Smart Cities in Indonesia: Why Scale Has Outpaced Coordination

Background

Indonesia’s smart city journey formally began in 2017, when the Ministry of Communication and Informatics launched the Gerakan Menuju 100 Smart City (Movement Toward 100 Smart Cities) alongside the Ministry of Home Affairs, the Ministry of Public Works and Housing, and Bappenas [1][2]. The programme guided selected cities and regencies in developing smart city masterplans structured around six pillars: smart governance, smart society, smart economy, smart living, smart environment, and smart branding [1]. By 2021, the movement had recognised its hundredth participating city or regency, an unusually large cohort compared to most national smart city programmes in the region [3].

The scale of ambition reflects the scale of the problem it is meant to solve. Indonesia is one of the fastest urbanising nations in the world. Government projections cited by public health researchers estimate that 56.7 percent of Indonesians lived in cities in 2020, rising to a projected 66.6 percent by 2035, while the World Bank projects that by 2045 around 220 million people, or 70 percent of the population, will live in urban areas [4]. Separate estimates place urban population share as high as 83 percent by 2045 [5]. Whichever figure proves accurate, the underlying pressure on housing, transport, waste, and public services in Indonesia’s cities is not in question.

Current Statistics

Indonesia’s internet foundation, the layer smart city systems depend on, has grown substantially but remains uneven. The Indonesian Internet Service Providers Association (APJII) reported that internet penetration reached 80.66 percent of the population in 2025, equivalent to roughly 229.4 million users out of 284.4 million people [17]. Urban penetration stood at 85.53 percent against 76.96 percent in rural areas [21], and close to 57 million people, concentrated in regions such as Sulawesi, Maluku, and Papua, remain entirely offline [23]. Java continues to dominate usage, accounting for 58.14 percent of the country’s total internet users despite representing a smaller share of its landmass [21]. Average fixed broadband speeds reached 43.18 Mbps and mobile speeds 50.77 Mbps in 2025, and a basic mobile data package costs about 1.32 percent of average income, above the 1 percent threshold commonly used to define affordable access [17].

On the programme side, the 100 Smart City initiative has produced measurable activity: annual evaluations, masterplan submissions, and awards distributed to high-performing regencies each year since 2017 [11][15]. Individual cities report tangible pilots, including Jakarta’s expansion of electric TransJakarta buses, credited with cutting an estimated 5.5 million kilograms of carbon dioxide emissions, and international collaboration such as the ASEAN-Australia Smart City Trust Fund’s support for Makassar [6]. At the regional level, however, self-assessed maturity scores remain modest. Manggarai Regency’s mid-term development plan for 2021 to 2025 recorded an existing smart governance score of 7.0 against a target of 10.0, citing constraints in skilled human resources, telecommunications infrastructure, and public technology adoption as the primary reasons for the gap [16].

The Core Challenges

A missing legal and regulatory foundation. Evaluation sessions for the 100 Smart City programme have repeatedly surfaced the absence of a unified legal framework for implementation. Ministry of Home Affairs officials have acknowledged that national standardisation, aligned to ISO references, was still being drafted years after the programme’s launch, leaving individual regions to interpret smart city mandates without consistent guardrails [10].

Budget dependency and creative workarounds. Officials overseeing the programme have openly encouraged local governments to look beyond regional budgets (APBD) for financing, pointing to examples such as community beautification competitions used in place of funded infrastructure projects [10]. While resourceful, this pattern reveals a structural gap: many regions lack a dedicated financing instrument for smart city infrastructure and instead rely on ad hoc, low-cost substitutes for genuine capital investment.

Uneven human resources and digital literacy. Regional smart governance assessments consistently cite a shortage of skilled personnel, alongside limited public uptake of the technologies being deployed [16]. This shortage is not confined to smaller regencies; it recurs across evaluation reports spanning multiple provinces and administrative tiers, suggesting a nationwide capacity gap rather than isolated local weaknesses.

Persistent urban-rural and inter-island connectivity gaps. Indonesia’s archipelagic geography compounds every other challenge. Rural internet usage sat at 56 percent against 74 percent in urban areas as of 2022 [17], and provincial disparities remain wide, with regions such as Maluku and Papua trailing at 69.26 percent penetration compared to Java’s 84.69 percent [21]. Educational infrastructure mirrors this divide: only about 30 percent of rural schools have reliable high-speed internet, compared with 85 percent of urban schools [19]. A smart city framework applied unevenly across such disparities risks widening, rather than closing, the gap between Indonesia’s largest cities and its secondary and remote regions.

A technocratic bias that can sideline citizens. Academic reviews of Indonesia’s smart city rollout, examining digital citizen participation channels in Medan, Jakarta, and Surabaya, found that most cities cluster at the lower rungs of the citizen participation ladder, with genuine partnership-level engagement, such as Jakarta’s civic hackathons, remaining the exception rather than the norm [7]. The broader critique echoed in this research is one familiar from smart city literature elsewhere: without deliberate design, smart city technology tends to become technical and mechanistic, losing its essential role as a livelihood space for citizens rather than a showcase of infrastructure [7].

Fragmented coordination across a very large programme. With more than a hundred participating cities and regencies, each producing its own masterplan under six broad pillars, the movement has generated an enormous volume of independent local plans. Evaluation reports show that coordination between stakeholders is treated as a stated principle of smart governance [11], yet the same reports return year after year to similar gaps in funding, human resources, and regulation, suggesting that coordination in practice has not kept pace with coordination on paper.

Three Lessons Indonesia Should Avoid

1. Do not scale to one hundred cities before the financing model is solved. Encouraging regions to substitute community competitions and informal fundraising for genuine capital investment may produce visible activity, but it does not build the sustained infrastructure a smart city needs. Indonesia should avoid expanding the number of participating cities and regencies faster than it resolves how each will be reliably financed beyond regional budgets.

2. Do not let regulatory standardisation trail years behind implementation. When officials are still drafting unified legal and technical standards years after a hundred regions have already begun implementation, each locality is left to define smart city success on its own terms. Indonesia should avoid launching nationwide programmes ahead of the legal and technical framework meant to guide them consistently.

3. Do not build smart city systems around infrastructure while treating citizen participation as an afterthought.Research into digital participation channels found that most cities offer only lower rungs of engagement, such as information sharing or consultation, rather than genuine partnership with residents. Indonesia should avoid measuring smart city success purely through infrastructure and connectivity indicators while leaving citizen participation, digital literacy, and rural inclusion as secondary considerations addressed only after the technology is already in place.

Indonesia’s smart city movement remains one of the most ambitious in scale anywhere in the world, spanning a geography and population that few other countries need to coordinate at once. What determines whether that ambition matures into lasting impact will not be the number of cities enrolled, but whether financing, regulation, connectivity, and citizen participation are built as the foundation of the next phase rather than treated as unfinished business from the last one.

What would it take for Indonesia’s smart city movement to close the gap between national ambition and regional readiness?

References

1. Indonesia Smart Cities dan Perkembangannya, Pusat Pelayanan Teknologi Informasi. https://p2ti.uma.ac.id/indonesia-smart-cities-dan-perkembangannya/
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