IPMI Graduation, Jakarta

Remarks by Ambassador Blake at the IPMI Graduation, Jakarta (IPMI)

Remarks by Ambassador Blake at the IPMI Graduation, Jakarta

Thank you for that kind introduction.  I would also like to say thank you to my friend Jimmy Gani, Executive Director and CEO of this institution, and Dean of the Business School, Professor Roy Sembel for the invitation to speak here today.

To the graduates — Congratulations to each and every one of you! Semoga Sukses!

Congrats as well to the parents who made many sacrifices to get all of you here and who have supported you on your educational journey.

To all of the graduates, people say the world you are inheriting has never been more divided and complicated, particularly given challenges such as ISIL, the effects of climate change, and growing inequality in many countries, including the U.S. and Indonesia.  All of that is true.

But it is also true that doomsayers like Malthus have sounded their dire warnings for centuries.  But they failed to predict human ingenuity and huge technological changes that came in response to these challenges, like the Green Revolution that dramatically increased agricultural yields, and more recently the spread of the internet and a range of devices such as smart phones that have generated massive new industries and wealth.

And you graduates are now the next generation to find new and innovative ways to tackle the challenges of our time.  You are entering the workforce at a very important time for Indonesia as its global influence continues to grow.

We in the United States have recognized Indonesia’s importance and have deepened our ties across the board.  Relations between the U.S. and Indonesia reached a new peak with the recent successful visit of President Jokowi to Washington in late October to meet with President Obama.

Our two Presidents elevated our relations to a Strategic Partnership; announced announcement of over $20 billion in new U.S. investment and business deals; and enhanced cooperation on strategic regional and global challenges, including to further develop our important trade relationship.

We also welcomed President Jokowi’s announcement in Washington DC of Indonesia’s intent to join the Trans-Pacific Partnership, an important decision that I will return to shortly.

President Jokowi has set out an ambitious agenda to increase Indonesia’s economic growth and to reduce poverty.  To reach his targets, he has rightly pointed out that Indonesia can no longer rely simply on exporting commodities and consumer spending to drive growth.

Today, I would like to discuss with you, the future business leaders of Indonesia, some important trends and aspects of Indonesia’s growth strategy that have the promise to shape a new dynamism to Indonesia’s economy and future.

First, I’d like to talk about the Digital Economy.  We are living in a time of tremendous change, with technology playing an increasingly important part of our daily lives.   The internet has made the world smaller.  The Internet and technology innovation have allowed cities to become smart, governments to become more efficient, and societies to become more connected.

America’s digital companies are having a profound effect in America and around the world.  A few examples:

  • the largest hotel company in the world as measured by room bookings is Airbnb.
  • Amazon took over the title of the largest retailer from Walmart in July of this year.  The world’s largest taxi company – Uber- owns no vehicles.
  • And the world’s most popular media owner Facebook is a social media company.  All of these companies are changing the face of business not only in the US, but Indonesia and most other parts of the world.

Indeed, Indonesia has seen an explosion in the use of internet technology, with more than 85 million Indonesians online already.  There is no one better to talk with about innovation than young people.

Sixty percent of Indonesia’s population is under the age of 35.  So while much of the industrialized world faces declining birth rates, your best years lie ahead.  So there are endless possibilities for new products and new services that Indonesians can invent, produce, and market to the world.

President Jokowi, and the entire Indonesian government, has recognized the importance of digital development to Indonesia’s future.  Under the president’s Digital Indonesia 2020 vision, the government is working to support innovation and technology development to unleash Indonesia’s digital potential.  Some of the goals the government is pursuing include:

  • Expanding Broadband Access – At less than 30%, Indonesia’s internet penetration lags behind its regional neighbors like Malaysia and Vietnam.  Indonesia’s national broadband plan seeks to leverage government funding and private sector investment to expand internet access throughout the country, allowing more Indonesians to get connected, and allowing the government to utilize technology to improve service delivery, including health care, education and other e-government initiatives.
  • Growing the Digital Economy – An inter-ministerial task force is finalizing an e-commerce policy roadmap to help promote and support digital economy development, with a goal of increasing the sector ten-fold to $130 billion, and support the creation of 1,000 new startups, by 2020.  ComInfo, the new Creative Economy Agency, the Ministry of Education, and others will all work together to create an educational and regulatory environment conducive to digital economy growth.

These are ambitious, but achievable goals.  And they are goals that the United States government and the U.S. business community here in Indonesia share with Indonesia.

On expanding internet access, the United States government recently announced a new “Global Connect” Initiative that aims to bring 1.5 billion additional people around the world online by 2020.

