Hackathon 2025: Hack The Future - Ericsson Indonesia 001

Unlocking Indonesia's Digital Future: How 5G, AI, and Youth Grit Can Drive 8% Economic Growth

In a recent, insightful episode of the "Tech cetera Indonesia" podcast, leaders from the government and technology sectors convened to dissect the blueprint for Indonesia's digital transformation. Hosted by Ignes Messyta, Head of Communications for Ericsson Indonesia, the discussion featured Mr. Sonny Hendra Sudaryana, Director of Digital Ecosystem Development from the Ministry of Communication and Digital, and Mr. Ronny Nurmal, Head of Government and Industry Relations at Ericsson. The conversation explored how a combination of emerging technology, a pro-innovation mindset, and collaborative ecosystems can help Indonesia achieve its ambitious economic goals.

Listen to the Full Episode

• Spotify: [Link to the Spotify episode here]

• Website: [Link to the podcast website or episode page here]

The DNA of Innovation: Diversity and Problem-Solving

At the core of Indonesia's digital journey is the need for an innovator's mindset. According to Mr. Sonny, all innovation begins with solving problems found in everyday life. He pointed to the country's first four unicorns, who he described as "heroes of the digital startup scene". These pioneers succeeded by identifying simple, relatable problems and creating solutions without the support of a mature ecosystem.

Beyond problem-solving, diversity is a critical engine for innovation. Mr. Sonny shared an anecdote from a visit to Google's headquarters, where the tech giant attributed its success to having employees from over 200 nationalities. This diversity of perspectives, cultures, and habits fosters "innovation by design," allowing new ideas to emerge faster than in homogenous groups. With its thousands of languages and rich cultural tapestry, Indonesia is uniquely positioned to harness this power. "Indonesia has great potential, not just from its many problems, but also from the diversity of its human resources," Mr. Sonny affirmed.

From Digital Consumers to Global Producers

Indonesia boasts a significant demographic advantage, with 50% of its population under the age of 30 and being the world's 6th largest app downloader. While this demonstrates a tech-savvy youth, it also highlights a critical challenge. The nation's digital economy, valued at around $90 billion last year, is still heavily based on consumption rather than production. The national hope is to shift this paradigm. "The hope is that we are not just seen as users or a market, but also as producers, actively creating digital companies," stated Mr. Sonny.

This is where global technology leaders like Ericsson play a role. Mr. Ronny emphasized that for a company to survive, it must have innovation in its DNA13. Ericsson invests over $5 billion in R&D annually to create new products and use cases. This innovation extends to fostering local ecosystems, helping startups build applications that run on 4G and 5G infrastructure.

The Fourth Wave: 5G and AI as Enablers for a New Era

Mr. Sonny outlined the evolution of technology in distinct waves:

• The 1970s: The invention of the computer created the "zero cost of computation".

• The 1980s-90s: The internet brought the "zero cost of distribution".

• The 2000s: A combination of cloud, social media, and smartphones, supercharged by the deployment of 4G, changed daily life in Indonesia.

• Today: The fourth wave is driven by 5G and AI, which Mr. Ronny described as powerful enablers for new capabilities, productivity, and automation.

This new wave could lead to the "zero cost of creativity," a concept that may worry some professions but ultimately promises to make processes more efficient and spark unimaginable innovations. "Things we see in sci-fi movies might all come true," Mr. Sonny remarked, adding that old ideas limited by previous technology can now be revisited.

The National Goal: Escaping the Middle-Income Trap

This technological transformation is directly linked to a crucial national objective: achieving 8% annual economic growth. This target is essential for Indonesia to escape the middle-income trap and become a developed country by 2035, the year its demographic bonus is set to peak.

Digitalization is key to hitting this target. Digital industries are inherently more efficient, as measured by the Incremental Cost Output Ratio (ICOR), which is lower for digital companies compared to conventional ones. A lower ICOR means every dollar invested contributes more to economic growth. The engine for this digital-driven growth is the nation's youth, whose innovative ideas are needed to build the future economy.

Fostering a Sustainable Startup Ecosystem

Despite early successes, the Indonesian startup scene has faced a steep decline in investment, dropping from $11.8 billion in 2022 to just $760 million last year. Mr. Sonny identified three primary causes for this downturn:

• Founder Issues: A lack of managerial skills and good corporate governance30.

• Poor Product-Market Fit: Creating sophisticated products that the market is not willing to pay for.

• Lack of True Innovation: A tendency to copy-paste global business models without deep, original research.

The solution lies in building a more robust and collaborative ecosystem. This includes connecting industry problems with research and innovation hubs like universities. Initiatives like the Ericsson Hackathon aim to do just that, creating a space where innovators can develop prototypes and connect with industry players to monetize their solutions.

Episode Timestamps

• 00:00 - Introduction to Tech cetera Indonesia.

• 01:07 - What does an innovator's mindset mean for Indonesia's digital transformation?

• 02:04 - Why innovation stems from problems and diversity.

• 03:45 - The role of tech-savvy youth in the digital economy.

• 05:25 - How Ericsson maintains a culture of innovation globally.

• 08:07 - Discussing 5G and AI as critical enablers for the future.

• 09:51 - The four waves of technology and the massive impact of 4G in Indonesia.

• 13:07 - The government's target of 8% economic growth to escape the middle-income trap.

• 17:02 - Why the startup and e-commerce industries have been declining.

• 18:46 - The three main reasons for startup failure: Founder issues, product-market fit, and lack of innovation.

• 22:08 - How collaborations like the Ericsson Hackathon bridge the gap between innovators and industry.

• 27:25 - The three must-have characteristics for young innovators.

• 32:49 - Final thoughts and a call to action for innovators.

The Three Pillars of an Innovator: Grit, Networking, and Culture

Finally, the guests shared their views on the essential characteristics for young innovators. Mr. Sonny highlighted three keys:

1. Grit: The stubborn perseverance ("ngeyel") to push an idea forward, even when no one else believes in it.

2. Networking: A large network increases a founder's survival rate by providing access to help and resources.

3. Culture: A societal culture that accepts failure as a part of the entrepreneurial journey is crucial for encouraging risk-taking.

Mr. Ronny added the importance of professionalism, particularly in governance and finance, to maintain investor trust. He concluded with an empowering message for Indonesia's youth: "Our potential is huge, so don't accept defeat. I am sure that if our young people are given the opportunity, they will shine".