Indonesia in need of Cyber Security Technologies

The quick count results of the 2019 Indonesia general elections, held on April 17, showed the incumbent President Joko Widodo as the winner with around 55 percent of the votes. The challenger, former Army General Prabowo Subianto immediately contested the result, saying that - based on the internal counting of his own camp - he won the presidency with over 60 percent of the votes.

The so-called real count would not come in for another 30 days after the voting was held, after which the Indonesian General Election Commission (KPU) would announce the winner. In effort to uphold the legitimacy of the election, the KPU plans to scan all of the vote tally forms, called C-1, from more than 800,000 voting booths across the country and have it compiled digitally.

The level of KPU’s cyber security has never been more important in deciding a nation’s fate as, following the election, rumors have been spreading about KPU servers being hacked and C-1 forms being forged into results that benefits either camp via social media. The KPU denies the rumors, saying that the real count is open to monitoring by individuals, as well as national and international observers.

Nevertheless, information and misinformation continues to spread among supporters of both camps. It is not only the KPU’s cyber security that is causing political uncertainty as cyber security on the individual level is also a concern in ensuring that the 2019 Indonesian election are being held in a free and fair manner.

The situation above reflects Indonesia’s fragility when it comes to cyber security. The Asian Economic Crisis in 1998 has led the country to fall behind in a number of crucial sectors. In regards to digitalization, whereas countries such as India have already embraced electronic voting machines, Indonesia is still using paper ballots. The country’s archipelagic nature exacerbates the condition. The nation is far from getting its more under-developed regions interconnected digitally.

But digitalization is a reality and Indonesia is already putting in the effort to have digital interconnectivity along with the rest of the world. Based on the 2018 UN e-government survey, Indonesia is already grouped among countries with a middle-to-high e-government development index, such as Monaco and New Zealand. Concurrently, according to the Global Cybersecurity Index - which is published by the Geneva-based International Telecommunications Union, a specialized agency of the UN - Indonesia rank 41st in terms of its commitment to cyber security in 2018, up from 69 in 2017.

Politicking aside, Indonesia’s commitment to cyber security is also tightly related to its rapid growth as a digital marketplace. Last year, management consulting firm McKinsey predicted that the Indonesian e-commerce market would rise nearly eight-fold between 2017-2022, from US$8 billion to a range of $55-65 billion. According to Statista, the number of online shoppers would grow from 31.6 million in 2018 to 43.9 million in 2022. Indonesia is also home to three unicorn companies and one decacorn company - unicorn being the designation for startups valued at over $1 billion, while decacorn is for startups valued at over $10 billion.

This leaves plenty of lucrative opportunities for German companies providing cyber security. According to UK-based Sophos, a market leader in cyber security, Indonesia is the fastest growing market for cyber security in the world, with the company recording a growth of 48% each year. Sophos has over 200 Indonesian partners with which it is providing cybersecurity solution.

The main challenges for cyber security companies in Indonesia are infrastructure and human resources. While digitalization is rapidly being adopted in the main islands - especially in Java - the rest of the country are not yet all that connected. Infrastructure development for connectivity is a central agenda for the government, but it is something that will take years to be resolved as many of these outlying regions are still lacking even in electrification. The near-term concern that cyber security companies can tackle is thus human resources. It has been estimated that Indonesia needs around 1,000 cyber security experts for both the government and private sector to keep up with the rest of the world. A strong training program for local IT experts can provide a leg-up for German companies looking into entering the Indonesian cyber security market.

The fact is that cyber security is necessity in today’s digitalized world. Indonesia was hit by a record 12.9 million cyber-attacks last year, according to the national Cyber Body and National Encryption Agency. The same body estimated that such attacks would grow by an average of 15% every year. Cyber-attacks cause direct and indirect losses of up to $6.7 million for large companies and $33,500 for mid-sized companies in Indonesia, according to a study released by Frost and Sullivan last year.

On the topic of Civil Security Technologies and Services that takes place under the framework of the export initiative cyber security technology, EKONID is holding a business delegation trip from September 1-5, 2019 that includes a business forum with up to 100 expected participants from Germany and Indonesia from the industry sectors of civil security technology and services, building security and IT security as well as one-to-one discussions with potential business partners. Partners of this delegation are the Federal Ministry for Economic Affairs and Energy (BMWi), the Bundesverband der Sicherheitswirtschaft (BDSW), the Bundesverband Sicherheitstechnik e. V. (BHE), the IT Security Association Germany (TeleTrust) and econAN international GmbH.