Indonesia Development Forum 2018

Highlights from PLJ: Best Paper & Fintech for Financial Inclusion Insights

The Minister of Bappenas, Prof. Bambang Brodjonegoro presents Hafida Fahmiasari with the Best Paper Award

The Indonesia Development Forum is a platform for dialogue on national development hosted annually by the Ministry of National Development Planning, in partnership with the Knowledge Sector Initiative and the Government of Australia. The theme of this year’s forum was “Pathways to Tackle Regional Disparities Across the Archipelago” and Pulse Lab Jakarta was pleased to contribute to one of the sessions where we shared findings on our “Banking on Fintech” research study. Congratulations also to Hafida Fahmiasari who received the Best Paper award for her port network analysis research that first got going at one of the Lab’s Research Dive sprints.

This year’s forum announced a call for papers on a range of topics related to regional disparity in Indonesia, such as issues of connectivity and accessibility, access to basic services, local governance, and the use of local natural resources for development.

Maesy Angelina, who manages the Lab’s qualitative research portfolio, presented in a session that focused on discussing solutions to help unlock the potential of the digital economy for regional development. Presenting insights from our fintech for financial inclusion study conducted among more than one hundred micro enterprises in five cities in Java, Maesy underlined two enabling factors that have helped to address mental barriers to fintech adoption: involvement of trusted peers and introducing relevant use cases instead of product knowledge.

For low-income communities, finance is a social activity. Early adopters started onboarding fintech services through trusted peers, either as agents or members in a group lending scheme, because this helps them to feel safer in adopting new technology,” Maesy explained.

We also found that early adopters who were able to successfully adopt fintech made their transition through agents that presented bite-sized specific use cases that meet their needs, instead of introducing them to the entire range of services offered in an app. The full report of this research will be published next month, but in the meantime, here is the background of the research.

A cool graphic recording of Maesy’s presentation sketched out on the spot

In the “Marketplace of Ideas and Innovations” segment at the forum, we heard from Hafida Fahmiasari, who shared her forward-thinking Big Data research on analysing port connectivity in Southeast Asia using Global Marine Vessel Automatic Identification System (AIS) data.

A research study that initially got going at one of our Research Dive for Development sprints at the Lab on trade and competitiveness, the findings confirms that a lack of connectivity between Eastern Indonesia and East Asia exists, and the research suggested that the implementation of Tol Laut can reduce network dependency on Singapore by roughly 8 per cent and on Tanjung Priok by 24 per cent. More broadly, successful implementation of the Tol Laut master plan would also balance maritime networks across Indonesia.

We were very pleased to see Hafida share the IDF stage with other progressive thinkers and innovators working towards a common national development goal, and grew even more excited when the announcement was made that her research was selected as the winner of the Best Paper award at the forum. The Pulse Lab Jakarta team and Research Dive family applaud you, Hafida!

Hafida Fahmiasari accepting the Best Paper Award at the forum

This year’s forum also shed light on the importance of harnessing digital technologies towards building an inclusive digital economy. Prof. Mari Elka Pangestu, an economist and a former Minister of Trade, offered suggestions for the use of internet balloons, drones and other emerging tools to improve internet connectivity in Eastern Indonesia — a region comparably different from Java when it comes to internet connectivity. With these new approaches, the potential for multisectoral regional development across the archipelago can be increased.

This and other insights gathered throughout the forum underscored a primary message at the heart of it all that: our ability to understand and effectively utilise emerging data sets, technologies and innovative methods is crucial for laying the foundation needed to build Indonesia’s digital economy. Notwithstanding, digital technology and new approaches need to be customised to local cultural norms and practices in order to achieve inclusive growth. This article also shares a few other interesting takeaways.

Special thanks to the organisers of this year’s Indonesia Development Forum for giving Pulse Lab Jakarta a platform to share our work. Our research sprint held in March focusing on urban and regional development was also part of a series of planned events leading up to this year’s forum.

We look forward to joining the conversation at next year’s forum on Indonesia’s labour market and solutions for reducing unemployment.

Pulse Lab Jakarta is grateful for the generous support of the Government of Australia.