Outlook for the e-conomy 2017
    Category: Outlook 2017 By : Will Ongkowidjaja Read : 1115 Date : Tuesday, November 08, 2016 - 14:28:53

    I have just returned from attending Harvard Business School (HBS) for its Owner / President Management (OPM) Program, HBS’ three-year program for business owners and entrepreneurs. Reflecting on Indonesia’s Internet economy in 2016, I can’t help but recall a quote from Thomas Edison, cited by our HBS OPM faculty head, Professor Lynda Applegate: “Without execution, vision is just another word for hallucination.” Looking back at Indonesia’s Internet economy this year, I can confidently say that, in 2016, we have seen visions executed into reality.

    This has been a banner year for Indonesia’s Internet economy where our technology ecosystem continues to strengthen across three key pillars: (1) People, (2) Infrastructure, and (3) Funding. On people, there is increasingly good talent in Indonesia, consisting of both local and returning Indonesians, along with foreigners attracted by our nation’s potential. As a venture capitalist, a key part of what I do is meet entrepreneurs, and it is fantastic to see more people across various walks of life create tech startups. On infrastructure, there are more options for entrepreneurs to jumpstart their business, such as formal mentorship or incubation/accelerator programs. On funding, an influx of capital can now help fund startups.

    So what’s next in 2017? I believe Indonesia is experiencing an exciting transformative growth chapter, and with three big trends:

    First, big data analytics and artificial intelligence will enable businesses to unlock value. In 2016, Indonesian tech firms spent aggressively to acquire customers. However, for sustainable growth, companies must not only acquire users, but also retain them to create long-term value. Thus companies must leverage big data analytics and artificial intelligence to better understand their customers to create value-add. A good example is Amazon. According to McKinsey, over 30% of what consumers purchase on Amazon comes from product recommendations based on sophisticated algorithms and predictive models.

    In Indonesia, microlender UangTeman leverages its own proprietary data analytics model with both traditional and alternative data to assess borrowers’ creditworthiness. In addition, Sale Stock, a women’s fashion company, uses artificial intelligence to improve conversion rates with customized information when consumers access its mobile app or its mobile website.

    We will continue to see big companies work with specialized big data analytics companies to unlock value. For example, big data analytics firm Dattabot has helped a leading fast moving consumer goods (FMCG) company by hyper-profiling consumers in order to increase revenue. Dattabot helps this firm better understand consumers to more effectively distribute their products at outlets, down to the village level. Dattabot leverages the company’s data from SAP and Salesforce, and integrates them with Dattabot’s proprietary big data analytics and an artificial intelligence machine. This activity requires intelligent machines to analyze massive amounts of data from different sources. As a result, this client achieved an over 40% revenue increase compared to its historical single digit growth rate.

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