THE ACADEMY OF BUSINESS STRATEGY - INDONESIA
KUKUH KURNIAWAN (AGP) MSc ME B.Eng
ASSOCIATE GLOBAL PARTNER (AGP)
GEOGRAPHICAL LOCATION: Jakarta (Indonesia)
As the capital city of Indonesia, nobody knows exactly when Jakarta started its journey throughout history. The history of Jakarta can be traced back to the 5th century when the ships from China, India, and other trading nations at that time passed by Jakarta to traded spices. In 1513, four Portuguese ships under the command of Alvin arrived in Sunda Kelapa (the former name of Jakarta) to traded spices as well. Other Europeans that came to Sunda Kelapa are the Dutch and the British. The Dutch had made it as the main governmental center during their colonization of Indonesia. At that time, they named it Batavia. Batavia became the center of trading network with wide spread agents Reasing Deshima (Nagasaki) in Japan, Surate in Persia, and Capetown in South Africa. Inter-trade among Asia was more profitable than inter-trade between Asia and Europe. For Indonesian case, it made sense because of the inequality between the Indonesian and the Dutch. The Dutch exploited the Indonesian soil through colonization for its own good without paying attention to the local condition. Even, the prosperity of the Dutch in the period of 15th to 19th century was the result of exploitation and exploration of Indonesian natural resources. As trading network, the Pasar Ikan (Market Fish) once was the pulse. Here, the site where the origin of the capital of Indonesia, Jakarta, came from. After the independence of Indonesia, the founding fathers of Indonesia established Jakarta as the capital city. During the struggle against the Dutch, the capital city was moved from Jakarta to other cities (e.g. Yogyakarta). However, the capital city of Indonesia was moved back to Jakarta again after the situation went back to normal.
Exciting and emerging are suitable words to describe Jakarta now. Indeed, it is still the center of government and financial districts of Indonesia. The situation is vibrant and the last decade performance shows that Jakarta will still be interesting city to look at. It is true that Indonesia had financial crisis in 1997/1998 and it brought devastating impacts. Rising unemployment was common thing during the crisis in Jakarta. However, Indonesia can stand up quickly and build up the development ladder again. Specifically, Jakarta is still the most important cities to create jobs for skilled and knowledge workers. Now, the world perceives Indonesia as an emerging nation that is on track toward its development stage as it was before the crisis. Even, the other I of BRIC (Brazil, Russia, India, and China) might be Indonesia. The confidence level of investment both from domestic and foreign fund, surplus trade balance, controlled inflation, medium level of savings, and other macroeconomic indicators show the Indonesian economic stability. The competition of local firms is getting healthy overtime through privatization of state-owned enterprise recently, such Garuda Indonesia and Krakatau Steel. Of course, it creates good climate of business and investment. Growth in Indonesia’s economy has been supported by rising consumer confidence, which, according to a central bank index, climbed to a five-year high in July 2009. The political stability is also the main source of confidence among economic agents. It shows that the economy at micro level confirms the emergence of economic at macro level. Overall, Indonesia, particularly Jakarta, promises exciting businesses.
Since 1970s, Indonesia has made export as the main source of economic growth. In other words, Indonesia is the outward-looking country and an open economy. Indonesia liberalized the trade further in 1980s (e.g. the removal of non-tariffs barriers), in 1990s (e.g. actively participated in Uruguay Round and joined ASEAN Free Trade Area), and 2000s (e.g. joined ASEAN-China Free Trade Area and further liberalization in agriculture sector). In the future, the liberalization will go further (e.g. trade liberalization through Asia Pacific Economic Cooperation (APEC) scheme and liberalization utilities industries). So, what is the relevance with Jakarta? Since the Dutch colonial era, Jakarta had been the main port and trading network. This role is still attributed to Jakarta until now. Through trade liberalization, Indonesia will expect to expand trade volume with other countries across the globe. It means Jakarta will play crucial role in providing infrastructure for ships. For sure, Jakarta will be important hub to supply goods across Indonesian archipelago. The road transport network will also be important intra and inter islands. The stable economic growth at about 7% per year will attract domestic and foreign investors. One stop shop of investment through Indonesia Investment Coordinating Board will provide seamless and transparent flow of investment. The investors will also have broad choice on which sectors they want to invest. Every island in Indonesia is unique and it has its own competitive advantage, range from primary products (e.g. palm oil, natural gases, oil, and coal) to services (e.g. finance and information technology). The diversification of Indonesian economy might imply the sustainability of its economic development. Indonesia partly depends on the export of natural resources. Thanks to the human development so that Indonesia can diversify its economy. Agriculture and manufacturing will also be important sectors as the engine of growth. In the agriculture sector, Indonesia will gain productivity through the modernization of production machine and method of agriculture. Some studies suggest, Indonesia will gain the most during the trade liberalization in agriculture among ASEAN nations. In the manufacturing sector, Indonesia will largely depend on manufacturing with un-skilled workers (e.g. textiles, apparels, and electronic). China will be the closest competitor for Indonesia since it has similar export structure in this sector and similar level of wage. However, Indonesia has invested heavily in some strategic sector for sustainable and future economic development. Heavy industries, information technology, and some research in basic science (e.g. nanotechnology) are some of the initiatives. Stability in politic will also be properties of Indonesia. Indonesian society has been living with motto “Bhinneka Tunggal Ika” (Unity in Diversity). Indonesia experienced some ethnic and religion violence, but it was in small scale and it did not affect the large portion of population. Political stability, security, and safety are important aspects in economic development because these factors influence the animal spirit of economic agents. Political stability and economic development are two sides of a coin. The causal relationship between them might be a two way street. Therefore, the political stability will sustain the economic development of Indonesia and vice versa.
