With urban growth averaging 4.4% annually, 68% of Indonesia’s population will live in cities over the coming ten years. For every 1% growth in urban population, Indonesia is expected to gain a 4% growth in GDP. This growth, however, pales in contrast to other ASEAN countries.

This difference in growth rate is linked to the congestion, pollution, and disaster risks resulting from insufficient infrastructure investment in Indonesia. The country’s economy grew by an average of 5.8% in the mid to late 2000s, but infrastructure stock grew by only 3%.

The Indonesian government has started to reverse this trend of underinvestment by adopting smart technologies in a bid to evolve its cities. A prime example is Jakarta, Indonesia’s capital, was originally designed to handle 800,000 people when it was founded. Jakarta is now home to up to 12 million people during a typical work week.

There is a focus on improving public safety in Jakarta, as the city is subject to growing concerns of complex security threats, such as terrorist attacks. The government is looking to strengthen security in urban areas and large-scale facilities such as airports, seaports, schools and other public spaces.

To meet these needs, systems that use security camera footages to detect suspicious individuals have gradually become more commonplace. However, it is difficult to identify a person among people with different appearances from a large number of data.

To overcome this, Hitachi has created an Intelligent Video Analysis System using image-analysis technology with AI. It enables real-time people-detection and tracking using a combination of over 100 features of the person of interest.

In addition, Hitachi is augmenting elevator and escalator solutions with security and AI enhancements. These systems are instrumental to urban areas and help to facilitate human traffic flow in heavily populated cities.

Find out more about Hitachi's development of image-analysis technology with AI

High rates of urbanisation growth also place a heavy toll on Indonesia’s energy demands. Indonesia, the region’s largest energy consumer, is expected to face an energy crisis by 2020-2030 due to its inability to generate enough clean energy to meet the electricity needs of its growing urban population and industries.

Energy consumption in Indonesia has spiked rapidly since the early 2000s. Driven by a growing economy, increasing middle-income population, rising middle class, and spread of urbanisation, energy consumption grows in average 4.2% per year over the last 15 years.

Fossil fuels in Indonesia are likely to run out in another 10-13 years. Thankfully, the archipelago is blessed with abundant sources of sustainable energy. The former Minister of Energy and Mineral Resources, Sudirman Said, claimed Indonesia’s potential for renewable energy is enormous, amounting to 112 GW of solar energy, 28.8 MW of geothermal energy, 75 GW of hydro energy, 950 MW of wind energy, and 60 GW of biofuel and biomass energy.

In 2015, President Joko Widodo vowed in front of world leaders to reach a target of 23% renewable energy by 2025. The target is manifested in the form of government regulation and a programme of building solar power generators to produce 5,000 MW by 2019.

Established in 2008, initially as a solar panel distributor, Sky Energy teamed up with Hitachi High- Technologies Indonesia in 2009 to build manufacturing facilities and started producing solar panels in 2012. In 2016, it claimed to be the biggest solar panel producer in the country with a production capacity of 100 MW, as well as having 50 MW production capacity for solar cells.

On top of that, Hitachi is collaborating with Prasetiya Mulya University for education and research activities in engineering and energy sciences. This is a continuation of Hitachi’s efforts in supporting the Indonesian energy sector since 1995, beginning our early investments in High Voltage Switchgear Fabrication in Cikarang.

Outside of the major cities in Indonesia lies a large population of Indonesians who are excluded from the financial services system. To them, cash is the preferred transaction mode and they rely heavily on informal and non-full service institutions. Adults, especially those living below the poverty line and in rural areas, save in small amounts at home and typically access loans in cash from friends and relatives.

Without access to formal financial services, the underbanked population will not able to save as much as they should. They are also denied of essential services, such as health insurance or housing loans. In 2014, only 36% of the Indonesian population owned a bank account. 33% of the unbanked population cited distance as a key reason for not having an account.

Financial institutions are expanding their physical networks into underserved areas and are seeking to maximise efficiency in their branches through strategies such as self-service automation. ATM deployment could prove vital in Indoneisa, with more than 100,000 machines in the country in 2016, making it the largest ATM market in Southeast Asia.

To help, Hitachi has supplied ATMs and related services in Indonesia through its collaboration with local distributors since 2003. It shipped a large volume of cash recycling ATMs to the leading commercial bank in 2011 and assisted with the nation’s first cash recycling operations in 2013.

A 2018 report reveals that around half of the adults in Indonesia now own a bank account, reflecting a turning point in the country’s journey to boost financial inclusion. Bank Indonesia and the central government of Indonesia target to raise the financial inclusion figure to 75% by 2019.

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