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Pakdhe Karwo: "E-COMMERCE IN INDONESIA: Development and Role in the Economy"

Pakdhe Karwo: "E-COMMERCE IN INDONESIA: Development and Role in the Economy"

Again, on Wednesday, March 11, 2020, the Master of Economics Study Program, Faculty of Economics and Business Universitas Airlangga (FEB Unair), under the leadership of Dr. Wisnu Wibowo (Coordinator of the Master of Economics Study Program), held a Public Lecture with the theme "E-COMMERCE IN INDONESIA: Its Development and Role in the Economy", presented by Dr. H. Soekarwo (Member of the Presidential Advisory Council of the Republic of Indonesia for the 2019-2024 Period), in the Fadjar Notonagoro Hall, 2nd floor of the Faculty of Economics and Business Universitas Airlangga.

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Pakdhe Karwo's Public Lecture: "E-COMMERCE IN INDONESIA: Its Development and Role in the Economy"

Indonesia has significant and promising digital economic potential, particularly in the e-commerce sector, and has the potential to become the largest in Asia. As Joko Widodo stated in his 2016 Declaration, Indonesia is
"The Digital Energy of Asia."

Research conducted by McKinsey states that the value of Indonesia's digital economy could reach US$150 billion, or around Rp2,040 trillion, and contribute 10% to gross domestic product (GDP) by 2025.

In his lecture, Dr. H. Soekarwo (or often called Pakdhe Karwo), stated that currently the development of e-commerce in Indonesia has the potential to grow very rapidly, but is still not too big. This can be seen from the results of the Central Statistics Agency (BPS) Survey that (The e-commerce survey was conducted with a sample of 3,504 census blocks spread across 101 districts/cities in all provinces in Indonesia) the results obtained were 15.08% e-commerce businesses and 84.92% businesses without e-commerce, this means it is still not too big, but still needs to be vigilant, do not let us enjoy the efficiency resulting from e-commerce, but we forget other important aspects, such as whether, with this e-commerce will be able to bring us to economic superiority in the long term? Which according to Dr. Wisnu Wibowo, as the host/moderator that "e-commerce that advances without being accompanied by strengthening in the industrial sector, will result in us losing a lot of potential progress in the future".

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From right to left: Dr. Wisnu Wibowo – Coordinator of the Master of Economics and Business Studies Program, Airlangga University (and Moderator of the Guest Lecture); Dr. H. Soekarwo – Member of the Presidential Advisory Council of the Republic of Indonesia for the 2019-2024 period.

Then another negative impact of e-commerce business that needs to be watched out for according to Dr. Wisnu Wibowo is, whether the online-based business will risk increasing the number of unemployed in Indonesia, because "we also need to examine whether with the existence of e-commerce, people who get jobs will be more compared to people who have to be eliminated from the job market due to the emergence of e-commerce. So the development of e-commerce that is not balanced with the creation of job opportunities through strengthening the industrial development that we do, then what will happen in the future is that job opportunities will be reduced ".

In his presentation, Pakdhe Karwo explained that in this digital era, the country (whether they like it or not) must adapt to remain competitive, encouraging the transition from a traditional economy to a digital economy with industry 4.0, because as the World Economic Forum Survey noted that Indonesia's investment competitiveness in 2019 fell to 50th position from 45th in 2018, where the decline was mainly caused by the slow implementation of technology. So according to Pakdhe Karwo "it is very dangerous, because if it is too late to reach that position, then the companies they own will also die.".  

According to Pakdhe Karwo, efforts to strengthen MSMEs amidst global dynamics are also crucial. "The key to success is strong collaboration between production, markets, and financing," he said, reinforcing the commitment to building inclusive, MSME-based growth. This growth must be able to reduce poverty, reduce income inequality, and absorb more workers.

Regarding MSMEs, at the end of the session before the question and answer session, Dr. Wisnu Wibowoalso expressed his concerns and requested that this be conveyed to all MSME business actors, that "Not all commodities can actually be e-commerce, for example, for MSME Programs which are characteristic of a region, they are actually not suitable for e-commerce, because once the product is e-commerce, then within a few months the goods will be duplicated with much cheaper production costs, and our icon will disappear from the market.".

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Front from right to left (2-3-4 & 6): Dr. Rudi Purwono – Vice Dean I of FEB Unair; Dr. H. Soekarwo – Member of the Presidential Advisory Council of the Republic of Indonesia for the 2019-2024 Period; Prof. Dr. Dian Agustia, SE., MSc., Ak., CMA., CA. – Dean of FEB Unair; Dr. Wisnu Wibowo – Head of the Master of Economics and Business Study Program, FEB Unair

Hopefully, the public lecture attended by around 375 students from the Undergraduate, Masters and Doctoral Programs of the Faculty of Economics and Business, Universitas Airlangga, can provide enlightenment and open the views of us, the nation's Satria Airlangga, on how we should behave amidst opportunities and challenges while also building awareness of technological progress in the global era for the nation's economy. (iwl)

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