Kukuh Kurniawan (AGP)
Global Partner status (Associate – Executive – Senior): Associate
Country of registration: Indonesia
City of registration: Jakarta
Market analysis and design
Business model development
Design of business cases
Operation and project management
INDUSTRY SECTOR EXPERIENCE:
Internet and telecommunication
QUALIFICATIONS AND EDUCATIONAL ESTABLISHMENT:
M.Sc. Engineering and Policy Analysis – Delft University of Technology
Master of Economics, Technology, and Territory – University of Paris XI
B.Eng. Electrical Engineering – University of Indonesia
I have passion in mathematics and it made me to enrol at University of Indonesia, majoring in Electrical Engineering. To be more specific, I chose automation and control engineering as my specialization. I had chance to be assistant researcher of control engineering laboratory. Through this role, I had exposure on how to do the research and improve my teaching skill. During my undergraduate years, I also had exposure in production and manufacturing management through internship at Omron Manufacturing of Indonesia. It is the first time I had opportunity to experience the application of control engineering technology. Omron gave me facilities to program relay punch machine and optimize the production processes. In my school years at University of Indonesia, my interest was not only about science and technology. I developed my knowledge and personalities by joining discussion club on economics. Indeed, I enjoyed it since I could relate technology and economic aspects. Even, it will be more interesting to analyze things in multidisciplinary environment. After my graduation, I decided to join Unilever as Assistant Engineering Buyer. As part of supply chain team, I had to bridge the diverse interests among engineering team, finance team, and production team. This multidisciplinary environment made me to have exposure in manufacturing management, inventory management, design of outsourcing and auctions, and commercial aspects. Some highlights of my experiences include: Led a team to introduce new policy in auction of selling factories’ assets. Resulted better asset valuation and quicker disposal of unnecessary assets. Led a team to standardize the price of routine procurement through negotiation with suppliers and analysis of procurement pattern. Resulted faster processing time of purchase order, better delivery time, and healthier inventory level. Managed day-to-day operation dealing with external actors (e.g. suppliers and contractors both locals and overseas), including selection of suppliers and contractors, auditing, auction, negotiation, delivery, cost analysis, and quality control. Managed day-to-day operation dealing with internal actors (e.g. warehouse, production, finance, legal, and marketing team), including managing engineering team’s budget monitoring inventory level, monitoring the production schedule, and monitoring the marketing activities. As a buyer, I managed the demand side of a company I worked for. To get the complete picture, I had to taste the supply side as well. Therefore, I decided to join Cisco Systems as Account Manager. The other reason I joined this company was the opportunity to be part of global community with cultural diversity in its office at United States. I developed my business acumen even more without neglecting my expertise in technology. I developed market in internet and telecommunication sector and here are some highlights of my experiences. Developed strategic account planning, which consist of competition and market analysis, SWOT analysis, product mapping, regulatory issues, internal clients’ organization and its financial report analysis, and prospective projects. Achieved my annual quota through establishing relationship at all levels with some strategic and high-touch service providers accounts, managing relationship with global telecommunication infrastructure companies (e.g. Nokia Siemens Network and Ericsson), and managing Cisco business partners. Created sales opportunities amount to USD 150 thousands in un-touch or start-up telecommunication operators. Analyzed macroeconomic situation and policy issues to derive its implications to the strategy. Led a team to have workshops and proof of concept. Resulted new selling opportunities and revealing customers’ needs. For example, the development of internet backbone, information technology infrastructure upgrade, and contact center upgrade in Indosat. Ability to design feasibility studies and business model for customers. Worked with databases (e.g. financial report, consultants’ publications, and market data) to gain market insights. Created proposals and business cases to convince internal and external actors so that the projects are valuable for both sides. Built solid team work through vertical and horizontal coordination across different departments. Formulated and presented financial aspects of projects in front of clients. Created annual budget proposal for internal department use and proposed budget for projects to clients as well. My other exposures include understanding the technology, economic, and policy aspects of network industries (mainly in internet and telecommunication, energy, and supply chain).
Raleigh (NC), United States
Delft, the Netherlands
Global Partner preferred location
To contact Kukuh Kurniawan (AGP), please forward an email to the Academy of Business Strategy.