Indonesia Accelerates Data Center and Cloud Industry Development

DCI Indonesia's president noted that the country's data center and cloud industry is in a rapid growth phase, thanks to the surge in Internet users and rising demand for digital data storage and processing.Despite Indonesia's strong competitiveness in the ASEAN market and the large number of Internet users, there is still a large gap in per capita data center capacity compared to countries such as Japan and Singapore, and there is a significant shortfall in data center capacity to meet domestic digital demand. The Indonesian government has introduced important regulations to lay the foundation for data sovereignty and promote the development of data centers in the country. However, legal certainty and technical clarity in the implementation of regulations need to be improved to attract more foreign investment. There are a number of key challenges to accelerating the construction of data centers in Indonesia, including infrastructure issues such as reliable power supply and uneven coverage of fiber optic networks outside of the greater Jakarta area; cumbersome and slow approval processes; and a scarcity of specialized digital talent, particularly in the areas of operations and cybersecurity. Additionally evolving regulations need to be studied in depth to ensure they do not hinder innovation and provide certainty for businesses. Cross-sectoral collaboration is needed to promote a sustainable data center ecosystem, with sectors such as energy, education, logistics, construction, and finance, as well as technical regulation and data protection, all playing their respective roles. At the same time, the Government's introduction of private sector participation in the national data center project is seen as a strategic initiative to drive the country's digital transformation and enhance data sovereignty.