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Indonesia is taking a more methodical approach to the procurement, governance, and use of Earth observation data into public decision-making. Indonesia’s decisions are starting to influence not only its own space ecosystem but also new regional standards as the demand for Earth Observation (EO) data in Southeast Asia moves from ad hoc use to institutionalised uses, ranging from maritime monitoring to disaster management and land administration. Since they dictate who can enter the market, under what circumstances, and with what long-term incentives, these governance and procurement decisions are significant today. Indonesia’s strategy provides early indications of potential access routes, collaboration arrangements, and regulatory expectations in ASEAN’s largest space market for European space actors, such as government agencies and downstream service providers. This Insight looks at Indonesia’s EO governance and procurement decisions from an institutional and policy standpoint, emphasizing their wider ramifications for European engagement above technical prowess or specific initiatives.
Indonesia’s Earth Observation Landscape
The level of reliance on Earth observation (EO) data in Indonesia is mainly influenced by geographical and governance-related factors rather than the ambitions of the space industry. This is because Indonesia, being the largest archipelagic state, has been and still faces various challenges, especially in the management of disaster risks, the environment, and the management of the maritime domain. In this regard, Earth observation data has become an increasingly important input to civilian public authorities. Demand for EO products in Indonesia is largely driven by the public sector and is application-oriented in nature. Agencies in the country use satellite imagery for monitoring floods, forest cover and fires, coastal areas, and illegal activities over vast and mostly inaccessible territories. For example, Indonesia’s maritime authorities increasingly rely on EO-supported monitoring to detect illegal fishing and unregulated vessel activity across remote archipelagic waters, where traditional enforcement capacity is limited. This is different from the demand patterns in the space economies of other industrialised countries, where the demand for EO products is largely driven by the needs for capability development in the sector itself.
From an institutional point of view, the use of EO in Indonesia brings into play several different civilian actors, all of which have overlapping competences. As such, several different ministries and actors can be seen as data users, procurers, and coordinators. It is in this context of increasing complexity that the question of access, standardisation, and procurement becomes ever more important. While Indonesia, of course, has long been involved in space-based data access through its international and foreign-based partners, the increasing level of institutionalisation in the use of EO in Indonesia is now bringing the question of governance and procurement to the foreground. This, in essence, creates the context in which the current governance of EO in Indonesia can be understood.
Governance Model: Centralisation versus Distributed Demand
Indonesia’s model of Earth observation governance reflects a hybrid model of institutional arrangement that is positioned between the extremes of central coordination and sectoral autonomy. Thus, unlike the extremes of centralising the access to EO services and procurement of EO systems within a single entity, the Indonesian model brings together a central space institution of the civilians along with a multitude of sectoral ministries and agencies that act as autonomous users of EO services.
In practice, the core space institution takes the form of a coordinating and enabling role, which includes policy alignment, infrastructure provision, and international engagement. At the same time, the sectoral actors involved in disaster management, environmental monitoring, land management, and maritime affairs have a high degree of freedom to define their EO requirements and procure EO based on these requirements. This reflects the nature of Indonesia’s demand profile as an applied rather than a capability-driven one, where the use of EO is primarily driven by operational public sector requirements rather than capability development.
The result is a system in which standardisation and autonomy exist in a contradictory relationship. In the case where the promotion of standardisation and the use of common data infrastructures is concerned, the sectoral ministries are still concerned about the responsiveness to their unique mandates, even as the use of EO is aligned with the policy domains in a way that limits the extent to which the procurement systems can be harmonised.
From the point of view of governance, there are considerable implications of this hybrid model. Coordination now relies on the alignment of institutions among different actors, rather than on hierarchical control, and thus informal coordination and inter-agency cooperation are enhanced. As EO usage becomes more institutionalised, the balance between coordination and autonomy will be critical in determining the predictability of procurement and the openness of Indonesia’s EO ecosystem to external actors.
Procurement Logic: How Governance Choices Shape Market Incentives
At a sectoral level, operational needs often take precedence over a broader national-level approach to capability development. Ministries and agencies involved in disaster response, environmental monitoring, land management, and maritime affairs, among others, are likely to focus on solutions that can be quickly integrated into their current operations. Disaster-response agencies, for instance, often prioritise providers able to deliver near-real-time flood mapping products that integrate directly into emergency coordination workflows. This leads to a pragmatic acceptance of a variety of procurement options, depending on the application and operational needs.
At the same time, procurement needs are subject to a delicate balancing act between a variety of competing factors. Cost factors are certainly an issue, especially for organizations that have a fixed public purse, but are unlikely to be a decisive factor on their own. Reliability and continuity are likely to become key issues, given the operational reliance on timely and accurate EO data for a wide range of public operations. Sovereignty issues are also likely to become a concern, especially where EO results are a key element of operational policy and regulation. Partnerships are likely to be an attractive option, not just for operational reasons but also for minimising coordination issues between organisations.
Importantly, the effects of this procurement environment are not neutral. By allowing sectoral actors significant discretion in how EO services are sourced, Indonesia’s governance model encourages a fragmented demand structure that favours flexible, application-driven solutions over standardised, centrally aggregated procurement. This limits the emergence of uniform access conditions and decreases predictability for market participants, even though it can improve responsiveness and sectoral effectiveness. These factors gradually determine which suppliers can interact with Indonesia’s EO ecosystem in a sustainable manner and under what conditions.
