Regulating disruptive innovation in Indonesian digital business

Electronic commerce (e-commerce) in Indonesia is growing rapidly. Scholars have estimated that Indonesia will add up to $150 billion to its annual gross domestic product by 2025 because e-commerce continues to evolve as corporations pursue efficiency. Digitalization is expected to boost productivity by introducing practicality, ease of access, convenience, and lower costs. Digital business has also introduced a new sharing economy business model. However, these economic changes have also led to market instability because they have unleashed new sources of supply. Every business faces risks and benefits, and digital technology has brought major disruptions for the past decade. This phenomenon has happened not only in Indonesia but also across the whole world. The authors of this paper employ a qualitative method using descriptive analysis to determine the challenges faced by Indonesian regulators while confronting new technologies or digital business practices that do not fully comply with existing regulatory frameworks. The results obtained from this study examine how regulators have established a new approach and regulatory strategy, which is needed to prevent conflict and disruption of existing business.