Jakarta. Indonesia has great prospects as a digital economy giant as the country is home to the sixth-most startups in the world, according to a senior government official.

“As of 2023, Indonesia is in sixth place among countries with the most startups. We have more than 2,400 startups,” Rudy Salahuddin, a deputy at the Coordinating Ministry for Economic Affairs, told the 2023 Open Finance Summit in Jakarta on Wednesday.

Startup Ranking data shows that the US is in the lead with 74,944 startups. Followed by India (15,405) and the UK (6,833). Canada and Australia have 3,712 and 2,638 startups, respectively. In sixth place is Indonesia with 2,486 startups. This makes Indonesia the only ASEAN member in the top 10 countries with the most startups. Startups in ASEAN member Singapore reach 1,103, putting the country in 11th place.

Rudy also told the conference that many Indonesian unicorns came from the e-commerce and financial technology (fintech) sectors. 

According to Rudy, Indonesia last year also accounted for $77 billion, or around 40 percent of the digital transaction value in the ASEAN region. The number is forecast to jump by twofold to $130 billion in 2025.

“Investment in the digital sector is on the rise. We have secured $3 billion worth of investment deals [in the digital sector]. This is the second-highest after Singapore,” Rudy said.

Despite the great internet economy prospects, there still lie many areas that Indonesia needs to work on. Indonesia’s internet penetration has only reached 76 percent of its population. Only 51.8 percent of Indonesians aged older than 15 years have bank accounts, much lower than in Asia-Pacific countries. Indonesia's micro, small and medium enterprises (MSMEs) still struggle to access financing, according to Rudy.

“However, e-commerce and fintech transactions continue to be on the rise. The digital gap and low financial inclusion become an area that digital players, particularly e-commerce and fintech, can try to tap into,” Rudy said.

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