- Key components, especially education already in place at existing BSD city
- Aims to create Jetsons-like playground for millennials-powered startups
THE ceremonial shovel hit the ground at 10am on May 18, signifying the official ground breaking for Sinarmas Land’s ambitious US$524 million (seven trillion rupiah) Digital Hub in Bumi Serpong Damai (BSD), South Tangerang, a city of 1.4 million in Banten province that is part of Greater Jakarta. The local media has given it the decidedly sexier moniker, ‘Indonesia’s Silicon Valley’.
But ask Sinarmas Land chief executive, Michael Widjaja about when it struck him to carve out a Digital Hub as part of his mega BSD project, and he will take you back to December 2014 when he was travelling to the US with a friend who happens to be a VC with East Ventures, one of Indonesia’s most respected venture capital firms.
“We happened to start talking about the startup world and the digital economy and I was struck by how cocky my friend was about how brick and mortar companies were going to be disrupted,” he shares with DNA in his office at BSD, the development that first began 20 years ago.
The grandson of one of Indonesia’s richest men, Eka Tjipta Widjaja, who built a corporate empire that spans almost every major industry in Indonesia, all of it Brick & Mortar based, Michael had to challenge his friend. Candid enough to admit that he knew nothing of the startup world and the emerging digital ecosystem, “I asked him something about everything.” That included how property could be disrupted.
[Correction: An earlier version incorrectly referred to Michael as the son of Eka Tjipta Widjaja.]
The discussion resonated and stayed at the back of Michael’s mind for the next two months as he started kicking around the thought of his friend possibly being right.
In February 2015 Michael then had a chat with his team about the possibility of digital disrupting their business. Predictably there were those who saw digital as a threat but Michael challenged his team to try to see the opportunities as well and not dismiss the digital trend as a threat or worse, a passing fad.
Key components already in place, especially education
“When we did this, we realised that because the startup culture and ecosystem were still new in Jakarta, no one location had become the hub for startups. So we thought, why not house them here at BSD? We’ve got a city here as well, one that we feel is a better place to live, work and play from,” said Michael (pic, above).
The realisation also hit Michael and his team that they already had key components of the ecosystem in place to build a smart city to attract startups. Key was the talent pipeline. “From kindergartens to universities, private to public, we have around 100 education institutions in BSD including a local community that lives here in the 40,000 homes we have built so far.”
Recognising the importance of the education base, “this is the key to the future of the Digital Hub”, Michael is already thinking of bringing in gaming and animation schools and also training for cyber security experts. “We are lacking talent in cyber security,” he feels.
Then there are the various businesses, including Unilever that has moved its Jakarta HQ to BSD’s Green Office Park in a high-profile win for the city, with Unilever’s office sitting across the road from the Sinarmas Land office. Another high-profile future tenant of the Green Office Park is Apple, which will move in with its 100-strong R&D team.
While it won’t be in the Digital Hub, the close proximity of being in the same neighbourhood is enough of a pull for Michael’s Digital Hub dream where he aims to attract not just startups but R&D centres from various industries, not just tech.
“We want to build a vibrant and exciting community where engineers get together with designers, with digital marketing specialists with artists, with coders for various community events where our knowledge workers try to solve their problems from different angles and with fresh perspectives from experts in different fields,” says Michael.
But he has no intention of trying to create this fertile and highly skilled knowledge mesh of talent on his own, despite the formidable resources the wider Sinarmas group could throw into the ring, including a bank, insurance company, telecommunications and agribusiness. “If I try to do it myself, I’ll die,” he laughs. “Building an ecosystem is better done together for better traction.”
That’s where he plans to invite various ecosystem players such as accelerators to come be part of his Digital Hub. And he’s got another idea up his sleeve on how to attract startups to leave their Jakarta officers and it’s centered around creating a category of special digital amenities, “that come close to a Jetsons-like playground/test-bed environment,” he hints, declining to reveal more for fear of tipping his hand.
But he notes that startups may want to use fully-stacked media labs or equipment like 3-D machines but don’t have the means to afford this type of hardware in their early days. And that’s his ultimate goal, he declares. “By bringing the talent and the hardware and software to Digital Hub, I want to help nourish an additional pool of new digital talent that lives in Serpong and powers Indonesia’s digital ambitions.”
That pool of talent will be predominantly millennials and to help create the type of work spaces that they would want to be in, Sinarmas Land hired US architectural firm NBBJ, which designed Amazon’s new HQ in Seattle. “They told us that for tech companies especially, unconventional work spaces are the future and that is our challenge in creating the Digital Hub, building unconventional, fun spaces for millennials whose minds operate differently,” acknowledges Michael.
But he’ll use a tried and tested incentive in encouraging startups to move from Jakarta to BSD.
“We recognise that the first one to three years are the hardest for startups when cash flow is tight. So we will cushion them when they stumble, catch them when they fall by offering deferred rental in the first few years until they can pay back from year three or four onwards,” says Michael.
As a private developer building the Digital Hub with no incentives and policy support from the government, that is all Sinarmas can do. “Any more and you are cutting into my bone and I can’t walk anymore then,” he says admitting to be envious of Malaysia’s pioneer smart city, Cyberjaya which has full government support.
But what Michael has going for himself is the fact that his Digital Hub is not a greenfield city as Cyberjaya was. As he says so himself, “everything that the Digital Hub needs is there, we just have to fine tune, make the right investments and make it work.”
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