Business Environment

Japan-Indonesia Relations from the Perspective of Offshore Development

オフショア開発から見た日本とインドネシアの関係

Offshore Development in Indonesia

Offshore means "an area far away from the coast of the country or mainland".

Speaking of offshore development, China is probably the main country with the same Chinese character culture and Japanese speaking IT manpower, but it seems that the merit of cost reduction is becoming less and less due to the sharp rise in labor cost in recent years.

Indonesia is in the same situation, but the same thing is happening in the process of developing emerging countries.

However, according to my friend who has experienced offshore work in India, "The work is not good enough, so you have to start over by yourself.

In the past, the boss of the financial system company where I was dispatched to was a very good Indian salesman who had the momentum to sell out even a broken washing machine as a bucket.

From an ethnic point of view, compared to working with Indians in India, Indonesia may be a paradise.

Jakarta, Indonesia has also been attracting attention as a base for offshore development in recent years, but it is mainly for mobile applications such as Android and iPhone applications, or web development.

Indonesia is the kingdom of smart phones, so it is understandable that there are a lot of engineers in this field, and for Indonesians who like flashy and cool things, being a smart phone engineer is a dream job.

On the other hand, we don't hear much about the offshore development of client-server type business systems, because it is difficult to outsource the development because there is a large number of communication with the Japanese side during the development period.

The success or failure of offshore development in Indonesia depends on the existence of bridge SEs who can break down Japanese specifications into Indonesian developers, and the coordination ability of Indonesian engineers to develop according to the specifications based on requirement definition.

It would be best if there are Indonesian engineers who are fluent in Japanese and have knowledge of technology, but such people are rare, and those who are that good are running their own businesses.

I think it would be great if we could train people who are not good enough to start a business on their own, but who can either speak Japanese or have IT skills as bridge SEs, so that they can literally build a bridge between Japan and Indonesia.

The day that Japan and Indonesia will be reversed

However, there is a shortage of resources to meet the demand for web and mobile development in Indonesia, so a business to train Indonesian IT engineers is a win-win situation for both India and Japan.

In 2012, Japan ranked 4th in the world in terms of nominal GDP, and Indonesia ranked 16th, but it is said that by 2030, these rankings will be reversed.

When this happens, there is a good chance that the current situation of Japanese companies developing offshore in Indonesia will be reversed.

The basic idea of offshore development is to reduce the cost of development in a country with low labor cost, so there are already cases where the salaries of engineers in Jakarta are higher than those of Japanese companies during the deflationary period.

In 2014, Japan ranked fourth in Asia in terms of GDP per capita, behind Singapore, Hong Kong and Brunei, and I think Japan will continue to be impoverished in the future.

When we frequently see articles in newspapers and magazines that stir up a sense of crisis, such as "Japan is in danger," we sometimes feel uneasy about the future of Japan, but I don't think there is any need to be concerned about Japan's ranking just from the perspective of GDP flow.

Rather, I believe that the ideal coexistence and co-prosperity between Japan and India is the development of businesses that link Japan's accumulated assets and technological capabilities to the improvement of Indonesia's young working population.

Well, it is unknown whether Indonesia will necessarily think that "Japan is the best partner" or not.

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