- Indonesia’s rapidly expanding digital economy is driving MSME growth and increasing women’s participation, but much of this inclusion remains informal and lacks adequate protection.
- Despite strong headline growth, structural issues such as poverty, limited digital access, and reliance on informal work mean that digital participation does not guarantee fair pay or security.
- Without stronger governance, labour protections, and regulation, Indonesia’s digital expansion risks reinforcing existing inequalities rather than delivering genuinely inclusive and sustainable economic progress.
Indonesia’s digital economy is expanding at remarkable speed, with millions of businesses moving online.
Digital trade and e-commerce are being positioned as major drivers of inclusive progress, with efforts focused on supporting micro, small and medium sized enterprises (MSMEs), specifically led by women and/or marginalised communities.
According to the United Nations Conference on Trade and Development, Indonesia’s virtual market is setting the pace, driven by widespread digital adoption and a developing corporate sector. However, this narrative contains important tensions and is far more complex than it lets on.
Beyond the headline figures, lies a quieter reality: much of the newly discovered integration and engagement remains informal, unprotected, and often overlooked. The promise of digital inclusion frequently collides with uneven access – as is often the case with women – where increasing participation does not automatically translate into security or protection.
This raises a pressing question: is quantity – more participants and higher numbers – being prioritised over quality, meaning genuine and secure inclusion?
Selling inclusion
With a surge in online adoption, Indonesia’s commercial sector is purportedly experiencing a digital transformation unlike anywhere else in the region. Valued at roughly $90 billion in 2024, it represents more than a third of Southeast Asia’s total digital market and is expected to increase further thanks to a variety of initiatives.
A key driving force is the ‘Golden Indonesia Vision 2045’, which sets ambitious targets for the country to become one of the world’s top five largest economies by 2045.
A recent UN-backed eTrade assessment reinforces this vision, highlighting a strengthening financial ecosystem that positions Indonesia as a key player in broader economic development.
Regional trends from previous years lend further support to the assessment, as an industry forecast from last year estimated that Southeast Asia’s virtual market was on track to surpass $300 billion in gross merchandise value by the end of 2025, reflecting double-digit growth across the field.
Additionally, Indonesia has also been seen to spotlight women’s rising involvement within the industry, with earlier data from 2020-2023 showing meaningful gains in female participation.
For instance, findings from the World Bank noted that the share of women entrepreneurs engaging in e‑commerce more than tripled between 2017 and 2020, jumping from 2.7% to 7.5%. Over half of the 8.4 million MSMEs that adopted digital technology during the pandemic were female‑led, demonstrating women’s central role in the ‘online shift’.
Moreover, nearly 60% of internet‑using women who left formal employment began working across digital trade after the COVID pandemic, highlighting how digital platforms are opening new routes to economic activity and painting a positive picture of women’s gradual involvement within the digital sphere.
The digital divide
However, while these statistics suggest exponential growth and inclusion, the reality on the ground paints a slightly different picture. In practice, progress is far more uneven than the numbers may imply.
Informal trade remains the backbone of the nation’s workforce, spanning all sectors, including electronic commerce (e-commerce), with women disproportionately in low-paid and unregulated roles.
The ILO notes that, although a significant number of female employees are present in the digital labour force, they mostly fill unofficial and non-standard positions, limiting access to social protection, financial security and, more formalised digital opportunities.
Understanding Indonesia’s reliance on informal employment is crucial for its future: it cautions against taking growth assessments and predictions at immediate face value, and highlights why digital participation is far from a quick-fix solution.
Most importantly, poverty remains a primary structural issue across the country, with millions relying on precarious work to survive, perpetuating the cycle of informality. This includes many of those reflected in the statistics above, whose engagement in the digital economy may take the form of gig work, home-based businesses, or small-scale online sales – activities that are either unregistered or lack official protections.
Yet, without accounting for this informal foundation, policy projections and electronic trade assessments may also risk overstating the inclusivity and stability of digital resilience, offering a picture that does not fully incorporate lived realities.
This also prompts a closer look at who is able to participate in this rapidly evolving digital landscape.
Digital literacy and access to platforms still shape entry into the market, leaving many locked out and ‘disconnected’. And, even for those who do get in, participation doesn’t necessarily mean fair pay. Wages vary widely across regions and sectors, and enforcement, as well as gender parity, remains far from guaranteed.
Growth without guarantees
Therefore, beneath the narrative of digital expansion lies a more intricate set of human rights complications. Informality is not disappearing, rather, it is, in many ways, shifting online. As more work moves onto digital platforms, inclusion and exclusion operate simultaneously: entry becomes easier, but protections do not follow.
In this sense, the digital economy appears to replicate long-standing labour vulnerabilities under the banner of innovation.
While the eTrade Assessment presents an optimistic, forward-looking roadmap, UNCTAD’s latest Global Trade Update adds a more cautious perspective. It does not replace the earlier assessment, but complicates it – moving the focus from opportunity to exposure.
The 2026 warning points to a trade environment shaped by financial strain, fragmentation, and geopolitical pressure, with developing economies such as Indonesia facing heightened risk. Digital trade, therefore, unfolds within conditions that are far less stable than initial projections suggest.
—
More broadly, the expansion of digital markets without parallel investment in governance raises concrete accountability concerns. In the absence of coordinated frameworks on labour rights, data protection, and platform regulation, economic gains risk concentrating at the top, while insecurity is absorbed by those at the margins.
At the same time, international institutions, such as the International Labour Organization (ILO), are pushing for more structured inclusion – supporting transitions into formal employment and calling for human rights perspectives to be embedded in the digital policy design.
Indonesia, for its part, has shown resilience despite external pressures, maintaining relative economic stability even amid global uncertainty. But, the gap between participation and protection across the digital sphere remains unresolved.
