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The dream of Algorithm hill

Tempo - April 21, 2021

Jakarta – Recreating Silicon Valley is not as easy as turning the back of one's hand. Without a solid ecosystem in place, the Algorithm Hill project in Sukabumi, West Java, could well be mere business cunning out to grab tax deductions and import duty waivers while establishing a special economic zone.

In the digital world, the gods are the algorithm. They decide the news that we read and the ads that appear on our cell phone screens. The algorithm selects which products we buy online and the amount of credit we may withdraw from our digital bank accounts. The almighty algorithm is a series of mathematical calculations that predicts our behaviour based on data. This could be what incited politician from the Indonesian Democratic Party of Struggle (PDI-P), Budiman Sudjatmiko, and his business cohort, Danny Handoko, to establish a center for research and technology development in Sukabumi, West Javam they dubbed Bukit Algoritma, or Algorithm Hill.

Though touting a grand name colored scientific nuance, the project very early on in its installment has raised several large queries. One is the declaration by the instigators to create an Indonesian version of Silicon Valley on an 888-hectare plot of hilly property, prior managed as a tourist hunting area called the Cikidang Resort. Budiman claimed to have corralled investments from several countries to the tune of Rp18 trillion.

Such a claim, particularly one that only recently submitted a request for permits to build a special economic zone (SEZ), obviously has to be looked into very carefully. It would not sit well if decision-makers, also investors, become ensnared in what could later turn out to be a pipe dream. Moreover, tax deductions and import duty waivers are significant for business entities dealing in special economic zones. According to Government Regulation No. 12/2020 on facilities and waivers in special economic zones, other special treatment for SEZ entities go beyond taxation and import duties.

The regulation contains clauses that accommodate ease in matters regarding permits, goods shipments, and workforce permits. The SEZ scheme was designed by the government to lure investors to inject large amounts of capital into the country. The government would do well to look closely at each phase of establishing a SEZ. We should not allow the ambitious project to turn out to be mere candyfloss.

A flurry of negative reactions on social media began after the Algorithm Hill project was launched. Everybody knows that the original Silicon Valley was not created in one night. The zone which now houses some 2,000 hi-tech companies south of San Francisco, California, in the United States of America, was begun in the 1930s. One of its prime moverswas Frederick Terman, a professor of engineering from Stanford University, instrumental in encouraging his students and graduates to open business entities in the valley.

Two Stanford graduates, William Hewlett and Dave Packard, established the Hewlett-Packard computer company, followed by other alumni, including William Shockley, who founded the Shockley Semiconductor Labs which produces computer processors. Not long after, Silicon Valley developed rapidly. In the 1970s, companies such as Atari, Apple, and Oracle appeared, later followed by eBay, Yahoo!, PayPal, and Google. In the 1990s, the digital giants Facebook, Twitter, Uber, and Tesla, came on board in the valley measuring 121 square kilometers. These Silicon Valley entities together forged an economy amounting to a total worth of some US$3 trillion, almost three times the entire economy of Indonesia.

The advantage of Silicon Valley, which would be difficult to replicate in Algorithm Hill, is the presence of established ecosystem. In the vicinity already stood Stanford University, which for decades had been offering above average quality of education, also a number of investment firms that continue to pour in millions of dollars into startup companies. The valley boasts a network of interconnected companies dealing in hi-tech bolstered by slew of laws and regulations that encourage innovation and competition. Infrastructure that instigates the founding of new technologies in Silicon Valley are not toll roads, rail-lines, airports, nor buildings, but non-tangible technological and financial structures based on a culture of invention.

Before the controversy erupted surrounding the Algorithm Hill, too often have we heard about similar pipe dreams from out elite. Our politicians very quickly fall in love with jargon regarding technology and digitalization. They jumped on the bandwagon touting the likes of the Indonesia 2.0 concept and digital transformation, but tend to be too impatient to plant the seeds needed through long-term investment to establish a bedrock research and education ecosystem. Moreover, the Algorithm Hill project will probably not be the last one, either, to carry this dismal copycat tendency.

Read the Complete Story in Tempo English Magazine: https://magz.tempo.co/read/37790/the-dream-of-algorithm-hill

Source: https://en.tempo.co/read/1454898/the-dream-of-algorithm-hil