As the world sets foot into the third year of the COVID-19 pandemic, market uncertainty continues to cast the economic adrift. The new COVID-19 variants significantly hinder the already-asymmetrical recovery amongst countries as a consequence of different inflation rates, global tapering, and stocks slump. Whilst some countries have managed to weather the outbreak, several others still struggle to control it. In Indonesia, aside from the fiscal and monetary policies implemented to advance the COVID-19 recovery, building infrastructure connectivity remains the focus of the country's National Medium Term Development Plan (Rencana Pembangunan Jangka Menengah Nasional). Earlier this year, the government introduced its "Industry 4.0" initiative, which seeks to accelerate the use of advanced technologies to broaden and grow Indonesia's manufacturing capabilities and output. Another focus of the government is to maximizing the structural reform through continuing development of dedicated industrial estates (Special Economic Zones) as part of its efforts to attract foreign companies to relocate their operations in Indonesia. These measures greatly mirror the capital market that has performed better than expected, even reaching an all-time high in November 2021. Although it might not resonate with the current state of the economy yet, it is surely catching up.
The COVID-19 pandemic may also be viewed as a game-changer for the global digital economy, driving the market to adapt to new technology far sooner than anticipated. According to the report "Roaring 20s: The SEA Digital Decade," roughly 21 million new digital consumers entered Indonesia from the start of the pandemic in 2020 until the first half of 2021. Numerous companies have implemented the use of new technology to streamline their business processes and create new products. This also accelerated the development of sustainable start-up businesses and spurred many others to fall into line. Indonesia's internet economy is predicted to be worth US$146 billion by 2025, increasing from a projected US$70 billion in 2022. Recently, tech enterprises, especially digital financial services, also played a significant role in the market. Digital banking acceleration highlights the surge of technology during the pandemic. This trend has formed and arose since 2020 and is now setting the stage for a digitally focused banking future that arrives somewhat earlier than imagined. Moreover, Big tech companies and conglomerates also want to get a piece of the pie by acquiring digital companies and establishing an ecosystem between them. HealthTech companies have also undoubtedly gained a surge of users due to our situations today. The government even contracts these companies to assist them in aiding those who have been exposed to the coronavirus.
Despite market uncertainty, technology usage keeps increasing, especially in e-commerce, FinTech, HealthTech, and EdTech, resulting in global capital continuing to pour into the market given its strong growth fundamentals. This economic advancement underlies the reaction of facing uncertainty and adapting to the massive transformation towards the Indonesian economy in the future. The irreversible trend put the upcoming years of Indonesia's economy and the capital market industry in question. How can Indonesia navigate amidst the uncertainty of economic recovery? How do we adapt to the massive transformations following the immense restart? How would the current growing technology's presence affect the future of Indonesia's capital market dynamics? And finally, is technology fully changing the forms of business and investing, or can it go in parallel with conventional ways? These questions drive how the new Indonesia's economic era will be in the future with countless possibilities going forward.
Sources
Deloitte
PWC
World Bank