Headline / October 2019

Building a Better Future with Indonesia’s ‘Silicon Valley’

By Muhamad Al Azhari

Sinarmas Land, headed by Michael Widjaja, the third generation of the family that founded the Sinarmas Group, one of Indonesia’s largest conglomerates, has been investing in its futuristic vision to build what it has dubbed its Digital Hub. The project is located in a 25-hectare area that functions as a physical platform for both the business and social activities of technology companies.

To support its vision, the property developer started with the construction of buildings in 2017, having allocated Rp 7 trillion ($496 million) for that purpose.

This is only the first stage of the investment, as Sinarmas Land continues to pursue its ambition of creating an ecosystem that connects startups, technology leaders, educational institutions, digital communities, creative industry players and large multinational companies focused on digital technology.

The Digital Hub has since the start sought to become Indonesia’s “Silicon Valley,” in reference to the famous area south of San Francisco Bay in California, which has been home to several global technology giants, such as Apple, Facebook and Google.

Anticipating the Future

“Consumer spending, behavioral spending and lifestyle will be changed by technology. In the property, or any other industries, you will have to catch up with the trend. What we are doing, is trying to anticipate the future,” Michael said in an interview at BSD City on Sept. 11.

A short walk within the Digital Hub shows that the area is more than just a place with a diversity of commercial buildings and smart offices equipped with fast internet access, interspaced with green spaces. It also offers pedestrian walkways and social areas that encourage workplace activities and social interaction on sidewalks, plazas and other shaded outdoor spaces.

Michael spoke exclusively to GlobeAsia after witnessing the signing of an agreement between startup accelerators GK-Plug and Play Indonesia and Digitaraya to develop BSD Innovation Labs, the first startup accelerator program dedicated to property technology companies.

The program is expected to facilitate innovation by prop-tech companies, such as finding better ways to build efficient smart cities and connected homes.

Attending the signing ceremony were Gibran Rakabuming, son of President Joko “Jokowi” Widodo, Sebastian Trzcinski-Clément, Google’s head of developer relations and startup ecosystems for Asia, Africa and the Middle East, and Tangerang Mayor Ahmed Zaki Iskandar.

Michael told GlobeAsia that all digital initiatives by Sinarmas Land form part of the company’s efforts to attract tenants with a focus on technology and the digital sector.

“If we just want to build dozens of buildings in the area, we can do it. The money is there, but the question is what is the concept, who will be the tenants and who will own the soul of the buildings?” said the 35-year-old scion of one of Indonesia’s richest families.

In its vision, as stated on its official website, the Digital Hub aims to create “an ecosystem centered on the knowledge economy values of diversity, camaraderie, health, mobility, connectivity and interaction.” The facility is also meant to empower and ensure that Indonesia’s next generation of technology companies can be successful in the future.

Not wasting any time, a day after the interview, Sinarmas Land signed a memorandum of understanding with Microsoft to explore opportunities for collaboration on transforming BSD City into what it claims to be Indonesia’s first large-scale smart city.

Through digital technologies such as cloud computing, artificial intelligence, the internet of things and data-driven decision making, Sinarmas Land aims, with help from Microsoft, to create a futuristic city that encourages its residences to leverage technological advancement in their daily lives, aided by public and infrastructure services.

“BSD City is our ambitious project with great growth opportunities to explore, one of which is the development of digital communities.

Inspired to be a property industry pioneer, Sinar Mas Land is keen to digitally transform BSD City, which is also our biggest township.

Therefore, we are delighted about this partnership in which we acknowledge Microsoft for its leading digital technologies,” Michael said.

“The partnership will leverage both parties to strengthen their positions on a larger scale and make Indonesia a pilot country, and also BSD City, when it comes to a smart city,” he added.

Apple Already Here

Prior to these initiatives, Sinarmas Land also introduced a futuristic concept of marketing the approximately 6,000-hectare BSD City as an activity center for millennials, tech companies and tech enthusiasts.

In March this year, the company signed a technology development agreement with Grab, known for its popular super-app that offers ride-hailing services, food and package deliveries, and digital payments in Southeast Asia, to provide smart and clean mobility solutions in the city. Grab agreed, among others, to establish the Grab Innovation and Engineering Lab to serve as a research and development center for innovation in BSD City, and utilize artificial intelligence technology to create a smart and clean transportation system through collaborative projects.

Prior to this, one notable milestone for Sinarmas Land was Apple’s opening of a developer academy – the first in Southeast Asia – in BSD City in May 2018. The facility aims to inspire and train the next generation of app developers on the world’s most advanced mobile operating system. The academy offers a multi-disciplinary approach to teaching and learning.

Apple offers daily classes presented by qualified instructors, all experts in their respective fields, to equip students with the skills and expertise to turn their app ideas into reality and bring them to market on the App Store.

Efforts to enliven the city also saw the welcoming of creative industry experts and enthusiasts. In July, Sinarmas Land held movie industry talks for cinema lovers, in conjunction with Creative Nest Indonesia, a company that provides training and facilitates job opportunities in the country’s creative industry.

BSD City also caters to computer gaming enthusiasts with the Esports Academy, situated in the office area at The Breeze BSD City. The facility is believed to be the first of its kind in Indonesia. There is also the Digital Loft, a workspace for millennials.

In education, Sinar Mas Land held the Purwadhika Tech Wave concert in March 2018, in conjunction with the Purwadhika Startup & Coding School and Plug and Play Indonesia. Attending the event was Purwa Hartono, founder and president director of the Purwadhika Startup School, which is a BSD City-based institution offering training in programming, coding and data science marketing.

