Microsoft Smart Secondary City Project Indonesia 2015

Executive Summary

Cities have been functioning as the engine of growth, not to mention in developing countries in Asia. This premis is considerably true especially with the recent massive influx of people into cities which evidently has generated more productivity through more and varied economic activities. However, along with its potential to boost growth, urbanization may leave searious problems for the receiving cities. Reports predict that in less than two decades from now, more than 90 million people in ASEAN member states will migrate and live in the cities. Hence, discussions have been evolving around how to maximize the positive side of urbanization such as economic growth and minimize the negative side as such the problems arise in the city as impact of urbanization.

In the midst of urbanization wave, Asian cities—which mostly developing cities, inarguably, are facing complex challenges, ranging from poor city planning, neglected infrastructure development, environmental degradation, poor social development policy, high crime rates, and the high cost of living. Thus, wiser cities develoment scenario is deemed imperative, especially developing countries of which tendency is to develop only its one or two major cities. Secondary citiy development is thus seen as one promising strategy both to anticipate massive urbanization in the coming years by diverting destination to secondary cities and, at the same time, to encourage more even distribution of both economic and human development. Escalating development of secondary cities in the concept of “smart city”—with its elements of effectiveness, environment consideration, and innovation—is considerably a smart move. A smart government uses ICT for improving the quality and accessability of public services delivery in order to increase quality of the city and quality of life in the city per se.

Microsoft Secondary City Project is a research project conducted by Lee Kuan Yew School of Public Policy National University of Singapore (NUS) in cooperation with Microsoft Corporation. With purpose to better understand challenges faced by secondary (medium-size) cities in Southeast Asia, and the extent to which information and communication technologies (ICT) are used to deal with these challenges, this research involves four research teams in four different countries throughout South East Asia, namely Indonesia, Thailand, The Philippines and Vietnam with more than 40 cities being observed. In this report, secondary cities in Indonesia are the research objects. There are 12 secondary under observation i.e. (in alphabetical order) Ambon, Bandung, Denpasar, Jayapura, Makassar, Medan, Palembang, Samarinda, Semarang, Surabaya, Surakarta and Yogyakarta, with Universitas Gadjah Mada (UGM), Yogyakarta, Indonesia acts as local research partner. To assure the triangulation principal and to obtain as objective results as possible, this research employs various methods ranging from interviews, perception surveys, focus group discussion (FGD), digital analysis, secondary data, and observation. The participants of this research are city mayors (or their representatives), bureaucrats, academic community, netizen, local start ups, and society in general. In Indonesia, data collection process was conducted from December 2014 to February 2015. Report provides elaboration and analysisi of research results of each of those 12 cities.

First of all, challenges faced by the city are identified. This includes a wide range of social components covering the whole city system, which includes issues of urbanization, slum areas, utilities inadequacy (water, electricity, sanitation), peace and order, human resources, environment, water supply, sewage/drainage, tax collection, financial resources, garbage traffic, housing, as well as social problems. From the findings in the 12 cities, urbanization is commonly seen as a moderate to serious problem, which resulting in more problems on the housing planning as well as the outbreak of slum area, like those found in Semarang, Palembang, and Surabaya. At the same time environmental problems are also seen as moderate to serious. The environmental problems includes sewage and drainage, pollution, as well as garbage management issues. While traffic problems vary, some cities have to deal with serious traffic problems while others are quite moderate. Traffic problems has much things to do with urbanization, which suffice to say it is quite a bit an impact of urbanization.

Second aspect that is being scrutinized in the report of each city is the competitiveness, governance and ICT. In this section competitiveness is being much related to the adequacy of infrastructure such as road, electricity, water, airport, trade port, etc. In essence, cities with better infrastructure are deemed to be more competitive, as most of the cities function as hub and center for value chain activities for its surrounding region. While in the governance, the commitment of local authority to use ICT is examined whether the local authorities posses such ICT master plan. Surprisingly, findings yield some cities with less or no specific ICT master plan and less finance for ICT development are relatively more advance in implementing e-governance than those with specific master plans and, sometimes, with bigger ICT budget. However, although with different priority scale and pace, all the 12 cities are committed in improving the implementation of ICT in their government activities as a means to improve its public service delivery and to provide two-way communication means to the people. The latest can be seen from, among others, the degree to which city mayor and other government officials use social media to reach public. Besides, this report also indentifies the extent of city government’s commitment to improve competitiveness of small medium industries (SMEs)—as one of the biggest endowment for economic development— through the use of ICT, especially as a means of communication and coordination with those SMEs.

ICT and public services are elaborated in the subsequent subsection of the report of each city. In this subsection, the degree to which city government uses ICT to improve its public administration, say digitalized tax collection, revenue transfer and other expenditure management, key performance indicators, etc. Besides, this section also reports the stage of which the city has used ICT to support its public safety and emergency management as well as population, health, education and other social services. Challenges in ICT use in each city are also being examined. Some challenges found are, among others, lack of awareness of ICT solutions, lack of funding, lack of qualified staff, lack of vendors, lack of access to internet connection as well as lack of interest in ICT solutions per se.

All in all, the findings in each of the 12 cities yield different stage each city has achieved in terms of its ICT usage. Some cities are considerably more advanced in using ICT to support its activities for good governance (e.g. Bandung, Surabaya), while others vary, from moderate to poor/minimum. However, despite the variation of the degree of ICT usage, commitment to improve is shown by each city.

Summarized form of our research can be accessed below.