<article>Indonesia has nearly doubled its public spending on incubating tech-based businesses from Rp 190 billion ($14.1 million) to Rp 370 billion ($27.6 million), a government official said.</article>

Indonesia has nearly doubled its public spending on incubating tech-based businesses from Rp 190 billion ($14.1 million) to Rp 370 billion ($27.6 million), a government official said.
The number seems minuscule still when compared to the funds the archipelago’s neighbouring countries are setting aside. Malaysia has budgeted for RM200 million ($46 million) to support its local startups, and Singapore recently introduced a new S$200 million ($146 million) startup building programme. Thailand, too, recently announced a Digital Economy Fund worth $147 million.
The gesture is seen as more of a political statement from President Joko ‘Jokowi’ Widodo, who himself has repeatedly sworn that Indonesia would be on its way to becoming Asia’s digital hub under his watch.
Jumain Appe, directorate general of innovation at the Indonesian technology and higher education ministry, told reporters in Jakarta that the increased budget shows the government’s commitment to push innovation and entrepreneurship.
“We are targeting about 60 incubation units from which 500 startups are expected to be created,” he explained.
The government had funded 45 incubators with last year’s budget.
Jokowi’s administration continues to look for pockets of funding to catch up with the private sector that has dominated the budding industry. It has said that <a style="color: #000080;" href="https://www.dealstreetasia.com/stories/indonesia-set-up-new-scheme-financing-for-local-startup-support-by-local-vc-40886/" target="_blank" rel="noopener noreferrer">it is looking at</a> converting a part of the government’s credit facilities for micro, small and medium enterprises (SMEs), labelled people’s business credit (KUR), into venture capital funds to be deployed in startups. Reports say that some of the KUR money has started to be deployed.
In another potential scheme, the government is mulling a <a style="color: #000080;" href="https://www.dealstreetasia.com/stories/indonesia-to-use-uso-fund-for-startups-57591/" target="_blank" rel="noopener noreferrer">plan</a> to make use of the the universal services obligation (USO) fund, which was originally intended to provide telco infrastructure in rural areas before being halted in 2015 due to lack of sourcing.
The private sector is also ready to help. The Indonesian venture capital and startups association (AMVESINDO) has previously expressed interest in assisting the government to set up a national VC fund, which will pool investments from the country and abroad to invest in tech-based early-stage businesses.
While there seems to be a strong inclination from the government, bureaucracy remains the biggest hurdle in making any of these plans a reality.
As the chairman of AMVESINDO, Jefri Sirait, once put it, it’s often the people’s mindset.
“Investing in startups, where failure rate stands at 90 per cent, is generally still seen as ‘charity’ in Indonesia,” he <a style="color: #000080;" href="https://www.dealstreetasia.com/stories/exclusive-indonesia-vc-association-pushes-for-national-vc-fund-says-startups-need-1-5b-a-year-63855/" target="_blank" rel="noopener noreferrer">told</a> this portal earlier.
The association predicted that about Rp 200 trillion ($14.6 billion) in funding is <a style="color: #000080;" href="https://www.dealstreetasia.com/stories/get-ready-for-14-6b-pouring-into-indonesian-startups-says-amvesindo-43038/" target="_blank" rel="noopener noreferrer">expected</a> to be poured into the startup sector starting this year for the next foreseeable future.
Also Read:
<a style="color: #ff0000;" href="https://www.dealstreetasia.com/stories/exclusive-indonesia-vc-association-pushes-for-national-vc-fund-says-startups-need-1-5b-a-year-63855/" target="_blank" rel="noopener noreferrer">Indonesia: AMVESINDO pushes for national VC fund, says startups need $1.5b a year</a>
<a style="color: #ff0000;" href="https://www.dealstreetasia.com/stories/indonesia-set-up-new-scheme-financing-for-local-startup-support-by-local-vc-40886/" target="_blank" rel="noopener noreferrer">Indonesia to deploy part of SME credit scheme to fund local startups</a>
<a style="color: #ff0000;" href="https://www.dealstreetasia.com/stories/indonesia-to-use-uso-fund-for-startups-57591/" target="_blank" rel="noopener noreferrer">Indonesia to use USO fund for startups</a>
<a style="color: #ff0000;" href="https://www.dealstreetasia.com/stories/indonesia-dealbook-government-kadin-launch-sme-marketplace-traveloka-introduces-easy-reschedule-for-flight-changes-40424/" target="_blank" rel="noopener noreferrer">Indonesia Dealbook: Government, Kadin launch SME marketplace, Traveloka adds new feature</a>
<a style="color: #ff0000;" href="https://www.dealstreetasia.com/stories/indonesian-startups-allocated-76-m-micro-lending-37111/" target="_blank" rel="noopener noreferrer">Indonesia: Startups to get $76m in government’s micro-credit guarantee program</a>

Indonesia has nearly doubled its public spending on incubating tech-based businesses from Rp 190 billion to Rp 370 billion ($27.6 million).

Indonesia: Govt nearly doubles spending on tech startup incubation to $27.6m

Bring stories like this into your inbox every day.

Sign up for our newsletter - The Daily Brief

Indonesia: Govt nearly doubles spending on tech startup incubation to $27.6m

Start your deal-making journey now!

Bring stories like this into your inbox every day.

Sign up for our newsletter - The Daily Brief