While traditional economic development theory assumes a progressive evolution from informal to formal, or from manual to digital, Indonesia defies this teleology. Its economic architecture can be seen as comprising four distinct layers:
1. Layer 1 -- Traditional Economy: Characterized by cash-based transactions, informal labor arrangements, and physical selling spaces such as roadside stalls, tarp-based markets, and itinerant vendors.
2. Layer 2 -- Industrial-Modern Economy: Consists of factories, offices, and banking institutions---often formalized but not necessarily digitized.
3. Layer 3 -- Digital Platform Economy: Driven by cashless systems, online marketplaces, and app-based logistics and services such as ride-hailing or e-commerce.
4. Layer 4 -- AI-Augmented Economy: Emerging economic activities enabled by artificial intelligence, algorithmic finance, and predictive market behavior---typically accessed only by tech-integrated firms or startup ecosystems.
What makes Indonesia unique is that these layers do not form a neat hierarchy, nor do they always converge over time. Instead, they often remain fragmented horizontally, with limited interoperability across platforms, regulations, and social networks. Moreover, movement between layers is not always desirable or beneficial. A traditional food vendor, for instance, might earn more and experience greater autonomy in Layer 1 than by prematurely transitioning into a digital system that imposes fees, rating pressures, and new risks.
This layered model challenges both policy orthodoxy and digital utopianism. The Indonesian case reveals that economic "upgrading" is not simply about digitization or formalization, but about preserving the productive diversity of each layer while enhancing their interconnectivity without assimilation. More importantly, it raises urgent questions regarding:
Labor absorption and wage sufficiency in each layer.
The visibility of economic actors to state and algorithmic systems.
The risk of algorithmic exclusion, where productive units remain disconnected from platforms that allocate credit, logistics, and attention.
In this context, the Indonesian economy emerges as a living laboratory for understanding layered economic resilience, asymmetric transitions, and the political economy of digital marginality. It calls for an updated theoretical lens---one that respects complexity, multiplicity, and partial integration---not merely linear development.
This paper proposes a conceptual model of the "4-Layer Asymmetric Economy", rooted in this empirical and theoretical tension. It aims to articulate a framework that can serve both as an analytical tool and a developmental vision---where inter-layer interaction is nurtured, not forced; and where visibility, viability, and value are extended to all layers without demanding homogenization.
B. The Paradox of Economic Digitalization: Reinforcing, Not Bridging, Fragmentation
Digitalization is often celebrated as a democratizing force in the economy---promising inclusion, efficiency, and upward mobility. However, in the Indonesian context, the expansion of digital platforms and AI-based systems has not uniformly bridged economic gaps; rather, it has often exacerbated stratification, creating new barriers of access and visibility while reifying older ones. This paradox challenges the dominant policy narrative that assumes technological adoption as an inherently equalizing mechanism.
The irony lies in the selective permeability of digital infrastructure. While QRIS, digital wallets, ride-hailing apps, and online marketplaces have penetrated urban and semi-urban consumer behavior, they remain unevenly adopted across labor-intensive micro-enterprises, small-scale manufacturers, and informal distributors. In many cases, actors in Layer 1 and Layer 2---those engaged in cash-based trade or semi-formal production---lack not only digital literacy or access to smartphones, but also the institutional support and design flexibility to integrate with digital platforms without compromising their autonomy or income.
Moreover, the algorithmic design of digital platforms tends to privilege actors with predictable behavior, verified documentation, and scalable logistics---features that are often absent in informal or locally embedded economic practices. This results in a form of "algorithmic invisibility": productive units that are economically active but digitally unrecognizable. In essence, digitalization creates new fault lines, where inclusion becomes conditional on compatibility with system expectations, not intrinsic economic value.
At the same time, digital transformation in Indonesia has triggered what may be called "platform-induced economic segmentation." Instead of dissolving boundaries between layers, platforms like online marketplaces or app-based delivery systems often reinforce them by:
Filtering users through digital KYC (Know Your Customer) or platform ratings.
Concentrating visibility and rewards on actors already familiar with e-commerce norms.
Embedding feedback loops that marginalize low-frequency or irregular producers and vendors.
This platform logic mirrors broader dynamics of data capitalism, where economic relevance is mediated through data traces, and those who fail to generate data---or the right kind of data---remain excluded from algorithmic recognition and credit scoring.
