JAKARTA, 4 June 2025 – A new study from IBM (NYSE: IBM) reveals that Indonesian businesses are showing strong readiness to adopt artificial intelligence (AI), with 85% reporting significant operational gains and 93% confident in their ability to deploy AI. However, ethical preparedness is lagging—only 45% of respondents say they understand how to use AI ethically, and just 24% report having clear AI governance processes in place.

The report, titled “Unlocking Indonesia’s Economic Potential for Future Prosperity,” offers a comprehensive look into the priorities and challenges of more than 500 senior business leaders across Indonesia, spanning various industries and both private and state-owned enterprises (SOEs). The study explores economic outlooks, growth strategies and key recommendations to accelerate sustainable development through AI.

Some key findings include:

• AI and digital transformation as growth drivers: 77% of Indonesian business leaders see AI and digital transformation as the country’s top growth opportunities.
• Sustainability in focus: 94% of respondents plan to boost investments in sustainability initiatives, with 89% already allocating more funding for green technologies in their 2025 budgets.
• Critical challenges remain: Infrastructure (84%), cybersecurity (55%), and a lack of digitally skilled talent (45%) remain top barriers to realizing Indonesia’s digital economy ambitions.

MSMEs: The engine of the economy

Medium and Small Enterprises (MSMEs) continue to play a critical role, contributing over 60% of Indonesia’s GDP and employing 97% of the workforce. Despite leading in digital investments, only 63% of small businesses report having a clear AI strategy—compared to 80% of medium-sized and 71% of large organizations. This signals a pressing need for targeted policy reforms to support MSMEs in their digital transformation journey.

“Indonesia today stands at the forefront of technological innovation and digital progress. IBM is proud to partner with businesses and policymakers to drive AI-led digital transformation at scale—accelerating Indonesia’s economic and societal growth. Building secure digital foundations, bridging the talent gap, and championing national framework for ethical AI through bold collaboration and infrastructure investment will be the key drivers for success," said Catherine Lian, General Manager and Technology Leader, IBM ASEAN.

SOEs: A two-speed digital economy

The report also highlights a widening gap between the private sector and SOEs. While SOEs are crucial to national infrastructure, 59% cite a lack of skilled workforce as their top digital challenge, followed by high operational costs (55%) and data security concerns (49%). This points to a slower pace of security investment, potentially putting national networks and supply chains at risk.

Closing the talent skill gap through public-private partnerships

While 83% of respondents are aware of existing government initiatives to improve workforce productivity, a vast majority—97%—are calling for deeper public-private partnerships, particularly in AI and digital skills development.

The role of leadership in driving innovation

Business leaders point to modern leadership traits such as adaptability and agility (71%), collaboration and team orientation (63%), and a strong focus on technological innovation (78%) as essential to succeeding in a fast-evolving digital landscape.

"The time for experimentation is over. We believe now is the time to begin the real transformation for this new era of AI. Businesses and policymakers alike have a unique opportunity to shape AI-driven growth at scale. IBM is committed to working closely with all stakeholders and contributing to the development of a robust AI ecosystem in Indonesia,” concluded Catherine Lian.

Download the full report here.

Methodology

The following whitepaper outlines key findings based on 502 interviews with senior business leaders (Director level and above) based in Indonesia, representing a variety of industries and organization sizes. Some further select insights have also been added, based on a literature review of recent relevant studies.

About IBM:

IBM is a leading provider of global hybrid cloud and AI, and consulting expertise. We help clients in more than 175 countries capitalize on insights from their data, streamline business processes, reduce costs, and gain the competitive edge in their industries. Thousands of governments and corporate entities in critical infrastructure areas such as financial services, telecommunications and healthcare rely on IBM's hybrid cloud platform and Red Hat OpenShift to affect their digital transformations quickly, efficiently, and securely. IBM's breakthrough innovations in AI, quantum computing, industry-specific cloud solutions and consulting deliver open and flexible options to our clients. All of this is backed by IBM's long-standing commitment to trust, transparency, responsibility, inclusivity, and service.

Media Contact:

Vishnukari Mahmud
IBM Media Relations, Indonesia
vishnukari.mahmud@ibm.com