NUS Business School: Indonesia's AI edge is its workforce

NUS Business School has positioned Indonesia's so-called "human dividend", rather than raw technology deployment, as the defining variable in the country's ambition to become a globally competitive, high-income economy by 2045. Speaking at a media roundtable in Jakarta, Dr Tan Hong Ming, Assistant Dean for Digital Operations at NUS Business School, argued that AI shifts the logic of economic advantage from workforce scale to workforce capability, with significant implications for how governments and businesses across Southeast Asia allocate their development spending.

Indonesia's macroeconomic backdrop makes the argument striking. The country is home to more than 280 million people, holds the largest digital economy in Southeast Asia (reporting almost US$100 billion in gross merchandise value in 2025, per a Google-commissioned report), and runs roughly 65 million micro, small and medium-sized enterprises that account for around 60 per cent of GDP and 97 per cent of national employment. The strategic question is whether that mass of economic activity can be uplifted by AI augmentation rather than simply automated away.

"For decades the advantage was measured in the size of the workforce," Dr Tan said. "AI changes that equation. A single employee equipped with AI can often accomplish significantly more than before. As a result, productivity is increasingly determined by workforce capability rather than workforce size."

Augmentation over automation

The framing cuts against a strand of AI commentary that treats labour displacement as the primary variable to manage. Dr Tan and NUS Business School Dean Professor Teo Chung Piaw both pressed for what they describe as a redesign of work, rather than a substitution of it. Prof Teo was direct: "Every AI project should have a workforce development plan alongside its technology implementation plan."

The data point anchoring their optimism is notable. Microsoft's 2026 Work Trend Index reportedly classifies 33 per cent of Indonesian professionals as advanced AI users, more than double the global average of 16 per cent. Combined with internet penetration of around 81 per cent and a young entrepreneurial ecosystem, the school argues Indonesia has a structurally better starting position than headline income-per-capita figures might suggest.

Dr Tan outlined three conditions for realising the human dividend: broad AI literacy, leadership capability to redesign workflows, and a culture of continuous learning. The barriers he named are equally instructive, talent shortages, uneven digital infrastructure, and variable AI readiness among smaller businesses remain genuine constraints, particularly outside the major urban centres.

The cross-sector capital question

The Disrupts-relevant read-across here is not primarily pedagogical. It is about where capital and policy attention flow next across the region. Indonesia's National AI Strategy sits alongside the Golden Indonesia Vision 2045 in directing public investment toward healthcare, education, food security and financial inclusion as AI application domains. Each of those sectors carries its own investor landscape: health-tech, agri-tech, and digital financial services are all live deal categories across Southeast Asian venture and private equity markets.

For cross-sector strategists, the NUS argument implies a reweighting. Sovereign and institutional capital flowing into Indonesian AI plays will face a structural constraint if the workforce readiness gap is not closed in parallel. Conversely, businesses and funds that pair technology deployment with organisational capability building, the model Prof Teo describes, may find themselves with a durable moat in a market where pure infrastructure plays are easier to replicate.

The NUS Business School's own capital allocation is modest but directional: an Executive MBA cohort of 55 participants spanning at least 15 nationalities and 15 industries is in Jakarta this week for an overseas learning module, alongside an inaugural Alumni Founders Business Showcase spotlighting Indonesia-Singapore ventures. The school also reports sustained Indonesian enrolment in its MSc in Sustainable and Green Finance and MSc in Strategic Analysis and Innovation programmes, reflecting what it describes as growing interest in the intersection of finance and sustainability amid Indonesia's energy transition ambitions. The institutional bet, in other words, is that the next phase of Southeast Asian growth is defined by leaders who can integrate AI into strategy, not simply deploy it.