocational education and training, future cities and health are among emerging growth sectors in Indonesia . . .

INDONESIA’s economy, currently the world’s 16th largest, is forecast to be the world’s fourth largest individual economy by 2050 – a compelling reason why Australian businesses should enhance engagement, says by Sally-Ann Watts, Austrade’s Jakarta-based Senior Trade Commissioner for Indonesia.

Addressing a series of seminars in Australia, she said three main changes have occurred in the Indonesian market - digital transformation of the economy; the emerging middle class; and opportunity for Australia to help improve living standards and close the skills gap.

The seminars outlined opportunities for Australia in key areas of agriculture (including goods, technology and services), aviation, marine, defence, e-commerce, cybersecurity and fintech, education (transnational vocational education and training), future cities and health.

Watts said Indonesia is now Australia’s 13th largest trading partner, and that, economically, it represents almost 40 per cent of the ASEAN region’s output. It is home to 255 million people.

Along with her team of in-market Trade Commissioners, Watts presented the following summary of industry sectors in Indonesia -  

Agrifood and agtech

Indonesia is an important market for Australia, taking agricultural exports valued at AUD3.2 billion in 2016.

Indonesia’s agricultural sector is undergoing a transformation as the next generation of farmers look to new technologies to increase productivity. Farm and processing enterprises are seeking new technologies to maximise acreage usage and reduce waste.

Aviation

Indonesia’s aviation industry is growing annually at around 15 per cent. Lion Air currently has more planes on order than any other airline, suggesting there may be flow-on opportunities for pilot trainers, airport operators and maintenance, repair and overhaul professionals to get involved in Indonesia’s aviation sector.

Cybersecurity

Malware attacks, spam and other types of email-based scams are common problems in Indonesia. To address this, Indonesia will be implementing a number of initiatives to tackle cyber threats, opening opportunities for cyber security providers.

Fintech

Indonesia has a vibrant fintech scene with more than 70 fintech startups funded in 2016. Australia has a strong relationship with Indonesia in fintech, including a relationship to support financial innovation between ASIC and Indonesia’s financial regulator OJK.

Future cities

An emerging consumer class with more money to spend may see Indonesians in urban centres expect a better standard of living. This will eventually include improved transport solutions, better management of wastewater, access to emergency services and green building solutions to mitigate further environmental degradation.

Health

Implementation of Indonesia’s universal health service is driving the need for efficiencies and innovation across the private and public sectors – the same areas in which Australia’s health entrepreneurs excel.

Infrastructure

The Indonesian Government requires infrastructure investment of approximately US$460 billion and has agreed to open these opportunities to the private sector, rather than directly assigning them to State-owned enterprises.

Resources

Australian METS companies still have significant opportunities to build market share in Indonesia. Providers of mining technology who can clearly demonstrate productivity gains are in demand because, as in Australia, Indonesian miners are grappling with lower prices for commodities.

Demand also remains strong for mining software, specialised and innovative equipment, education and training services and specialised mining consulting.

Startups and e-commerce

Indonesia’s vibrant and internationally linked incubator and startup scene, and strong links to Southeast Asian and US venture finance, have created an innovative e-commerce ecosystem in which to take part. The consumer market has more than 100 million internet users, 70 per cent of whom are on mobile devices.

Vocational Education and Training

The Indonesian Government is prioritising VET system reform and has invited private industry to work with senior high schools and training centres to reform the curricula, and provide internships and apprenticeships.

Indonesia will need an additional 3.8 million skilled workers annually to 2030 – a shortfall of 56 million workers.