Regional Signalling: Indonesia as a Reference Model within ASEAN
Further, Indonesia’s EO governance choices are also noteworthy for their implications outside national boundaries, especially given its status as the largest and most active public sector EO user within ASEAN. Although no formal policy harmonisation occurs within ASEAN, especially within the space domain, national-level policies implemented by its largest and/or most advanced members are often implicitly expected to serve as a standard for others dealing with analogous issues.
In this regard, Indonesia’s hybrid approach to EO governance can be interpreted as a subtle signal to its regional peers, especially given its pragmatic balance between coordination and sectoral freedom, which is likely an accurate reflection of public sector EO use reality. To this end, Indonesia’s experience can be interpreted as a valuable lesson for ASEAN member states that are still developing and/or expanding their EO needs, and which are weighing the merits and trade-offs between permitting sectoral ministries a measure of freedom in public procurement while still pursuing a measure of standardisation through central coordination.
This signalling effect is especially significant for member states that are still in the process of institutionalising EO use, but which lack either the administrative capabilities and/or political will required for a fully centralised approach. To this end, Indonesia’s experience can be interpreted as a signal that a measure of incremental institutionalisation, focusing on coordination mechanisms rather than consolidation, is a potentially more viable option for member states still grappling with EO use and its implications.
At the same time, the limitations and drawbacks inherent within Indonesia’s hybrid approach are likely to be carefully monitored and studied within regional policy circles, especially given its implications for public procurement and demand fragmentation.
Ultimately, this dynamic can lead to a measure of partial convergence between ASEAN member states, not through any formal policy alignment, but through a process of emulation and adaptation. Consequently, Indonesia’s EO governance choices play a significant role in shaping regional-level discourse on EO use, procurement, and access, and thus reinforce its status as an agenda-setting actor within the evolving space landscape within ASEAN.
Implications for European Space Actors
Indonesia’s developing approach to EO governance has a range of implications for European space actors looking to engage with the largest and most important Earth observation market in Southeast Asia.
First, the hybrid model adopted by Indonesia underlines the significance of governance literacy as a complement to technical capacity. Access to the market is determined by a variety of sectoral actors, rather than a single procurement authority, working together in an institutional framework that is loosely coordinated. For European actors, this underlines the importance of understanding sectoral structures and institutional decision-making processes, rather than simply seeking entry into a single, centrally determined framework.
Second, the procurement approach adopted by Indonesia underlines the opportunities and challenges that exist for EO service providers. The emphasis on service reliability, continuity, and application readiness underlines the advantages enjoyed by actors that are able to offer flexible, downstream-oriented solutions that are easily integrated into existing public sector workflows. At the same time, the fragmented nature of the market and lack of standardisation make the overall procurement process inherently unpredictable, creating transactional costs that favour partnership over market access.
Finally, the regional signalling effect of the EO governance model adopted by Indonesia underlines the likelihood that similar trends and challenges could emerge in other ASEAN countries. As other ASEAN members develop institutional capacity in EO, European actors are likely to encounter a similar model of EO governance, balancing coordination and sectoral autonomy, rather than a centralised model. The initial strategies adopted in Indonesia could potentially serve as a model for developing regional interaction strategies.
For European public institutions and programs, including those focused on downstream applications and capacity development, the experience in Indonesia underlines the importance of developing engagement strategies that prioritise interoperability, coordination, and long-term partnership over capability transfer. As the ASEAN Earth observation ecosystem develops further, the experience in Indonesia underlines the value of the EO governance model as an initial indicator of the opportunities that exist for European actors looking to engage in developing space markets.
What to Watch: Indonesia’s EO Governance Trajectory
The Indonesian approach to EO governance is still in its formative stages, and its long-term trajectory has yet to be determined. As EO use becomes more deeply ingrained in public administration, the balance between central coordination and sectoral autonomy will likely shift, with important implications for procurement predictability and market access.
Several factors will be of particular interest as they evolve, including changes in institutional mandates or coordination, which may indicate a shift toward more central oversight or improved cross-sectoral alignment. Similarly, changes to procurement approaches, such as the adoption of common standards or shared procurement approaches, may indicate a shift toward greater procurement predictability, while continued reliance on sector-specific procurement approaches may indicate ongoing demand fragmentation.
For European stakeholders, the Indonesian approach to EO governance represents an early example of what the emerging space markets in Southeast Asia may look like in the future. Ongoing attention to these institutional and procurement trends will be critical for informing future engagement conditions in the Southeast Asia region.
Considering the entire Indonesian approach to EO, there are indications that the entire Southeast Asian region is moving from a capability-centric approach to space development to a governance-centric, access-centric approach. For European actors in the European space industry, the engagement strategies are most likely to impact not only access to the Indonesian market, but also positioning in the entire ASEAN region.
Sources and References (Indicative)
- Public sector policy materials developed by the Indonesian civil space sector institutions
- ASEAN Secretariat publications on regional coordination and capacity development
- European Union Copernicus Programme documentation on public sector Earth observation applications
- European Space Agency publications on Earth observation services and global cooperation
- Reports by multiple actors on issues of Earth observation application in disaster management and environment governance