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Technology, creative economy drive Bandung’s growth

Article - July 28, 2017

The capital of West Java and traditional center of the Sundanese people, Bandung is the country’s most dynamic and open-minded technology hub


Taking into account the volume of territory and population that the greater Bandung area encompasses, this city is in fact the country’s second largest metropolitan zone after Jakarta. Its close proximity to the capital, just 87 miles to the south, is contrasted by its location high in the mountains. At over 2,500 feet above sea level, Bandung is much cooler than Indonesia’s humid, sea-side population centers.

Due to its agreeable climate and ease of accessibility (even reachable by a short and scenic railway journey) the city is a popular getaway destination for Jakartans. Offering an array of nightlife, restaurants, fashion bargains (due to a plethora of outlet stores located adjacent to textile factories), golf courses, green tea plantations and nearby hot springs – it is a welcome break from the busy capital.

Perhaps as a result of its comfortable climate and the fertile agricultural conditions of the nearby Parahyangan Mountains, Bandung was developed into something of a resort city during colonial times. Over the years it became famous as the “Paris of Java” with its sumptuous luxury hotels, European restaurants, cafes and boutiques. The tradition continues today.  

Also as a consequence of its popularity with the Dutch, Bandung became the site of the country’s first universities. This included the establishment in 1920 of the precursor to the country’s oldest and most prestigious higher education institution, the Bandung Institute of Technology. Since this time the city has become a national education hub and boasts over 50 higher educational institutions in operation today.

This education focus has fostered the city’s growth as the center of development for Indonesia’s aerospace and aviation sector. To this day Bandung produces aircraft for export and is at the heart of next generation defense technology research and development.  

In addition to being a well-established center for learning, fashion and tourism, following independence the city was the site of the young republic’s most important international diplomatic event – the First Asian-African Conference. Held in 1955, this event was a turning point for the promotion of world peace and opposition to colonialism from developing nations. The rise of nationalist movements around the world that were inspired by this conference changed the map of the world and defined Cold War alignments.

Given the city’s background, it is perhaps not surprising that Ridwan Kamil, Bandung’s mayor, is a UC Berkley educated architect. Prior to being elected, he lectured as a university professor and has worked to bring international ideas, technology and best practice to Indonesia’s most dynamic city.

One key reform issued in by the mayor was simplifying the ease of establishing small- and medium-sized enterprises (SMEs). All registration fees were removed, and the process for applying permits was completely digitalized. According to the mayor, this led to the establishment of 30,000 businesses within six months of the platform being launched.

Technology, innovation and making use of people’s talents has been a hallmark of Mayor Kamil’s policies. “In terms of the economy, Bandung does not have natural resources or energy resources, so human capital resources are our focus, which means I am focused on having a more creative economy in Bandung”, says Mayor Kamil.

“This year I secured US $100 million in investment from UTC, an aerospace production company in the U.S. They are going to be based in Bandung Technopolis”

Ridwan Kamil, Mayor of Bandung

“The creative economy has 13 different sectors and one of the 13 is ICT. I am creating ICT hubs everywhere, much of them hidden, where we have fitted out old buildings with the best technology. They are our so-called ‘guerilla workshops’. Beyond this, one of our flagship projects is the new ICT park, Bandung Technopolis, which is six hectares dedicated solely to technology.”

This approach has brought in real results and attracted foreign direct investment from international sources, attracted by the tradition of technological innovation and strong human resources on offer.

“This year I secured $100 million in investment from UTC, an aerospace production company in the U.S. They are going to be based in Bandung Technopolis. They chose our city because we have world-class engineers that live in Bandung; and beyond that, our population is young; 60% are under 40, and highly educated, as we have 50 universities and research institutes here. Investors can use Bandung to tap into the 50 million middle-class Indonesian consumers, or they can use it like UTC, which does not actually sell into the Indonesian market,” explains the mayor.

The city is in talks with Apple to establish a startup facility. An animation operation, which will employ some 600 locals, will also be opening its doors in Bandung soon. All told, over the last three years more than 50 international institutions have met with the mayor’s office to discuss establishing operations.

To keep pace with the city’s growth, the mayor is pushing a rapid program of infrastructure upgrades. This includes “monorail, LRT (light rail transit), cable car, electric buses, highways and hospitals” to keep up with the needs of 2.4 million residents and some 6 million annual visitors.

These projects will require budget beyond the city’s means and Mayor Kamil has acknowledged the shortfall and implemented a solution.

“We finance 100% (of infrastructure projects) mostly through the central government, which is not nearly enough. For example, my annual budget for development is $300 million. Now, over five years that is $1.5 billion to spend on everything, however my planning team translated my vision for Bandung and it was more or less $6 billion. I am short $4.5 billion, so Bandung either needs to wait for nine mayors to finish the job, or you fund things in a creative way.”
This creative way is public -private partnership (PPP). Bandung has applied the best examples from Europe to get private investors involved.  

As the mayor tells United World, “Bandung is the first city to really push this agenda. I lobbied the President and I said that Bandung needs at least $4 billion, and if you multiply that by the 500 cities in Indonesia, that is $2 trillion for city infrastructure. That number needs to be communicated to the world, we need to invite investors to Indonesia and tell them that besides federal projects there are city projects. So, in Bandung we have set up a PPP center so investors will have an independent unit set up to accommodate the process.”

One point the Mayor Kamil raises is Bandung’s well-known reputation as a tolerant, cosmopolitan place international partners can enjoy visiting and living in.

“Bandung is a model city, it is representative of Indonesia, we have 4,000 mosques, the highest per capita in the country, but we also have bars, clubs and karaoke. We are an open-minded society, so it all works together”