Navigating US-China Technology Competition: An Indonesia Perspective
Indonesia is at a critical juncture as it navigates the intensifying technological rivalry between the United States and China. As Indonesia's two most important economic and technological partners, the United States and China’s growing competition threatens to disrupt Indonesia’s trade, investment flows, market access, and cybersecurity landscape.
However, the report finds that Indonesia remains underprepared, with limited strategic awareness and fragmented regulatory responses. The report highlights how Indonesia’s reliance on US software and Chinese hardware creates vulnerabilities, especially as the two superpowers move toward technological decoupling. Furthermore, Indonesia lacks a unified national strategy, adequate institutions, and sufficient investment in technological capacity to mitigate these impacts effectively.
The report concludes by urging the Indonesian government to implement timely reforms, including investing in national tech champions, harmonizing policies across sectors, improving human resources, and establishing a dedicated agency to address critical technological and cyber issues—warning that failure to act could jeopardize Indonesia's ambition to become the world’s seventh-largest economy.