Strengthening Data-Based Economy, Minister of Communication and Information Encourages Governance to Anticipate Misuse of Personal Data

In the State of the Nation Speech of the People's Consultatives Assembly's (MPR) Annual Session and the Joint Session of the House of Representatives (DPR) and DPD in the context of the 76th Anniversary of the Proclamation of Indonesian Independence, President Joko Widodo stated that he would continue to encourage the growth of the digital economy ecosystem to increase people's productivity.

The Minister of Communication and Information, Johnny G. Plate, emphasized that the Government guarantees the implementation and supervision of personal data protection to prevent misuse. It even encourages governance so that a data-based economy can grow and develop.

"Given that a data-driven economy is now developing in the world and data production is increasingly decentralized, strong governance is needed to anticipate the massive misuse of personal data," he said in the Indonesia Banking School Webinar, from Jakarta, Friday (20/08/ 2021).

The Minister of Communication and Information considers that data governance in the data economy era is important in order to ensure that data is not merely an object that needs to be protected or monitored. The governance includes the provision of unauthorized access, data confidentiality, appropriate use or no misuse, protection of personal data, benefits for data owners, and ethical standards.

Moreover, Minister Johnny stated that data is also a resource to increase the level of competition and performance of the Indonesian nation.

"Especially in this era, economic efficiency can be created to encourage adaptive growth to the innovations of the times driven by the Covid-19 pandemic. Data is not only seen as an object that needs to be protected and monitored, but also as a resource that becomes the compass for the performance of the Indonesian nation," he explained.

In his presentation, the Minister of Communication and Information explained that the data-based economy has five distinctive characteristics. First, the condition of information asymmetry due to data access gaps among ecosystem actors. Second, the adoption of machine learning as part of artificial intelligence innovation, increasing market concentration, the emergence of new forms of trade and exchange of value, as well as new systemic risks to the economy.

“With these various characteristics, data security is of course very important. By 2025, it is projected that 181 Zettabytes of data will be produced worldwide, of which 80% of the data will be in the hands of the private sector or corporate companies," he explained.

Minister Johnny stated that in the same year, 49% of the world's data will be in the public cloud environment and almost 30% of the world's data will be real time. In addition, the phenomenon of the merger of major digital economy players also poses challenges related to the dominance of data mastery that affects the climate of market competition.

"On the other hand, regulations in data acquisition practices also need to be continuously refined to prevent data retrieval activities that threaten the privacy of data owners," he explained.

The Minister of Communication and Information reminded that two aspects of data are divided into information goods and data goods in terms of production units in a data-based economy.

“Information goods are final goods that are ready to be consumed by considering all the contexts that consumers need. Meanwhile, data goods can be found in digital currency, which was born in the era of digital technology," he explained.

Meanwhile, in terms of utilization, data in a data-based economy can be grouped into two types, namely data in the form of public goods and data as a compass.

"Public goods data is used for commercial purposes and data as a compass can be used or utilized for the public interest, such as the preparation and evaluation of policies and public programs," said Minister Johnny.

Moreover, in order to realize an effective data policy, the Minister of Communication and Information emphasized the importance of harmonization of the five aspects of supporting the data-based economy.

“That is the standardization of big data value chains to create a balance of power over data mastery in the market. Second, encourage competition. Third, ensure that there are incentives for data collection and processing. Fourth, encourage investment in cybersecurity in order to create stability and fifth, prioritize individual privacy," he said.

The Minister of Communication and Information stated that in order to create a balance in all sectors, especially finance, the cooperation of all stakeholders is needed. According to him, harmonization of course requires cooperation between ministries and institutions including Bank Indonesia and the Financial Services Authority (OJK).

“(So that) financial services can be agile in adapting, sharp in transforming, and brave in competing on a fair playing field. So, strong cross-sectoral collaboration between all stakeholders is needed," he said.