GOVERNMENT

22 Mar 2016

JAKARTA, March 23, 2016 – IDC Government Insights’ recently published report “Building Smart Cities in Indonesia - Embracing Digital Transformation and Innovation across Cities" (Doc #AP40984216) reveals that Indonesia is seeing increased interest and uptake in smart city initiatives to boost domestic productivity, quality of life and address the country’s pressing socioeconomic problems. IDC believes city government officials play a critical role in driving the development of Indonesia’s smart city roadmap 2025 by leveraging on digital and other technologies to boost government efficiency and productivity.

With increasing urbanization and trans-migration in Indonesia, there are a number of city sustainability challenges that needs to be addressed. To that effect, the Indonesian government plans to spend more than US$420 billion on infrastructure projects (e.g. telecommunications) over the next 5 years.

As most smart city initiatives focus on collaborations, there is a significant partnering opportunity for smart city government leaders to work closely with experienced solution providers. One evident domain for growth is in smart building solutions. Smart city initiatives can tap on the extensive capabilities from a wide diversity of vendors so as to boost existing smart building core capabilities and functionalities.

"Majority of Indonesian smart city projects have been initiated by local and regional government authorities. They include Telkom, the Department of Transport, and BPJS Kesehatan. However, many of these projects are funded in silos, and often times, they eventually face long-term operations sustainability issues,” shares Sudev Bangah, Country Manager, IDC Indonesia and Philippines. “We believe the federal government needs to step up and invest so as to spur the growing momentum of digital city transformations and ensure long-term progress is maintained for smart city initiatives."

"Cutting-edge technologies for smart city investments such as the Internet-of-Things (IoT), cognitive computing and mobility solutions are tracked in this research. Functionally, key pilots and projects are found in building administration, energy grids, public safety, transportation, and healthcare," says Shreyashi Pal, Asia Pacific Market Analyst, IDC Government Insights.

While the demand and interest in smart city transformations is notably growing, IDC Government Insights believes that ‘prudence considerations' for e-government procurement transparency and accountability and program management competencies need to be in place. This is notably recognized by the Indonesian government.

"The Indonesian government should focus on empowering city planners with sound and actionable investment advisories; build close partnerships with the global smart city solution providers; as well as ensuring competent operations governances are in place to drive effective return-on-investments and project accountability,” recommends Gerald Wang, Head, Asia Pacific Government and Education, IDC Government Insights.

IDC recommends vendors to partner with local governments to support smart city pilots and initiatives as another channel to showcase solution functionality, best practices and business benefits. Citizens or consumers are a driving force in the public and private sector adoption of sustainability initiatives. The more business and residential tenants understand the benefits of smart building technologies, the more pressure is on building owners to adopt these technologies. Vendors should consider partnering with city leaders on citizen messaging that is aligned to their own campaigns in those geographies where they are trying to grow.

The development of ICT in Indonesian cities has opened numerous opportunities and competition for the cities in ASEAN economic community. With Indonesia being a part of this community, we expect that there will be many opportunities for both governments, businesses and citizens alike. Government leaders and city planners that play a significant role in improving the management and operations of the smart city projects will be key towards the long-term success of these programs. Sustained innovations and investing in emerging ICTs must eventually meet the socioeconomic outcomes of public needs.