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Indonesia May Become Asean Manufacturing Hub by Embracing Fourth Industrial Revolution

Monday, 29th of October 2018

Indonesia has tremendous potential to become the leading manufacturing hub in Southeast Asia if it fully embraces the fourth industrial revolution to optimize productivity, according to a joint report by the World Economic Forum and global research firm A.T. Kearney, published in September.

The report titled "Shaping Asean's Future Readiness Collaborations to Advance Manufacturing and Production" shows that Indonesia is currently in the "nascent," or third, stage of adoption of the fourth industrial revolution – the same level as Vietnam and Cambodia.

Artificial intelligence is a major part of the fourth industrial revolution. Through automation and data enhancement, AI should make people's tasks easier.

"If we look at Indonesia, even though it is still at the nascent stage of artificial intelligence adoption, the growth has been quite significant in recent years and that is because technology startups have primarily driven it," A.T. Kearney partner, Shirley Dhewayani Santoso, told the Jakarta Globe.

At least a quarter of Indonesian technology companies are adopting AI, with the country leading the pack in the region, according to a 2017 survey by global market intelligence firm IDC.

The survey polled 502 information technology executives across the Asia-Pacific region, except Japan. Trailing Indonesia was Thailand (17.1 percent) and Singapore (9.9 percent).

Shirley said tech startups, such as Indonesian ride-hailing firm Go-Jek, web forum Kaskus, e-commerce platform Tokopedia and most fintech players, are actively adopting AI.

"We see that many startups [in Indonesia] are already embracing AI, but many more traditional companies, such as those in manufacturing, have yet to do so," she said.

Shirley said the adoption of AI in Indonesia would still take time, especially among more traditional companies.

"We don't feel that AI will necessarily replace jobs; what we see is that AI will actually provide a lot of value to companies, but we must make sure the adoption can be accelerated," she said.

Shirley said companies must ensure that they prepare their human resources to embrace AI by giving them an understanding of how the technology will benefit the company.

Source: Jakarta Globe. https://jakartaglobe.id/business/indonesia-may-become-asean-manufacturing-hub-by-embracing-fourth-industrial-revolution/ (07-11-2018)

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