“Making Indonesia 4.0” – will Indonesia finally realize the benefits of the 4IR?

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On April 4, 2018, President Joko “Jokowi” Widodo launched the Making Indonesia 4.0 program to help the country better compete in the global market in the digital era, create more jobs and become among the top ten largest economies in the world by 2030.

Five key technologies that support this vision are namely:

  1. Internet of Things
  2. Artificial Intelligence
  3. Human Machine Interface
  4. Robotics and sensor technology
  5. 3D Printing technology.

If successful, the roadmap will boost the real economy of Indonesia by between 1 – 2 percent, facilitating GDP growth rates in the period 2018-2030 to be at least 6-7percent per year. The manufacturing industry is targeted to contribute between 21-26 percent to the nation’s GDP by 2030 and job creation through the roadmap is estimated at 7-19 million by 2030.

The roadmap will focus on developing five manufacturing industries: food and beverage, automotive, electronics, chemicals, and textiles. The contribution of these five sectors to the national gross domestic product (GDP) is currently 17.8%.

Industry Minister Hartarto said it will be key to encourage added value and high-technology downstream industries to become a competitive player in the new global context. The design of the “Making Indonesia 4.0” roadmap involved stakeholders from various segments, including the government, industry players, industry associations, tech companies, as well as research and educational organizations.

The roadmap contains ten steps that the government needs to implement. Among them are: empowering SMEs through digital technology, improving digital infrastructure, attracting foreign investors, changing educational curricula, and providing incentives for businesses based on digital technology.

In the context of ASEAN – Indonesia’s Readiness

A study by A.T. Kearney with Indonesia’s Ministry of Industry showed that Indonesia is currently lagging behind other ASEAN countries like Malaysia and Thailand on their 4IR Country Readiness.

By comparing “Drivers of Production”, country preparedness to capitalize on emerging technologies to transform their production systems and “Structure of Production”, a current baseline of production, Indonesia is slightly ahead of other ASEAN countries like Vietnam.

Thailand was also used as a comparison in demonstrating how the Industry 4.0 adoption has been integrated into the nation’s economic model to develop a value-based economy.

Article first posted on Asia IoT Business Platform on 8th August 2018, written by Yue Yeng Fong