Finding the right AI balance

Indonesia's plan to harness artificial intelligence for its economy highlights a key challenge in the country's digital transformation: how to balance efficiency gains with human oversight.

Indonesia is one of the 29 countries that signed the agreement last week establishing the World Artificial Intelligence Cooperation Organization. The Shanghai-based organization aims to promote international cooperation and global governance in AI, ensure the sound and orderly development of AI in a beneficial, safe and equitable direction, and bring benefits to all humanity.

Indonesian Coordinating Minister for Economic Affairs Airlangga Hartarto, one of the signatories to the agreement, said Indonesia needs to be directly involved in international cooperation and global AI governance, according to a report by the Jakarta-based Antara news agency.

Industry executives, however, urged caution in using AI in reshaping daily economic life in the world's fourth most populous nation.

For Adi Haryadi, an Indonesian banker and educator, generative AI and agentic AI are becoming more important and should be studied to see how they can support local businesses.

"In my view, a company's caution in adopting AI does not always reflect doubts about (this emerging) technology," he said.

Haryadi said AI could serve as a very helpful tool, but humans must also retain their analytical capabilities, critical thinking and responsibility when drawing conclusions and making decisions.

Arrizki Ramadhan, founder and CEO of Memento Game Studio, a Jakarta-based game development firm, said a growing number of young Indonesians will use generative AI to build startups in the future, especially if it remains affordable. But he hopes that these new ventures will not use AI indiscriminately.

Abhijit Mhetre, executive vice president of Singapore-based startup AI Rudder, said AI skills are about rethinking and imagining, stressing that people should not simply automate existing processes but instead change the way they think.

"Rethink, reimagine, don't change the automation, change the way you think," Mhetre said at the Conversational AI and Customer Experience Summit held in Jakarta on July 15.

According to the latest Microsoft's Work Trend Index 2026 released in June, over 30 percent of Indonesian workers are now categorized as "frontier professionals" or advanced AI users — which is more than double the global average of 16 percent.

The study showed that Indonesian workers are not only quick to adopt AI but are also beginning to use it to generate higher-value work. Over 70 percent of AI users in Indonesia also said they are now able to produce work they could not have produced a year ago, higher than the global average of 58 percent.

Foreign investors have also poured capital into cloud infrastructure, data centers, and AI talent development. They include Microsoft which put in $1.7 billion in local cloud and AI infrastructure; the China-based Range Intelligent Computing Technology Company which is investing $ 5 billion in an AI data center project in Riau Islands; and US-based chipmaker Nvidia partnering with local telecommunications company Indosat Ooredoo Hutchison to build a $200-million AI center in Central Java.

Indonesia's scale makes it a critical digital market: more than 350 million cellular connections and over 210 million internet users place it among the largest globally. The Indonesian digital economy is estimated to have hit about $100 billion in 2025, according to an annual report published by consultancy Bain & Company, Temasek and Google.

The report said Indonesia demonstrates the "strongest commercial momentum" for AI applications, leading the Southeast Asian region with 127 percent revenue growth in AI-featured apps.

To capitalize on this momentum, Indonesia has rolled out a National AI Strategy covering 2020–2045, alongside a roadmap to accelerate adoption, expand digital skills, and strengthen governance. Officials said many administrative tasks will be automated, requiring workers to be retrained in AI.

Automation removes repetitive work and AI makes it faster, according to Sandra Samuel, head of customer service operations at Singapore-headquartered Ninja Van which has operations in Southeast Asian countries including Indonesia.

"But you should not automate work simply for the sake of automation. You should design better decisions, because when you apply AI to improve decision-making, you're going to help it move forward (to solve the real problems)," Samuel said.

Leonardus Jegho is a freelance journalist for China Daily.