Bali’s rude awakening and rise as a key tech hub in Indonesia

Bali, once known as a tropical paradise heavily dependent on its thriving tourism industry, found itself grappling with the harsh realities of overreliance during the global pandemic.

With borders closed and travelers staying home, the economy took a significant hit. It contracted by 9.3% in 2020 and 2.5% in 2021, before rebounding by 4.8% in 2022.

The economic downturn was mainly due to the decline of tourism, which contributed more than 50% to Bali’s economy. The sudden and drastic drop in international and domestic tourist arrivals caused many locals to lose their income source.

Recognizing the vulnerability of relying mainly on tourism, Bali’s local government has made a deliberate shift toward supporting and nurturing the island’s burgeoning tech sector, setting the stage for a post-pandemic recovery.

A group of women in traditional Balinese costumes / Photo credit: Shutterstock

According to Made Artana, founder and chair of local university Primakara, Bali’s future economy will be supported by multiple pillars, one of which is the creative and digital sector.

“Today, Bali’s economic foundation still rests heavily on a single industry, namely tourism. But the pandemic has delivered very costly lessons to the region,” Artana, who is also an expert staff to the local administration, tells Tech in Asia.

To usher in the new era, the government recently organized the Bali Digital Festival, bringing together key players in the creative and digital industry, including startups and tech firms.

Small but growing community

While smaller than Jakarta’s, Bali’s tech ecosystem has witnessed a surge in activity, with incubators, accelerators, and co-working spaces sprouting across the island.

Currently, Artana is in the process of registering the Bali Tech Startup, an association that he co-founded alongside four others.

Another co-founder of the association is Indra Adhi Suputra, CEO of local SaaS platform Djoin. The Bali Tech Startup, which aims to bring together and represent tech startups on the island, has 40 member firms, says Suputra.

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The exact number of startups based in Bali remains unclear, highlighting the need for initial data collection and assessment by the association, he adds.

In 2018, the Indonesia Digital Creative Industry Society recorded 32 startups based in Bali and West Nusa Tenggara. Three years later, there were 59 startups in Denpasar, the capital city of Bali, alone. In comparison, the Greater Jakarta area had nearly 500 startups in 2021.

Challenge to attract funds

Expanding young and foreign talent pool