A report from the Digital Evolution Index 2026 states that Indonesia has a very large digital market but has not yet fully mastered the technology.
Indonesia is considered to excel in the number of internet users, social media activity, digital transactions, and e-commerce growth, which has continued to rise in recent years.
The number of internet users in Indonesia by 2026 is projected to reach approximately 230 million people, making it one of the largest digital markets in the world.
Rapid growth in the digital economy is also evident in the increasing use of digital services in people’s daily lives, ranging from online shopping to app-based financial services.
Nevertheless, the report notes that Indonesia remains more dominant as a digital consumer market than as a technology developer.
Reliance on foreign technology remains high, including in cloud services, artificial intelligence (AI), digital platforms, and technology hardware.
Consequently, Indonesia’s position is not yet on par with countries that possess stronger innovation capabilities and technological mastery.
The report also highlights several key challenges Indonesia still faces in developing its digital economy.
Some of these include uneven digital infrastructure quality, a shortage of tech talent, weak cybersecurity, and limited local research and innovation capabilities.
Global AI advancements are also said to have the potential to widen the technology gap if Indonesia does not accelerate investment and the development of its domestic digital industry.
Despite facing various challenges, Indonesia is still considered to have significant potential to develop into a more self-reliant technological power in the future.
This potential is supported by a large digital population, rapid growth in the digital economy, and opportunities for talent development, local innovation, regulation, and national technology infrastructure.