President Prabowo Subianto has officially appointed Budi Arie Setiadi as Indonesia’s new Minister of Cooperatives and SMEs, alongside 48 other ministers in the Merah Putih Cabinet.
Budi Arie, who previously served as the Minister of Communication and Informatics, now takes on a new but familiar challenge: leading the digital transformation of Indonesia’s cooperative sector.
“One of my top priorities at the Ministry of Cooperatives is the digitalization of cooperatives,” Budi Arie announced on Monday, October 21, 2024 following his appointment.
In his first 100 days in office, Budi Arie aims to accelerate the digitalization process within cooperatives while improving governance and the capacity of cooperatives’ human resources.
He emphasized the urgent need for cooperatives in Indonesia to embrace modern technology to stay competitive in the rapidly evolving digital economy.
The initiative to transform cooperatives digitally began under the leadership of then Minister Teten Masduki, through the development of the IDX COOP platform.
This platform connects cooperatives with relevant technology providers to streamline their operations. However, the adoption of this initiative has been slow.
According to a 2021 Kompas survey, only 906 out of 123,000 active cooperatives − or just 0.73 percent − had integrated digital technology into their operations.
Furthermore, another survey revealed that over 50 percent of cooperative employees belong to Generation X (ages 41-56), with only 39 percent possessing adequate digital literacy, leading to slow progress in the sector’s digital transformation.
The government is pushing for faster adoption of digital tools to ensure that cooperatives can capitalize on the immense potential of Indonesia’s digital economy, which is projected to reach Rp1,700 trillion (US$109 billion) by 2025.
With 77 percent of the population connected to the internet, and 64 percent regularly engaging in online shopping, the importance of digitalization is more pressing than ever.
Millennials and Gen Z, who make up 53.81 percent of Indonesia’s population, are highly tech-savvy, making it critical for cooperatives to offer accessible and user-friendly digital services, such as 24/7 mobile access for their members.
Budi Arie’s leadership is expected to fast-track this transformation and empower cooperatives to thrive in Indonesia’s growing digital landscape.
