September 25, 2020

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Indonesia to cooperate with Taiwan for Industry 4.0

In its effort to continuously support the development of technology in the industrial sector, Indonesia’s Ministry of Industry is establishing the Digital Capability Centre (DCC).

According to a recent press release, the digital capability centre will be built as part of the implementation of the Making Indonesia 4.0 roadmap, which aims to increase the productivity and competitiveness of the manufacturing sector in the era of Industry 4.0.

Digital Capability Centre

Minister of Industry Airlangga Hartarto shared that the plan for the centre is being conceptualised. They are working with a multinational management consulting firm to achieve a centre that will be developing domestic devices, networks, and applications.

Aside from the consulting firm, the Ministry will be collaborating with Taiwan’s Industrial Technology Research Institute (ITRI), which is a technology research and development institution, for the centre.

The Minister explained that Indonesia’s DCC will be similar to the DCC that already exists in Singapore.

The Centre will be utilised by the industry player that have not yet implemented digitalisation, particularly by the small and medium industries.

The Ministry believes that the leveraging on digital economy will create new opportunities for all.

More skilled-workers required

He mentioned a research, done by the consulting firm and a multinational professional services network, wherein digital economics will be able to increase the value of the national Gross Domestic Product (GDP) by US$ 150 billion in the year 2025.

Additionally, Indonesia will be requiring as much as 17 million technology-skilled workers by 2025. These skills will be much different from what they are currently equipped with.

The manufacturing sector will be expecting 4.5 million people while the remaining 12.5 million workers will be spread across other sectors of the industry support services.

Addressing this need has become the Government’s priority.

Targeting international investments

Aside from the work related with the DCC, the Ministry of Industry is looking for new industrial investments from Taiwan.

The Indonesian government will be providing tax holidays and other facilities to entice potential investors.

Hopefully, investors will go into sectors that will provide many job opportunities for Indonesians as well as increase the country’s trade through imports and exports.

The government wishes to provide profitability to the investors in order to encourage them to do their business in the country.

Working with Taiwan

Negotiations with Taiwan had begun since last year. The country had been exploring opportunities for cooperation with Indonesia, particularly in the manufacturing sector.

Potential sectors that the countries are looking into include shipping, metal processing, food technology, and ICT and smart city industries.

This cooperation will strengthen the economies of the two countries.

Some additional information about the two countries in 2017:

  1. The total trade between Indonesia and Taiwan reached US$ 7.4 billion
  2. Taiwan was ranked as Indonesia’s 11th global trade and import partner
  3. Indonesia’s direct investment in Taiwan amounted to US$ 32.2 billion
  4. Taiwan’s direct investment in Indonesia reached US$ 397 million, making it the 14th largest investor in the country