Expansion of online markets for products and services is a top opportunity for businesses in Indonesia. (Antara Photo/Sigid Kurniawan)

Indonesian Businesses Overwhelmingly Bullish on Growth Compared to Global Peers: HSBC


JULY 08, 2019

Jakarta. Business optimism is on the rise in Indonesia, with 98 percent of local companies surveyed by global investment bank HSBC saying they expect to grow in the next one to two years, beating global optimism.

According to HSBC's latest survey, which was summarized in a report titled "Navigator: Made for the Future," 79 percent of executives from 2,500 companies across 14 markets in Asia-Pacific, Europe, the Middle East, North Africa and North America, said they were upbeat about business growth in the next two years.

The survey, which was released in the last week of June, took samples from Australia, mainland China, Hong Kong, India, Indonesia, Malaysia, Singapore, France, Germany, the United Kingdom, Uni Arab Emirates, Canada, Mexico and the United States.

The respondents were key decision makers and people who have significant input in decision-making and their company's strategic direction.

Opportunities Outweigh Threats

Sumit Dutta, the president director of Bank HSBC Indonesia, said in a statement that "nearly half of Indonesian companies [45 percent] are projecting growth in excess of five percent, which is the highest level across all markets surveyed."

Indonesian companies identified enhancing their customer base and upskilling their workforce as the top drivers of growth, the survey said.

Regarding the future of their businesses, around 74 percent of Indonesian respondents are upbeat that opportunities will outweigh threats.

The survey also found that the expansion of online markets for products and services is a top opportunity for businesses in Indonesia. A total of 31 percent of the respondents agreed with this statement, double the global average (15 percent).

"On the downside, Indonesian businesses identified three obvious threats, most notably the political environment [36 percent], followed by new competitors and competitor performance [33 percent] and exchange rates [26 percent]," Dutta said.

He added that from the survey "we can understand that Indonesian businesses will pursue a wide range of investment opportunities, ranging from research, innovation and technology to selling more products or services online and [improving] skills and training."

Business Innovation & Workforce

HSBC's survey also asked Indonesian executives about business innovation and working environment in their companies. About 54 of them said innovation is imperative to their business to "serve as a growth engine" rather than as a "prerequisite for survival."

Though innovation is acknowledged as a growth engine, the survey found that "costs are the universal barrier to innovation across all markets and Indonesia is no exception."

Executives from Indonesia said skill shortages and underinvestment in technology are considerably higher barriers for Indonesian businesses than those in other markets.

"The earlier emphasis on sourcing new skills is a reflection of the level of concern seen in the extent of the biggest barrier," the survey said.

Internet of Things, 5G and Artificial Intelligence are the most mentioned opportunities for Indonesian businesses in the next couple of years – the highest across all markets.

Respondents expect these technologies will help improve productivity, improve customer experience, advance the supply chain management and boost the quality of products and services.