Curbing Disparity through Digital Economy

Nusa Dua, InfoPublik - Economic disparity and inequality in the quality of life of the world's population are widening. Based on the Gini Ratio calculation method, those happen due to the limited access to the distribution of income, especially for those who are at the bottom of the socio-economic pyramid.

In the sideline session of the 2018 Annual Meetings of International Monetary Fund-World Bank Group (2018 AM IMF-WB) themed "New Economy Talk: Maximizing Digitalization as Means to Improve Wealth and Income Distribution" on Thursday (11/10), Communications and Information Technology Minister Rudiantara explained some of his views on the challenges of economic disparity that are now being faced and how we can overcome these gaps through digitalization efforts, namely encouraging the digital economy.

"One example of digital innovation that has helped close the economic gap is the Go-Jek digital application," said Rudiantara. He then explained how the Go-Jek application creates a digital ecosystem that is able to bring inclusive digital economic growth, especially in the three priority areas: workforce digitalization, economy sharing and financial inclusions.

Workforce digitalization is the availability of access and employment opportunities in digital business models. Meanwhile, sharing economy is an area where profits and opportunities for business people, especially for Micro, Small and Medium Enterprises (MSMEs) are expanding through digital economic activities. "By creating an open digital economic ecosystem, financial inclusiveness will be created thoroughly and evenly with the increasing need for online payment systems," he explained.

The topic of digital optimization is considered important by economists and international business people because it is motivated by the awareness that digital economy and digitalization are key factors driving the growth of the global inclusive digital economy. Furthermore, digital economic development is also an effort to accelerate equal access to employment opportunities. Data from PwC state that a 10% increase in a country's digitization score can encourage growth of 0.75% of GDP per capita and a 1.02% decrease in the unemployment rate.
"Until this year, Go-Jek has been helping increasing up to 44% of total revenue [or equivalent to an average of Rp3.3 million] of Go-Jek drivers every month," said Rudiantara. "According to reports provided by Go-Jek, its partners’ quality of life and access have also increased by more than 80% from their previous work at this Unicorn company," he continued.

According to World Bank analysis, the selection of the digital model business that is right for the socio-economic conditions of a country will be able to accelerate the country's inclusive economic growth. Recognizing the importance of disseminating knowledge and transfer of information about the digital model business along with its innovations, Rudiantara through this activity provided innovative inspiration through the initiation of programs intended for all countries to join and work together to accelerate the digital economy in their respective countries. It is realized through the creation of digital platform for a globally inclusive digital economic acceleration program called IDEA HUB.

"IDEA HUB is a digital platform to share information or case studies from one country to another in order to provide a conducive environment for socio-economic inclusive digital business models to develop, with the aim of accelerating inclusive growth through the three priority areas that I have mentioned before, namely workforce digitalization, sharing economy and financial inclusions," he concluded.

IDEA HUB is expected to be able to raise policy makers awareness regarding the social impacts and innovations provided by the company to the state, raise issues and needs for policy and regulatory frameworks to promote digital business models that are in line with the socio-economic conditions of a country, and accelerate the development of jobs and human resources by informing the government about the work needs and HR skills requirements needed in the future.

"To work on this, I call on all countries to participate by nominating the best digital business model in their countries and exchanging information as well as giving feedback to each other regarding their experience in supporting digital businesses model that support their country's socio-economic conditions," Rudiantara explained at the end of the event. "I also call on international organizations to support this effort and together join the IDEA HUB," he concluded. (Gusti Andry/Translator: Erik Limantara)