East Ventures, a pioneering venture capital firm in Indonesia and Southeast Asia, together with Katadata Insight Center, launched on Friday, May 24, 2024, the East Ventures – Digital Competitiveness Index (EV-DCI) 2024, the fifth edition since the annual report was first launched in 2020.
The EV-DCI 2024 research report maps Indonesia’s digital competitiveness with the theme “Realizing Indonesia’s digital sovereignty”. Digital sovereignty is a crucial aspect for countries, including Indonesia, to maximize digital development and become a driver of welfare betterment.
“We are pleased to present the East Ventures – Digital Competitiveness Index 2024 again. Since we launched this report in 2020, our commitment has remained the same: to promote inclusivity and collaboration to achieve digital equity and sovereignty for all Indonesians,” Willson Cuaca, Co-Founder and Managing Partner at East Ventures, said in a statement on May 24, 2024.
“We hope this report can serve as a reference and foundation for all related parties in continuously building Indonesia’s digital ecosystem,” he added.
The EV-DCI 2024 provides data on digital competitiveness in 38 provinces and 157 cities/regencies in Indonesia. Digital competitiveness in various regions of Indonesia continues to show a positive trend, as reflected by the EV-DCI 2024 score of 38.1. This score has increased from previous years, which were 37.8 (2023) and 35.2 (2022).
In the EV-DCI 2024, the top 10 provinces with the highest scores are still dominated by provinces on Java Island, similar to the rankings in the previous year. Sequentially, the 10 provinces are Jakarta, West Java, East Java, Yogyakarta, Banten, Bali, Riau Islands, East Kalimantan, North Sumatra, and Central Java. The four provinces outside Java that are in the top 10 consistently compete with the six provinces in Java.
To observe the overall development of Indonesia’s digital competitiveness, one needs to examine the movement of the index’s median value from year to year. The median value, which has improved consecutively over the past five years, indicates an overall increase in digital competitiveness across all provinces, especially in the mid-and lower-ranking provinces.
The spread or difference between the highest (Jakarta − 78.2) and lowest (Papua Mountains − 17.8) provincial scores for EV-DCI 2024 is 60.4, which is larger compared to the previous year of 52.4 in 2023. This widening spread is influenced by various factors, including differences in each province’s digital development pace and the slowdown in development affected by macroeconomic factors impacting consumer purchasing power.
For example, despite both West Kalimantan and Gorontalo showing improvements in various indicators, Gorontalo’s development has been relatively faster than West Kalimantan’s. As a result, when comparing the index scores, Gorontalo’s score increased by 3.0 points, while West Kalimantan’s score decreased by 3.0 points.
In relation to the macroeconomic factors, Executive Director of Katadata Insight Center, Adek Media Roza, said that the reciprocal relationship between the macro economy and digital competitiveness requires a holistic view from the government.
“The decline in the Information and Communication Technology (ICT) Usage and ICT Expenditure pillars, driven by weakened purchasing power due to inflation and other external pressures, exemplifies how macroeconomic situations affect efforts to strengthen Indonesia’s digital competitiveness. Therefore, the government needs to consider various factors that could hinder the growth of Indonesia’s digital competitiveness,” he said.