The leaders of some top private equity companies and content providers, such as Andy Zain, founder of venture capital fund Kejora Ventures; Vikra Ijas, co-founder of fundraising website KitaBisa; Doni Hanafi, chief technology officer of wedding vendor marketplace Bridestory; and Norman Sasono, co-founder of Bizzy.co.id, a digital marketplace for businesses, also attended Purwadhika Tech Wave.

Digital Bridge

About 800 kilometers from BSD City, at Nongsa in Batam, the largest city in Riau Islands Province, Sinarmas Land is building another integrated smart digital city.

“There, we want to build a digital bridge between us and Singapore. So for young people graduating from Purwadhika or the Apple Academy, we offer a job connector service. Like it or not, Singapore is the regional headquarters for many multinational corporations. So our children can have the option to work for such companies in Singapore,” Michael said. With the 62-hectare development, the company seeks to attract local and multinational digital startup companies.

Future-Proof Malls? Why Not?

Beyond its smart city ambitions, Sinarmas Land is known as one of the country’s largest diversified property developers, with interests in various subsectors, including township, residential, commercial, retail, industrial, hospitality and leisure developments, with assets in Indonesia, Malaysia and the United Kingdom.

The developer is part of the Sinar Mas Group, one of Indonesia’s biggest conglomerates, founded by the late Eka Tjipta Widjaja. It has interests spanning from pulp and paper, agri-business and food, financial services, to property, communications, technology, energy and infrastructure.

Michael, who was born in Surabaya, East Java, on July 9, 1984, said the group wants to ensure that its shopping mall developments remain relevant for at least the next decade.

“How can we build a mall that will still be relevant in 15 years? This is very important, because I don’t want to build a mall for yesterday. That’s my new challenge. Everybody says malls and brick-and-mortar stores will die because of e-commerce. So how do we build a mall that can entertain you and your family for the next 10 to 15 years?” he said.

He hinted that the developer may build futuristic malls in two of its townships: Grand Wisata in Bekasi, West Java, and Kota Wisata in Cibubur, East Jakarta.

Sinarmas Land is a 46-year-old company with a proven track record in delivering township developments and commercial spaces in Indonesia through its three listed subsidiaries, PT Bumi Serpong Damai, PT Duta Pertiwi and PT Puradelta Lestari. The three have a combined market capitalization of approximately S$3.9 billion ($2.8 billion).


A Chat With Michael Widjaja

Michael is part of the third generation of the Widjaja family, which controls the Sinar Mas Group. The third son of Sinarmas Land chairman Muktar Widjaja returned to Indonesia from his overseas studies in 2007 to join Duta Pertiwi, which is controlled by his family.

He moved to Bumi Serpong Damai a year later before becoming group chief executive of Sinarmas Land in 2011. The energetic young business leader, who graduated from the University of Southern California in Los Angeles, majoring in international relations and global business, is an influential figure behind the consolidation of the family’s property assets under Sinarmas Land. He shared some of his views on the property industry, the company’s core values and vision and his daily routine.

What do you think about the property sector’s prospects in Indonesia?

The sector has been disincentivized over the past four years. Government policies, such as the recent tax amnesty, and the elections, including regional, legislative and presidential elections, have slowed demand. But after the presidential election, I believe things will settle down. On the Indonesian economy, I remain upbeat, but with caution, as conditions in the world are deteriorating. Things such as a global economic slowdown and the US-China trade war will affect our economy. There may be some advantages we [Indonesia] can snatch from the crisis, such as fewer Chinese tourists visiting the United States, which may be good for us, but in terms of stealing opportunities to get investors in the manufacturing industry to invest here, I think we are already out-competed by neighboring countries like Vietnam and Cambodia. I don’t think we should give up, though. I still believe there are opportunities in times of crisis.

What is Sinarmas Land’s vision?

Our tagline is ‘Building for a Better Future.’ I think the meaning is very broad. But in the context of what we have been doing recently [in the tech and digital sphere], it could mean we want to educate the children of the nation to build a better future. I want our company to participate in helping our young generation, through informal education and training, to get them prepared for a new world. We want them to start thinking how they can become worthy to work at giant companies like Apple, Google, Tokopedia and Gojek.

In business, who did you learn from?

One person for sure, my dad. He’s been so tough to me. But he is also a very good mentor. He allowed me to make my own mistakes when trying new ideas; allowed me to express myself. But also, not to disregard our senior management team at Bumi Serpong Damai; they are very experienced. More experienced than me. I am really grateful to those people who have nurtured me, whether they are still with us or not. I also read lots of books to understand global economic trends.

What are the Sinar Mas Group’s core values?

There are six values, but I want to highlight two. First is integrity. People want to partner with us because they know our reputation. We always make sure we deliver on our commitments. Then, another one is continuous improvement. We cannot stay in our comfort zone forever. We must always move forward. Sinarmas Land is looking at the future; we want to make continuous improvements. These are the drivers that make us want to improve more, explore new things.

How do you consume news every day?

Funny thing, even though people are changing their behavior, and more people now read news online, I still like reading newspapers. Printed ones. I’m still old school.

How busy is Michael Widjaja?

Busy enough, but I believe all people are the same. They have families, jobs and need time for themselves. I’m just like any other ordinary person and I must manage these three things.

What are your hobbies?

Basketball. But to relax, or release stress, I like to see nature; things like trees or animals. It calms the mind and the soul. Sometimes I also go fishing.

Where do you play basketball?

Sometimes here [in BSD City], sometimes in Jakarta. I often play with my old school friends.