Giant property developer PT Sinar Mas Land has allocated between IDR 5 trillion and IDR 6 trillion in the next seven years to build a Digital Hub in the BSD City in Banten, west of Jakarta. The Digital Hub will house community, education institutions, start-ups and multinational companies in technology, digital and creative industries.
Sinar Mas Land Chief Digital Technology Ecosystem and Development Irawan Harahap said that since 2017, the company has spent IDR 1.5 trillion on the Digital Hub project. The budget has been spent on land clearance, plotting the ground and others.
“Our business model is primarily that of a property developer. We sell land and build buildings, and potential start-up companies can rent to own the buildings, but we have to approve them,” he said on October 26, 2022.
Sinar Mas Land is developing the Knowledge Park Building in the Digital Hub, the first smart building in Indonesia. The company will launch TikTok Hub by the end of October, where Tik-Tokers will have access to a production and promotion site, lifestyles and coffee shops – all in one location.
Internet access is available in all infrastructures as Sinar Mas Land has cooperated with network providers and has its fiber optic network. “We have a license from the Ministry of Communication and Informations. We cooperate with all ISPs,” Harahap said.
Digital ecosystem
In addition to the infrastructure, Sinar Mas Land is also developing a digital ecosystem in the Digital Hub. Some companies have participated as tenants, investors, or organically, including unicorns, multinational corporations, and start-ups. It is up to these companies to choose the incentives and benefits they would like to receive in the Digital Hub.
The Digital Hub has been home to four unicorn companies since 2016/2017, such as Traveloka, Ruang Guru, Grab and Tokopedia. “Tokopedia has not announced it , but they have signed up and will begin entering the market this month,” Harahap explained.
Sinar Mas Land also focuses on developing digital talent. The company needs Indonesian talents to compete in the global market. It has collaborated with Singapore’s IBD company, for example, in Batam, to develop IT schools.
“Our friends from Batam can work for global companies with a hub in Singapore. IBD has a job connector, so in four months, these students can visit Singapore and demonstrate Indonesian capabilities in coding, etc.,” Harahap said.
The Australian Monash University has opened a branch in the BSD City. Based on a cooperation agreement, the talents from Monash University will be channeled to Traveloka.
According to Harahap, Sinar Mas Land has supported the development of start-ups as they are typically in survival mode in the first year. In this crucial time, a start-up can rent an office at a subsidized rate at Digital Hub.
In the second year, Sinar Mas Land can assist start-ups in launching their projects. And in the third and fourth years, they usually become more stable. These companies can be sustained by the fifth and sixth year and grow into more prominent organizations. They will receive the incentive by entering the Digital Hubs in BSD City, Batam and Surabaya.
Challenges
Indonesia Property Watch Executive Director Ali Tranghanda said that the Digital Hub at BSD city
would be a long-term investment that needed a huge amount of money. He also said that it would take time to realize the whole investment plan.
Meanwhile, there are a number of challenges facing Indonesian startups today, according to State-Owned Enterprises Deputy Minister Kartika Wirjoatmodjo. “The main challenge for venture capital and startups is scalability. Without offline and online integration, it is difficult to be scalable as investment in offline will be very expensive,” he said on September 27, 2022.
