The New Engine of Economic Growth: The Internet
    Category: 4 Digital E-conomy By : Teguh Hidayat Read : 850 Date : Friday, February 19, 2016 - 08:18:16




    When studying the economic growth data for the third quarter of 2015, I was confused by the fact that the level of national consumption grew 4.96%, or above the overall economic growth of 4.73%, whereas the prices of goods is clearly soaring, and should lower purchasing power. But as far as I could observe, almost everybody is still happy, and even workers still demand higher wages. The question is: how can this be?

    But just a few days ago I realized something that might be the answer. I had run out of Internet credits while browsing the Internet on my laptop, but it was already late at night so the store where I could buy credits was already closed. So I browsed the Internet again using my cell phone to look for an online vendor of credits, and found many. I contacted one, who gave me his bank account number. I used e-banking to transfer the money, and credits were sent to me via WhatsApp. The entire transaction took less than 10 minutes, and I only paid Rp 125,000, a discount from the normal price of Rp 150,000 if I had bought the credits in the store.

    This episode made me suddenly realize the role of Internet in making transactions easier than before. The Internet allows at least three things, which previously were almost impossible to occur, namely:

    1. Shorten the time to conduct a transaction.

    2. Make buying and selling more efficient.

    3. Allow transactions to occur any time.

    In this same example, imagine what would have happened if there was no Internet connection. I’d have to wait until the next day to go to the store to buy credits, and consequently there would be a delay of several hours before the transaction happened. I’d buy the credit at the store at a normal price, which would have been more expensive. And third, I would waste the time to make a trip to the store.

    Now, because of the Internet, the transaction is almost frictionless and instantaneous. It takes less than 10 minutes, I pay a lower price and I do not need to leave my desk. Can you imagine how many transactions occurred that night across Indonesia, which would not be possible aside from the Internet.

    In short, economic activities in Indonesia, or even throughout the world, definitely would be less easy today if not for the Internet, and of course it boosts global economic growth. The good news is that currently the e-commerce business in Indonesia is still in its early stages, where the number of Internet users in Indonesia are only 80 million out of 270 million population, but the development is fast.

    Ten years ago, almost nobody thinks about selling on the Internet, but today a variety of e-commerce websites such as FJB Kaskus, OLX, Lazada, Tokopedia, Traveloka are rising in prominence. The Internet also allows others to share their expertise, so if you know about stock investing, then you can post a blog like TeguhHidayat.com. So the opportunity is open for everyone.



    `