November 15, 2019 News Magazine

Relocating Indonesian capital will impact nation’s startup ecosystem

Recently reelected, Indonesian President Joko Widodo announced a desire to move the nation’s capital from Jakarta to the East Kalimantan region, citing environmental concerns, the most exigent of these being the fact that Jakarta is literally sinking due to the uncontrolled extraction of groundwater. Widodo said he wished to separate Indonesia’s government from its business and economic hub in Jakarta.

However, what would a move from Jakarta do to Indonesia’s burgeoning startup economy?

Shifting administrative governmental hubs

According to Widodo, studies have determined that the best site for the proposed new capital is between North Penajam Paser and Kutai Kertanegara, both located in East Kalimantan. The basis of this selection is due to studies highlighting the region’s relative protection from natural disasters, especially when compared to other regions. This would definitely be a benefit for the governmental heart of Indonesia, ensuring continuous administrative functions in a disaster-prone region. Other governments have separated administrative centers from their economic hubs with varying degrees of success, with some examples being Brazil’s creation of Brasília, as well as Korea’s projected move from Seoul to Sejong.

What is most interesting to note from prior examples is that these newer branched-out cities are non-surprisingly, heavily government-centric. In Brasília, roles tied to the government make up nearly 40% of all jobs, while in Sejong, a lack of facilities like public transit and commercial mall space cause many to commute into Sejong for government work, instead of permanently settling in the area. Given the semi-undeveloped nature of East Kalimantan, these anecdotes are quite troubling if the government is actually moving to North Penajam Paser or Kutai Kertanegara.

These facts raise the question of economic impacts of such governmental moves. In fact, one may even opine that while these moves do allow for governmental growth, ultimately, they may hurt the country economically due to a divestment between both government and economic hubs. In this specific instance, it is most important to analyze the impact of such a move on Indonesia’s startup economy, as the nation is one the world’s leaders in startup growth.

Indonesia’s startup economy

Indonesia has emerged as a startup hub within Southeast Asia in recent years, with its population of over 260 million marking it as the world’s fourth-most populous country. Additionally, Indonesia’s mobile-first population has enabled the full embrace of the internet era, with 95% of all internet users in Indonesia connected to the web via a mobile device.

Similarly, startup growth has boomed in the island archipelago, with several Indonesian-based unicorns disrupting local, regional, and global economies. Softbank-backed ecommerce giant Tokopedia is currently in talks for a pre-IPO funding round, while emerging super-app Gojek controls significant portions of the ride-sharing industry in Asia, simultaneously expanding into separate industries to include digital payments, food delivery, and even video-streaming. Additionally, online travel portal Traveloka (in which Expedia has a minority stake) has recently entered the financial services space, furthering its impact within Asia. These specific examples of high-growth startups demonstrate a population hungry for innovation, further driving the developing startup economy.


Source: TechCrunch

Tags: in Uncategorized
Banner
Related Posts

A simple data analysis disproves the argument for building a border wall

January 27, 2019

January 27, 2019

Ken Miller Contributor Ken Miller is an investor, writer and advisor to several technology companies and venture capital firms. Previously...

Google’s managed hybrid cloud platform is now in beta

February 20, 2019

February 20, 2019

Last July, at its Cloud Next conference, Google announced the Cloud Services Platform, its first real foray into bringing its...

Backup service IDrive launches a face recognition API for developers

August 23, 2019

August 23, 2019

I did a bit of a double take when I first saw this announcement. IDrive, an online cloud storage and...

SpaceX launches re-flown fairing for the first time and breaks a Falcon 9 booster re-use record

November 11, 2019

November 11, 2019

SpaceX has successfully launched its first batch of production Starlink satellites today, sending 60 of the small satellites to their...

Nvidia and VMware team up to make GPU virtualization easier

August 26, 2019

August 26, 2019

Nvidia today announced that it has been working with VMware to bring its virtual GPU technology (vGPU) to VMware’s vSphere...

Huawei’s P30 Pro excels on the camera front

April 24, 2019

April 24, 2019

It’s been a month since Huawei unveiled its latest flagship device — the Huawei P30 Pro. I’ve played with the P30...

Study finds drivers are clueless about what driver assistance systems can (and can’t) do

June 20, 2019

June 20, 2019

Automakers like Audi, BMW, GM’s Cadillac, Nissan and Tesla have advanced driver assistance systems that are robust enough to take...

The FrankOne is a simple and portable coffee brewing gadget

October 16, 2019

October 16, 2019

The FrankOne coffee maker, fresh off a successful crowdfunding campaign, is now available for purchase, and I got a chance...

India’s Zomato flies drone to deliver food in successful test

June 12, 2019

June 12, 2019

Zomato, one of India’s largest food delivery firms, may have figured out a faster way to crawl through dense populated...

SpaceX details Starship and Super Heavy in new website

September 30, 2019

September 30, 2019

After CEO Elon Musk shared new details about its in-development Starship spacecraft on Saturday, SpaceX has updated its website with...

VCs double down on data-driven investment models

June 26, 2019

June 26, 2019

Social Capital co-founder Chamath Palihapitiya is spinning out a company from his venture capital fund-turned-family-office, TechCrunch has learned. The new...

A huge database of Facebook users’ phone numbers found online

September 4, 2019

September 4, 2019

Hundreds of millions of phone numbers linked to Facebook accounts have been found online. The exposed server contained over 419...

Apple could launch augmented reality headset in 2020

March 8, 2019

March 8, 2019

According to a new report from Ming-Chi Kuo (via 9to5mac), a reliable analyst on all things Apple, the company has...

American tariffs are having a bigger impact on U.S.-based Amazon vendors than their competitors in China, according to SellerMotor

September 9, 2019

September 9, 2019

The series of tariffs imposed by the United States on Chinese goods has impacted both U.S. and China-based Amazon vendors,...

Tiny Robobee X-Wing powers its flight with light

June 27, 2019

June 27, 2019

We’ve seen Harvard’s Robobee flying robot evolve for years: After first learning to fly, it learned to swim in 2015,...

Comments
Leave a Reply

Your email address will not be published. Required fields are marked *