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Towards Industry 4.0: Indonesia’s Ambitious Digital Transformation

The Asia-Pacific region has been leading the way in the adoption of digital payments which are expected to cross a trillion dollars in the next few years. This growth is driven by factors such as the increasing popularity of e-commerce, the rise of mobile and digital banking and government initiatives to promote cashless economies.

Indonesia is no different and is eager to drive national development with technology. Its digital transformation ambitions include driving transformational tech projects and empowering entrepreneurs to embark on their innovation journeys. The aim is to help both the country and industry to remain relevant, resilient and agile in an increasingly digital, albeit, VUCA environment.

According to Forrester’s study in 2021, just under half of companies in Indonesia are presently engaged in implementing or expanding their digital transformation. About a third are embarking on their digital strategies and intend to begin their transformation by the conclusion of 2021.

The Indonesian Ministry of Communications and Informatics released a “Digital Roadmap” for 2021-2024 as a strategic blueprint for the nation’s digital transformation. The plan provides a framework and phases to achieve equal economic development based on innovation, digital connectivity and technology. The roadmap is being executed across four key domains: Digital Society, Digital Infrastructure, Digital Economy, and Digital Administration.

By 2030, Indonesia plans to have one of the world’s ten largest economies. The country has prioritised the Making Indonesia 4.0 project to help achieve this aim and increase the industry’s contribution to gross domestic product (GDP). It’s a comprehensive plan for preparing the country’s initiative for the industry’s information technology revolution.

Coordinating Minister for the Economy, Airlangga Hartarto, predicted that “Making Indonesia 4.0” would increase GDP growth by 1% to 2% annually between 2018 and 2030, leading to the creation of more than 10 million new jobs and increasing the manufacturing sector’s contribution to more than 25% in 2030.

The country is keen to develop domestically but is as eager to attract foreign investors by positioning itself as a regional digital hub. It has been showcasing its progress and opportunities for international companies to establish a presence in the country.

Recently, the government invited 41 national enterprises in the Metal, Machinery, Transportation Equipment, and Electronics (ILMATE) sector to an international event to promote the attainment of Making Indonesia 4.0.

Indonesia’s presence at the world’s largest trade fair for industry demonstrated the country’s significant advancement towards transitioning its nation into the digital age and its efforts to become Indonesia 4.0. With abundant resources and a stable political and economic environment, Indonesia is an attractive investment destination for both Singaporean and global investors.

At the event, the Ministry of Communication and Informatics promoted four startup companies through Venture Capital Engagement. Bonifasius Wahyu Pudjianto Director of Informatics Empowerment, Directorate General of Informatics Applications, Ministry of Communication and Informatics is optimistic that the young company can enter international markets.

Director General of Metal, Machinery, Transportation Equipment, and Electronics (ILMATE) of the Ministry of Industry, Taufiek Bawazier, was quoted as saying, “We can offer insights from industries that have successfully implemented Technology 4.0 to provide valuable lessons in digital transformation for all stakeholders in the industry 4.0 implementation context.”

Indonesia’s presence at the world’s largest trade fair for industry demonstrated the country’s significant advancement towards transitioning its nation into the digital age and its efforts to become Indonesia 4.0. With abundant resources and a stable political and economic environment, Indonesia is an attractive investment destination for both Singaporean and global investors.

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