Indonesia’s Deputy Minister of Industry, Faisol Riza, emphasized Batam, Riau Islands, as a strategic location for developing the country’s artificial intelligence (AI) industry.

Speaking at a Focused Group Discussion (FGD) on strengthening the electronics industry for AI development on July 10, 2025, Faisol highlighted Batam’s existing 19 industrial zones as a solid foundation for AI-driven industries.

Several companies in these zones are already involved in electronics technologies essential for AI advancement.

Industrial Readiness and Key Corporate Visits

Faisol recently toured several companies in Batam to assess the readiness of industrial zones and companies in supporting high-tech industry bases.

“Yesterday, we visited telematics sector companies, suppliers for global gadget components, and the planned factory site of an Apple supply chain partner producing AirTag. This proves Batam’s significant potential,” he said.

This hands-on approach illustrates Batam’s evolving role in the global tech supply chain.

Telecommunications and Digital Infrastructure Advantages

Nezar Patria, Deputy Minister of Communication and Digital Affairs, pointed out Batam’s longstanding role at the forefront of the telecommunications device and digital services industry.

He underscored Batam’s strategic location and infrastructure as critical factors that can position the city as a flagship center for national AI development.

“Batam could become the nation’s flagship in producing telecommunications devices and services. It is essential to prepare AI industry infrastructure here,” Nezar remarked.

Industry Vertical Strengthening and Data Privacy Concerns

Faizal Rochmad Djoemadi, IT Digital Director of PT Telkom Indonesia, stressed the importance of strengthening vertical industries, particularly manufacturing, within Batam’s AI ecosystem.

He cautioned about data privacy risks but urged a focus on the positive potential of AI industry development.

His insights reflect the need for balancing innovation with security safeguards in AI growth.

Collaborative Efforts and National AI Vision

The FGD marked a crucial step in aligning perspectives across government, industry players, and state-owned enterprises (BUMN) to establish Batam as a premier AI industry hub.

According to Kearney’s analysis, AI utilization in Indonesia is forecasted to contribute 12% to GDP by 2030, approximately USD 366 billion, making it the largest nominal economic contribution in the ASEAN region.

This underscores Indonesia’s vast digital economy potential, supported by a broad market and strong industrial base.

Infrastructure, Talent, and Regulatory Needs

Realizing Batam’s AI potential requires accelerating digital infrastructure development, improving human resource quality, and enacting supportive regulations for the national AI ecosystem.

These steps are vital for maximizing Indonesia’s AI-driven economic growth and maintaining a competitive advantage in the region.

PHOTO: FREEPIK

This article was created with AI assistance.