  • To do so, we will work with governments, development agencies, non-governmental organizations, academic institutions like IPMI, and the private sector to mainstream the view that Internet connectivity is as fundamental to economic development as roads, electricity, and other infrastructure.
  • And we will work with like-minded countries, including Indonesia, to ensure that we all prioritize connectivity as a key part of our national development strategies.

But governments can only do so much.  In the United States, the government has created a policy environment where technology innovation can thrive, and then has gotten out of the way of the innovators who can make it happen.

In October, Ministers Lembong and Rudiantara, learned firsthand that U.S. companies and investors are paying attention to and increasingly interested in supporting Indonesia’s digital development.  The United States tech community has much to offer Indonesia as it pursues its Digital Indonesia 2020 goals.

During the visit, Google signed agreements with Telkomsel, Indosat, and XL Axiata to begin testing its new Google Loon technology here in Indonesia.  Have you heard about this? Google has developed the technology to use large balloons flying high in the atmosphere to provide internet connectivity to rural and underserved areas.

Like a cellular base station in the sky, this technology can help Indonesia expand internet access in support of its national broadband plan goals, and represents a tremendous partnership between U.S. and Indonesian companies for the benefit of Indonesia’s people.

To support digital education in Indonesia, Microsoft announced that it would make available its Office 365 suite of programs to all of Indonesia’s 49 million K through 12th grade students.  As Indonesia expands broadband access, more and more students will be able to take advantage of this program to develop their computer skills.

But it’s not just big companies like Google, Apple, Facebook, and others that can play an important role in Indonesia’s digital development.  Smaller U.S. tech players, including investors that focus on early-stage investment in startups, can also play a critical role in helping Indonesia achieve its digital economy goals.

Investors that focus on early stage investment represent so-called “smart-money,” as the investment also brings mentorship, connections around the world, and other much-needed intangibles that will help Indonesian startups bring their ideas to market, scale their businesses, and join the growing global digital economy.

For that reason, we all should welcome and celebrate any capital investment in the Indonesian tech sector, of any size, from any place, as it represents a vote of confidence in Indonesia’s digital future, and will help guide the success of some of those 1,000 startups the government aims to support.

While the government is contemplating opening up some parts of the e-commerce sector to foreign investment, we will continue to encourage BKPM to amend the negative investment list to allow foreign investment in e-commerce at all stages of a company’s development.  We should provide Indonesia’s tech startups all the tools they need to succeed, and more sources of capital investment are a critical tool in that toolbox.

Indonesia’s digital potential is enormous.  With young people like you leading the way, Indonesia can become a leader in e-commerce and digital development, and can transform from a resource-based economy to a knowledge- and innovation-based economy.  And many young Indonesians just like you are already leading the way, thinking outside the box to solve common problems for people here and around the world.

When William Tanuwidjaya founded Tokopedia to provide a platform for Indonesians to buy and sell goods online, he probably didn’t expect that it would become Indonesia’s first billion dollar tech company.  After receiving a $100 million investment from Japan’s Softbank and U.S. firm Sequoia Capital in 2014, Tokopedia is well on its way to becoming Indonesia’s first ‘Unicorn’.

Smaller Indonesian companies are making a big splash in the digital and app world as well.

  • Infinite Sky, one of the top 10 most downloaded arcade games in the world, was created right here in Jakarta by a company called Touchten.
  • Picmix, a photo sharing app created in Indonesia was downloaded by more than 20 million users worldwide in less than two years.

A second major development that has the promise to transform your world is President Jokowi’s announcement that Indonesia intends to join TPP.  This is great news for Indonesia and I commend him for taking this ambitious step in a long journey towards boosting economic growth.  TPP is not about closing doors to other countries, but about multiplying the positive benefits of trade and Indonesia would stand to benefit from joining TPP.

As Minister Lembong has said, Indonesia can compete with others in the region, attracting investment and increasing trade.  But if it stays on the sidelines, it risks being left behind while others reap the benefits of greater access to global markets.

In addition to increasing Indonesia’s exports to TPP member countries, TPP will allow Indonesian businesses to participate more fully in global supply and value chains and integrate into the regional economy.

Indonesian consumers will benefit from a more diverse selection of low-price, high-quality products, and national manufacturers using raw materials or components imported from TPP member countries will see improved price competitiveness.

TPP will also spur Indonesia to increase its national economic competitiveness through tackling structural reforms, increasing productivity, improving its use of technology and enhancing its environment for innovation.

Let me mention one final benefit.  The TPP agreement will challenge Indonesia to improve its labor, environment and service sectors.  It will encourage Indonesia in its efforts to prevent corruption and maintain good governance, to simplify its rules, and strengthen innovation and IPR protection.

