The prevailing development paradigm in many policy circles implicitly assumes that economic actors in lower layers must "graduate" into higher layers---moving from informal or traditional modes of production to formal, digitalized, and AI-integrated systems. This linear and hierarchical assumption often fails in practice, especially in economies with persistent structural fragmentation like Indonesia.
As our observations in Tangerang and other similar ecosystems show, not all micro-actors are in a position to scale up or digitalize in a short timeframe. Moreover, forced transitions can disrupt existing social and economic ties, create technological debt, and erode organic market linkages that are locally resilient.
Policy Proposition: Adaptive Interconnection Framework
We propose a shift from the ideology of "upgrade or perish" to a model of adaptive interconnection, in which each economic layer (1 through 4) is enabled to interact symbiotically with others, without necessarily transforming its structural identity. This policy approach acknowledges the plurality of economic rationalities, production logics, and organizational forms.
Key Principles of the Approach:
1. Pluralist Legitimacy
All economic forms---traditional stalls, informal factories, online gig work, and AI-driven platforms---are recognized as legitimate contributors to the economy. Policy should not prioritize formality over functionality.
2. Interoperable Systems
Instead of enforcing digital literacy or QRIS usage as a precondition, systems can be designed to interoperate through mediating agents, such as trusted intermediaries, cooperatives, or hybrid platforms.
Example: A micro-distributor app that allows Layer 1 or 2 actors to plug into Layer 3 marketplaces via a proxy account or group representative.
3. Soft Interfaces, Not Hard Requirements
Policy should create soft interfaces that allow micro-actors to partially connect---e.g., enabling QRIS payments without full bank onboarding, or using voice-based AI for order placement by low-literacy actors.
4. Reverse Flow of Value
Higher-layer systems (e.g., Layer 4 AI economies) should be encouraged or incentivized to build backward linkages---sourcing inputs from traditional producers, investing in informal sectors, or integrating alternative credit scoring for small-scale actors.
Implementation Channels:
Regulatory Sandboxes for Mixed-Economy Systems
Establish zones where Layer 1--4 actors can co-exist and experiment with interconnectivity solutions under relaxed regulatory frameworks.
Data Dignity Platforms
Develop mechanisms where informal actors can voluntarily share data (e.g., transaction histories, production volumes) through trusted third parties, enabling visibility without full formalization.
Fiscal Incentives for Interlayer Cooperation
Offer tax breaks, grants, or soft loans to businesses or startups that design models intentionally bridging Layers 1--2 with Layers 3--4.
Interlayer Incubation Hubs
Public-private partnerships to create local hubs that foster co-presence and co-production between economic actors from different layers, building trust and technical affordances in context.
Outcomes Expected:
Increased transactionality across economic layers without forcing identity shifts.
Expanded labor absorption, especially in layers 1 and 2, through indirect digital integration.
Market broadening as traditional producers reach digital consumers via intermediated systems.
Improved inclusivity of national AI and fintech ecosystems, which currently miss large swaths of productive actors.
B. Context-Based Mechanisms for Technology and Policy Distribution
