- Online health care and medtech AI have risen in prominence in the country as the government seeks more equal access to health care
- Indonesia’s private health care insurance market remains small and is ripe for further development
Indonesia is pushing the adoption of artificial intelligence (AI) and a big part of this effort is focused on developing a vibrant medtech ecosystem to help solve the country’s pressing health care issues.
In early 2020, Indonesia announced a national-level AI strategy, initiated by its Agency for the Assessment and Application of Technology (BPPT).
With support from the National Research and Innovation Agency (BRIN), this strategy placed significant emphasis on developing AI for public services.
Online health care and medtech AI have risen in prominence in the country as the government seeks more equal access to medicines and treatment for its citizens, spread across a vast land mass. The urgency has been heightened by the impact from Covid-19 – with Indonesia recently overtaking the Philippines as the hardest-hit country in Southeast Asia.
Thankfully, the archipelago nation of Indonesia is well-poised for AI start-up growth, helped by its young population, high mobile penetration rate, and a renewed government focus on technology and human capital development.
Over 40 per cent of the country’s population is under the age of 24, compared with a rate of just over 31 per cent in the US. The mobile penetration rate is around 70 per cent and nearly 60 per cent of all Indonesians are present on social media, making it one of the biggest, active digital populations in the world.
Indonesia ranked as the second-largest venture capital market in Southeast Asia in 2019, behind Singapore and with Malaysia third, according to a report by Deal Street Asia. Meanwhile, President Widodo’s government in 2018 allocated over US$30.6 billion towards education efforts, with Go-jek co-founder Nadiem Makarim now spearheading the nation’s AI efforts as Education Minister. AI companies such as Nodeflux, KoinWorks, Julo, and Kata.ai have already made progress in establishing links between government, the private sector and citizens in the country in areas such as AI computing and fintech – but services such as education and health care are now in focus. Indonesia’s private health care insurance market remains small and is ripe for further development, with a penetration rate of less than 2 per cent. One example of a company seeking to address health care is Alodokter, founded by Suci Arumsari and Nathaniel Faibis, which raised US$33 million in a Sequis Life-led Series C funding in late 2019. With over 20 million monthly active users, Alodokter is an end-to-end digital solution for telemedicine, medical administration, and health insurance services. Insurance tech start-ups PasarPolis and Qoala raised US$54 million in a Series B funding round and US$13.5 million in a Series A round in 2020 respectively. PasarPolis founder Cleosent Randing has established partnerships with firms such as Go-jek and Tokopedia and wants to expand to Vietnam and Thailand in coming months. Meanwhile, Indonesia’s fast-growing manufacturing sector also presents opportunities for medtech innovation as well as research and development.The government wants to increase the percentage of manufacturing as a part of total GDP, and its Making Indonesia 4.0 Roadmap policy blueprint is a key driver.In health care, Indonesian manufacturers currently only meet 10 per cent of local demand, with the vast majority of medical technology imported from other countries. That is why the government is focused on nurturing a vibrant medtech ecosystem to try and improve domestic capacity and help solve Indonesia’s pressing health care problems. A range of solutions are being looked at – from mobile applications that enable medical care at a distance, to growth in private health care insurance, to developing the local manufacture of tech equipment. A key challenge for Indonesia will be to continue to attract international capital and AI talent, while also encouraging its domestic AI start-ups to expand overseas.That is why the country needs more successful domestic players like health-tech platform Halodoc, TeleCTG – which is focused on developing portable devices for midwives and doctors that help to detect fetal heartrate abnormalities – and pharmacy-specific K24KLik, to set the stage for further growth.
Source: Digital Insurance
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