Tech in Asia Conference 2019 at JCC Jakarta where 300 startups from 15 countries participated last year. (JG Photo/Diana Mariska)

Simpler Regulations Will Help Indonesia's Still-Growing Startup Ecosystem

BY :DIANA MARISKA

FEBRUARY 10, 2020

Jakarta. Complicated and time-consuming regulations remain the number one hurdle for foreign investors in Indonesia, choking essential support for its ever-growing startup ecosystem, a Google insider said.

Sebastian Trzcinski-Clement, Google's head of developer relations and startup ecosystem in Asia, Africa and the Middle East, said that despite an effort from the government to improve the business climate in recent years, Indonesia remains known as a difficult place to invest for foreign individuals or companies.

"It's still complicated today, from the little I know, to invest in Indonesia if you're a foreigner," Trzcinski-Clement said.

"For a foreign investment company, you need quite big capital to invest. Even as a private [foreign] citizen, it's also difficult," Trzcinski-Clement said.

The lengthy process to set up a business is another obstacle that foreign investors must deal with. Trzcinski-Clement said it takes around 40 days for a foreign company to establish itself in Indonesia, and suggested the process could and should be as fast and easy as mobile banking, which is already widely used in Indonesia.

"In Indonesia, you can already open an account online as you have mobile banking, why not make it as easy as possible for creating a startup?" Trzcinski-Clement said.

Besides simplifying regulations, investing in education to create better talents will also be crucial in the growing ecosystem as strong talent is the foundation of a successful startup.

"You may have 270 million people here, but if you don't find the people that you need to work in your startup, that's going to be a very limiting factor," Trzcinski-Clement said.

Startup Trends in Indonesia and Southeast Asia

In his capacity as a Google team member, Trzcinski-Clement also gives his insights on startup trends in Indonesia and Southeast Asia region in the next few years.

Education technology, or edutech, will be one of the most popular and growing sectors in the coming years, particularly in Indonesia.

The edutech market is expanding rapidly as more and more Indonesians look for accessible quality education online.

The second sector with huge potentials is financial technology or fintech. Trzcinski-Clement singled out peer-to-peer lending, saying he had tried some of the platforms himself and found them pretty easy to use.

Trzcinski-Clement said mobile gaming is also growing quite rapidly in the region, particularly independent game developers.

"Something that my team in Singapore is doing a lot in the region is mobile gaming. There are a lot of independent game developers – not big companies, but small game developers. There are few in Indonesia, also across the region," Trzcinski-Clement said.

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