March 12, 2018

Government of Indonesia Integrates Big Data into Economic Management

Written by Pulse Lab Jakarta and FHI 360

The Stability Innovation Atlas team, led by FHI 360 and funded by the Rockefeller Foundation, will release their finished product in Spring 2018. The complete Atlas will feature economic stability-enhancing innovations that empower the world’s poor and vulnerable people in managing and investing with confidence in their future. We will be profiling several innovators and innovations that were identified during the research and crowd-sourcing process over the coming weeks and months.

Policy analysts within Bappenas participating in one of Pulse Lab Jakarta's data innovation clinics.

Policy analysts within Bappenas participating in one of Pulse Lab Jakarta’s data innovation clinics.

Indonesia today boasts one of the fastest growing economies worldwide – the largest in Southeast Asia – and an ambitious anti-poverty strategy designed to ensure that the country’s rapid growth is socially inclusive. The Government of Indonesia (GOI), keeping pace with the data revolution that is transforming commerce and society, is proactively working to unlock this potential to reshape and boost its economic development efforts.

Sound macroeconomic management is a pillar of economic stability for individuals, households, firms, and communities worldwide. With support from The Rockefeller Foundation, FHI 360 is partnering with innovative organizations worldwide to identify the most important recent innovations that support key dimensions of economic stability in the service of building more inclusive economies and to tell their stories to the global development audience. One such partner is Pulse Lab Jakarta (PLJ), a unique joint initiative of the United Nations and the GOI that is working to support innovation in the use of big data and human centered design for inclusive development in Indonesia and regionally, with support from the Government of Australia (DFAT).

Recognizing that conventional datasets are no longer adequate to maximize government responsiveness, the GOI efforts are aimed at paving the way for it to become a more proactive and anticipatory government, stimulated by more data-driven economic development. Indonesia’s Ministry of National Development Planning (BAPPENAS) in particular has seized the opportunity to use near real-time data to monitor economic development and keep the country’s inclusive growth on track. BAPPENAS, with development planning at the core of its mandate, was among the first institutions within the government to recognize that conventional datasets are no longer sufficient to inform rapid policy response to economic volatility. Pulse Lab Jakarta (PLJ) was established as a data innovation lab in part to test the feasibility of using digital data signals to inform the country’s economic strategy and policy decisions, with a view to providing early warnings of economic shocks that could derail inclusive development.

Since the Lab’s inception in 2013, directorates from BAPPENAS have been working alongside PLJ’s research team to experiment with ways to harness new data from social media, e-commerce, shipping, and other emerging sources, and to overlay these with conventional economic data to create a more complete picture of the country’s inclusive growth performance. In a series of collaborative projects, PLJ has provided the data processing and analytical capabilities, while domain experts within BAPPENAS designed and completed substantive analysis related to Indonesia’s development goals. This approach has enabled improved knowledge exchange and information flow, building on complementary skill sets and straightforward discussions on the feasibility of each project. Some of the recent projects have included:

  • Monitoring food price dynamics using Twitter data, especially for priority commodities such as rice and beef, to provide early warning of price spikes that can destabilize consumption among poorer Indonesians.
  • Using e-commerce data as indicators for domestic economy.
  • Monitoring shipping arrivals and departures and e-commerce data as proxies for the conditions of the domestic economy and as an early-warning system for changes in trade patterns that impact Indonesian SMEs.
  • Better understanding the relationship between inflation rates and public sentiment of the increase in prices of certain commodities using social media data.
  • Analyzing global perceptions of the “Wonderful Indonesia” tourism brand and Indonesia’s flagship destinations based on information publicly shared on social networking platforms.

As customary in experimenting with new approaches, these projects are not designed to be finished products, but rather to act as an opener for further iterations. For instance, the project using e-commerce data was focused on investigating housing price data across provinces to see whether any insights could be gleaned from the comparison. While the team managed to process the data and show the price dynamics, the actual analysis to correlate this to events, shocks or stresses, or other economic indicators was not performed immediately.

These experimental approaches are a starting point for the incorporation of innovative big data solutions into policy. Initial analysis of e-commerce data to understand housing prices sparked new ideas for utilizing the same data to prevent the Government’s SDG1-aligned poverty reduction initiatives from being derailed by shocks. Among a batch of 30 new collaborative project proposals from BAPPENAS for 2018, several include the use of e-commerce data to answer various macroeconomics research questions such as better mapping inter-regional trade intensity and regional trading patterns. Innovations from the GOI and PLJ and more than fifty other organizations will be featured in an Atlas of Innovation for Economic Stability in spring, 2018.

This feature is being published simultaneously at FHI 360’s Crowd 360 Stability Innovation Hub and on Pulse Lab Jakarta’s Medium page.

FHI 360 is a nonprofit human development organization dedicated to improving lives in lasting ways by advancing integrated, locally driven solutions. Its staff includes experts in health, education, nutrition, environment, economic development, civil society, gender, youth, research, technology, communication and social marketing. FHI 360 serves more than 60 countries and all U.S. states and territories. 

Pulse Lab Jakarta is a joint data initiative of the Government of Indonesia and the United Nations that is working to close information gaps in the development and humanitarian sectors through the adoption of big data, real-time analytics and artificial intelligence. The Lab wants digital data sources and artificial intelligence to be harnessed responsibly as a public good. As part of the Global Pulse network, its mission is to accelerate the discovery and adoption of data innovation for sustainable development and humanitarian action.