A shortage of talent stymies Indonesia’s technology scene

Indonesian online retailer Bilna spent two years looking for a chief technology officer before it finally discovered Ridy Lie, who had returned home after eight years with Amazon in the United States.

Until Lie, the company had struggled to find someone who could “take us to the next level,” said Eka Himawan, group chief financial officer at the company, which was renamed Orami after a merger this year.

“He is the one who is guiding (the engineers) and telling them: this is how the things are done in Amazon and this is how we should do it,” Himawan said.

Even as internet giants like Alibaba and SoftBank are making major investments in startups heavily exposed to Indonesia, recruitment of talented executives is proving to be a huge drag on the country’s technology sector.

Indonesia is the most populous country in a region where 3.8 million internet users are coming online every month. A recent report by Google and Singaporean state fund Temasek estimated that Southeast Asia needed to attract investment worth US$40 billion to US$50 billion in sectors such as ecommerce over the next decade to potentially become a US$200 billion internet economy, with Indonesia poised to receive a big chunk.

But the tech talent needed to drive such growth is scarce, the result mainly of shortcomings in Indonesia’s education system, a lack of experience and the low salaries on offer compared with those available in the United States.

Highly skilled workers account for only about 10 percent of total employment in the archipelago of 250 million people, the lowest ratio of any major Southeast Asian nation, according to the World Economic Forum.

“I would say it definitely means things grow slower. If I compare a startup in Indonesia with startups in some other places, they will tend to be less on the cutting edge of technology, less efficient,” said Vinnie Lauria, a founding partner at Singapore-based Golden Gate Ventures.

Some investors are offshoring tech work to fill the talent gap as they seek to grow startups. So far, however, no private Indonesian tech firm has reached a valuation of more than US$1 billion, compared with more than 20 in China.

“The solution of last resort is to solve the problem out of the country,” Adrian Vanzyl, CEO of Thailand-based Ardent Capital, told Reuters in April.

Ardent has invested in Thai logistics firm aCommerce, which has engineers in Indonesia but leaves “a lot of the core platform development” to staff in Thailand, he said.

Another creative work-around is a fly-in-fly-out approach to get people with specialised knowledge to advise local startups on a temporary basis.

Source: China Post