Smart transportation systems boost economic growth

  • 29 May 2024

This article has been translated by PwC Indonesia as part of our Indonesia Infrastructure News Service. PwC Indonesia has not checked the accuracy of, and accepts no responsibility for the content.

Investor Daily - Sistem transportasi cerdas pacu pertumbuhan ekonomi

29 May 2024

By Ichsan Amin

Jakarta, ID – Developing technological innovations in the transportation sector is expected to enhance cost efficiency, reduce travel time, and improve connectivity, thereby boosting economic growth.

High urbanisation rates are increasing economic and social disparities in cities. Imbalanced transportation facilities also negatively impact quality of life. Therefore, efforts must be focused on balancing and improving access to transportation systems that are safe, affordable, and eco-friendly for everyone.

“This can be achieved by taking advantage of technological developments in the transportation sector, such as through smart transportation systems,” Vice President Ma’ruf Amin said when he opened the 19th Intelligent Transportation System (ITS) Asia Pacific Forum 2024 at Jakarta Convention Centre (JCC) in Jakarta on Tuesday (28/5/2024).

Furthermore, the Vice President revealed that in recent years, smart transportation systems have been a focal point of global transportation development. According to him, all countries are currently working on developing more efficient, effective, eco-friendly, and sustainable transportation systems.

“Smart transportation systems are anticipated to address not only the rise in urban mobility but also to alleviate traffic congestion, reduce greenhouse gas emissions, minimise energy consumption, and enhance safety,” he stated.

Furthermore, the Vice President said that developing technological innovations in the transportation sector was expected to enhance cost efficiency, reduce travel time, and improve connectivity, thereby boosting economic growth. Therefore, technological innovations in the transportation have become an urgency.

“The government is currently supporting the development of technological innovations through electric vehicle policies, incentives, as well as other transition programmes,” he stated.

Besides that, the Vice President also revealed that the government was currently integrating smart transportation systems and smart city designs into the development of Nusantara as Indonesia’s new capital.

“Nusantara Capital City is anticipated to serve as a pioneer of cities built upon smart transportation and sustainability, inspiring the development of other similar cities,” he added.

Urbanisation issue

Meanwhile, Transportation Minister Budi Karya Sumadi said that Indonesia shared its experiences at ITS Asia Pacific Forum 2024. According to the Transportation Minister, the forum showcased best practices in implementing smart transportation concepts.

“Smart transportation systems can assist us in addressing challenges related to urbanisation, climate change, and technological advancements. These systems offer efficiency, safety, and sustainability in transporting passengers and goods,” he revealed.

Budi Karya explained that, with the global population growth where the majority live in cities, it was predicted that two-thirds of the global population will reside in urban areas by 2050.

“This poses significant challenges for transportation, including traffic congestion, accidents, logistical delays, and carbon emissions. Smart transportation systems can tackle these issues by leveraging various technologies,” he revealed.

He added that smart transportation systems were expected to tackle issues related to urbanisation, climate change, and technological advancements. “In the end, these systems offer efficiency, safety, and sustainability in transporting passengers and goods,” he stated.

In Indonesia, a smart transportation system has been implemented through the Area Traffic Light Control System (ATCS). ATCS uses information technology to optimises road network performance by coordinating and synchronising traffic lights at intersections.

Several cities in Java, Sumatra, and Bali have implemented ATCS at various intersections. However, the implementation of ATCS is still hindered by traffic input that relies on manual data rather than real-time traffic conditions.

Indonesia Chamber of Commerce and Industry (Kadin) Chairperson Arsyad Rasyid emphasised the need for inclusive cooperation to achieve greener and more connected smart transportation systems in Indonesia.

“We will focus on Jakarta as the starting point before replicating this model in other cities. We require inclusive collaborative efforts from the government, the business world, and the people to realise our shared dream of smarter, greener, and more connected transportation systems in Indonesia and the Asia-Pacific region,” Arsjad Rasjid added.

IKN as pioneer

During the occasion, Transportation Minister Budi Karya also emphasised that Nusantara Capital City (IKN) would be a pioneer of global smart transportation-based cities. The government is planning to establish smart, integrated, and eco-friendly transportation in IKN by leveraging autonomous public transportation.

“Autonomous rail transit (ART), flying taxis, and autonomous buses will be present. The operation of these smart transportation systems will no longer be handled by operators in a conventional manner, but through an implementation of a traffic control system,” he added.

The Transportation Minister added that implementing smart transportation systems in Indonesia aligned with the government's vision of realising a ‘Golden Indonesia’ by 2045. This initiative aims to reduce greenhouse gas emissions and achieve net-zero emissions.

“A more important aspect is the provision of electric vehicles. Will the government collaborate with business entities, including private companies through corporate social responsibility (CSR) initiatives, to supply them?” he added.

ITS Indonesia President William Sabandar said that smart and sustainable transportation concepts were not affected by the rate of technology adoption and the availability and completeness of infrastructure. “Smart transportation is simple, establish its ecosystem. However, an ecosystem can only be established if policies, regulations, and leadership remain consistent,” he revealed.

The government must also create ample opportunities for private companies to participate in the development and sustainability of smart transportation. “Therefore, a regulatory institution is needed to facilitate the industry and the business sector. This institution should establish a robust and consistent system,” he added.

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