None of this will be easy, and it will take time.  President Jokowi’s decision to join is a very wise one, and one that could be transformative for Indonesia.

Let me now turn to another sector that will be critical to Indonesia’s future competitiveness:  education.  Education is the foundation that can allow Indonesia to compete in a globalized market.  The future Indonesian workforce must be ready and able to think innovatively and creatively and critically.  Not everyone is as fortunate to go to a school like IPMI.

The World Bank estimates that Indonesian high school graduates score 2-3 grade levels behind OECD graduates.  Currently some 4 million Indonesian students study domestically at more than 3,800 institutions of higher education in Indonesia, with World Bank estimating that in 2025 there will be some 9 million Indonesians at the university level.

So higher education capacity must be expanded to meet that need.  Study abroad is a great way to ensure Indonesian students can access the finest higher education opportunities,  But today, only some 40,000 Indonesians pursue higher education abroad.  If Indonesia is to reach its full potential, it must not only develop its own higher education sector, but also internationalize.

I’d like to mention briefly some of the ways in which we work together to internationalize education.  The US Agency for International Development works to strengthen the capacity of higher education institutions in Indonesia through its Higher Education Leadership and Management Project.

In partnership with the Indonesian government, this program supports the provision of higher quality education services that are more relevant to the country’s economic and social growth.  By providing technical assistance in support of key reforms, this program brings best practices to the existing higher education systems.

In addition, USAID’s university partnership programs have developed more than two dozen long-term partnerships between U.S. and Indonesian universities.

  • These partnerships have strengthened Indonesian higher education institutions by exposing Indonesian faculty and students to the latest thinking and research in a variety of fields related to science and technology and have helped many Indonesian faculty members and graduate students to broaden and deepen their research skills.

We also are working hard to help young Indonesians learn English.  As the language of ASEAN and the language of international business, English language skills provide the most fundamental, most basic tool of communication in the globalized world.

English language learning is first tool students need to access both international education and to elevate their own qualifications.  It’s what allows me to speak with you today with ease.  The Embassy reaches hundreds of students through our English programs, but even more importantly than providing direct services, our Regional English Language Office works intensively to develop the skills of Indonesian English teachers, who in turn reach hundreds of thousands of English students.

We work together to internationalize education through exchanges and collaboration.  Indonesians can get the skills and knowledge they need to compete by studying in the United States.

Last year, nearly 8,200 Indonesians studied in the U.S. That is welcome, but small for a country of Indonesia’s size.  For those of you just completing your Bachelor’s degree, I’d like to encourage you to get a couple years of practical experience, and then apply to an MBA school in the United States.

As your CEO can personally attest to, we offer the best quality, value, and diversity in the world.  I’m personally inviting you right now to begin you journey to studying in the United States!

In conclusion, I know it is customary for commencement speakers to give a little bit of advice – so here are a few parting thoughts from me:

First, rather than join group thinking of how problems are intractable, think how you can use your education and modern technology to solve problems.  Embrace technology to expand traditional ways of doing business and solving social problems.  Be a force for change.

Secondly, don’t be afraid to fail.  In many cultures, it is considered shameful or dishonorable to fail. Not in America.  Some of our greatest innovators failed a lot. For instance, Thomas Edison perfected the light bulb after 10,000 attempts.

Next, always act with integrity and honesty.  I tell my young diplomats that as they consider courses of action to solve a problem, they should ask themselves if the action they are considering would pass what I call the New York Times test – could you explain it with pride to a reporter who learned about it?  If the answer is no, then drop the idea.

Fourth, be positive.  One of my old bosses was former Secretary of State Colin Powell. He used to always remind us that optimism is a force multiplier.  The world has too many people who are prepared to tell you why things can’t be done – you will do well by showing why things can get done.  Every problem has a solution, and the leaders are those who go out and find them.

This brings me to my final piece of advice, as you progress in life, most of you will achieve success, status, prosperity and security.  Those are all good but insufficient, because you must also find ways to give back and help those not as fortunate as you.  It isn’t just enough to build a resume.  Redefine success to include not only professional accomplishments, but also the content of your character.

Class of 2015:  We believe in you.  We believe in the promise of what you can do in our open, thriving, democratic countries.  We look to you to serve as bridges of understanding and collaboration between our two countries.  We are now laying the groundwork for the future.  It’s not easy.  It’s hard work.  But our work will bring our two countries closer together and help our countries become more prosperous, more sustainable, and more democratic.  Go forth, stretch yourselves and never stop learning, be positive sources of change, and serve.