Navigating AI and superapp adoption in Indonesia’s public sector

In recent years, the Government of Indonesia has actively promoted a seamless and digitised governance structure, aligning with the spirit of “new public management” - an approach that adopts the principles of modern business to create a government that is more efficient, less hierarchical, and competitive in delivering public services.  

However, this effort has been accompanied by an implicit assumption that technological innovation is a panacea to societal challenges.  

While technology can be a powerful enabler, it is not always the most appropriate or sustainable path forward. Many public sector issues require broader, systemic solutions that go beyond technical fixes.

The current approach heavily influenced by technological determinism - an optimistic belief in technology’s capacity to drive human progress - tends to oversimplify complex realities and ignore the unintended consequences of relying solely on technological solutions.

In Indonesia, there are approximately 27,000 government applications across the country. Unfortunately, these systems are not interoperable, are fragmented, and largely ineffective in delivering public services.  

Over the past two years, the Indonesian government has sought to address this issue by adopting artificial intelligence (AI) and developing superapps aimed at integrating services across various sectors, including tax collection, education, health, and family services.   

While AI itself is not a new concept, we must be cautious not to fall into the trap of repeating a ‘techno-solutionism’ approach. 

To subscribe to the GovInsider bulletin click here.

The limits of AI in public service 

To avoid the pitfalls of techno-solutionism, we must first acknowledge the limits of technology in addressing complex public sector challenges.  

In real-world examples, AI and/or digital technology fails to deliver its intended purpose when social dimensions are overlooked. This does not only occur in the developing country context.  

For example, New York City’s AI chatbot, meant to assist small businesses with legal guidance, ended up causing more confusion than clarity.  

Instead of providing accurate advice, the chatbot was unable to interpret context-specific legal scenarios, often providing oversimplified or misleading guidance. In fact, business owners need personalised legal advice that requires human oversight.

The second example is Coretax, launched by the Indonesian Ministry of Finance in December 2024 to automate and integrate core tax administration processes, intended to speed up procedures and reduce errors.  

However, it has faced issues from registration to billing code generation due to a mass rollout that caused service disruptions, drawing public criticism. The Commercial Off-The-Shelf (COTS) software embedded in Coretax also fails to address Indonesia’s unique tax characteristics, such as the inability to calculate VAT using alternative taxable bases.  

These cases illustrate that relying solely on technological solutions overlooks the critical influence of social and institutional constraints. 

What it takes to build a digital ecosystem  

The limitations of AI and digital initiatives in the public sector reveal the shortcomings of techno-determinism, as they often lead to a narrow focus on technological fixes without addressing the social, institutional, and contextual factors that shape how these tools are designed, implemented, and used.

A government super app or AI-based service is only as effective as the ecosystem in which it is embedded. The different components of the ecosystem include data infrastructure, software architecture, governance, incentives, an inclusive design, as well as a digital workforce.  

There are at least three structural barriers that the Indonesian government must address to put in place an effective digital ecosystem.  

First, Indonesia’s rigid budgetary policy limits the agility and adaptability of digital transformation efforts. Budgetary policy must be dynamic and responsive to user needs, as digital ecosystems are fast paced. A market-shaping budget policy would allow for timely allocation and investment for essential digital infrastructure, such as data backup systems, cloud storage, and cybersecurity tools. 

Second, the fragmented procurement processes contribute to inefficiencies in adapting to the latest technological standards. The government must have clear and defined standards for procuring required digital tools. A streamlined procurement process, supplemented by reliable suppliers, will facilitate a seamless transition to digitalisation, allowing government departments to procure the right technological solutions that align with their intended outcomes.  

As demonstrated by the ransomware attacks on Indonesia's national data center, interference in procurement systems can have severe consequences, leading to the incapacitation of a third-party cloud service provider. This incident also revealed the provider's lack of mandatory certifications and the authorities' failure to enforce the suitability testing by the National Cyber and Encryption Agency (BSSN). 

Third, the current human resources policy within the public sector is unable to attract critical expertise. There is a need for workforce mapping to assess the skills available in the digital job market and identify gaps within the public sector.  

Currently, the policy remains focused primarily on maximising the efficiency of existing staff rather than recruiting  specialised digital talent. 

To sum up, the promise of AI and super apps in transforming public service delivery must be approached through a socio-technical lens – an approach that observes the dynamic interplay between technology and the society in a single analysis without one term taking preference over the other.  

Without addressing social and institutional factors, Indonesia risks prioritiszing tools over purpose and repeating cycles of technological determinism.  

Hafiz Noer is the Head of Research at the Center for Digital Society at the Universitas Gadjah Mada, while Pravitasari is a policy planner at The Ministry of Population and Family Development. The opinions expressed are solely the writers’.