INTRODUCTION

Beyond well-known areas such as Batamindo Industrial Park, Kabil Port and the shipyards around Batu Ampar, investors have a new destination in Batam. It is Nongsa Digital Park, located on the island's northeast corner; and now receiving firm-owners, managers and talent scouts from Singapore.

Inaugurated in March 2018, the park contains several smallish buildings grouped around a lake where about 300 people work for some 50 firms. These IT professionals are engaged in tasks such as coding, application development, data analytics as well as web design for Singapore-based firms in various sectors including logistics, education, travel, fintech, and insurance.

Rather than using separate offices, these people gather in large shared spaces consisting of long tables with individual work stations. When necessary, they use separate rooms for in-depth discussions and, in other cases, teams working on specific projects occupy purpose-built and fitted rooms. The atmosphere is young and dynamic, with stencilled patterns on the walls, table football in the corner, and most people dressed in black.

Despite the informal vibe, these programmers and web designers work intently and are closely integrated into projects being done in their respective client firms in Singapore. Beyond being wired into headquarters, these professionals often travel to the city-state for training and, in other cases, supervisors come to Batam to induct or supervise new hires. Output, motivation and career development are monitored closely on-site.

Despite its small base, the number of firms and workers in the park have increased steadily since its launch. The first three office blocks are full and three new buildings have been completed. There are plans for a much larger development, with leisure facilities and residential areas nearby. There are also promising investments in the pipeline by other investors, including a large Indonesian conglomerate as well as an industry major.

While still small in size, the Digital Economy (DE) sector has many structural similarities with the export-for-manufacture model that underpinned Batam's rapid economic development in the 1990s and early 2000s. However, rather than leveraging Indonesia's abundant ranks of lower-cost unskilled labour, this new sector is entirely premised on utilizing skilled workers.