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Tech, HR development to spur growth in Indonesia’s industrial sector
Indonesia state-owned surveyor firm ramps up digital transformation
The Ministry of Health is looking at integrating the Internet of Things (IoT) technology that can be utilised to store COVID-19 vaccines more efficiently. According to a statement, the Ministry expressed interest in applying the technology and processes that pharmaceutical companies have been using to preserve and gather data on vaccines. These include the Vaccine Distribution Management System (SMDV) put up by state-owned firm Bio Farma.
The system applies a 2-D data matrix in vaccine packages. This matrix allows the manufacturer to ensure product identification, traceability and authentication. Because vaccines are sensitive to changes in temperature, the SMDV programme integrates temperature sensors using IoT technology in order to keep track of vaccine temperature real-time.
The SMDV allows improved monitoring of vaccine temperatures. Once implemented, the system can be integrated with other programmes within the company’s premises. Data gathered can also be sent to the Health Ministry’s Command Center.
The Center, which shall be equipped with an IoT dashboard, can then be used to monitor the delivery and storage of vaccines, as well as other conditions that may occur during transit, like dropping of temperature. This IoT dashboard comes equipped with global positioning technology (GPS) that allows location tracking of vaccines during shipment.
In a visit to the Command Center with other government officials, Minister of Health Budi Gunadi Sadikin said that they are looking forward to applying the SMDV technology. He added: “We hope that this SMDV can be digitally integrated with the existing system in the Ministry of Health, and can be applied to services [and] health facilities throughout Indonesia.”
According to Soleh Ayubi, Director of Digital Healthcare at Bio Farma, the new technology can be harnessed to preserve the quality of vaccines and allow for better monitoring. The Director added that once temperatures drop beyond specified limits, the system would be able to notify authorities at the Command Center. These authorities could then contact drivers of vehicles transporting vaccines and give them instructions.
Aside from strict tracking of vaccine shipments, the Ministry’s Command Center can likewise record the time of delivery and total orders of vaccines. Ratios of shipment, delivery maps and other necessary details are also reflected in the IoT dashboard.
Data gathered through the digital system can be used for decision-making processes to ensure the quality of vaccines and their seamless and quick dispatch.
The Director also said that the system will first be used in vaccine distribution. The statement comes after Bio Farma announced that it has begun distributing Sinovac, a variant of the COVID-19 vaccine to various health facilities in 34 provinces. Storage facilities for these vaccines were also reported to have been prepared.
Indonesia, the fourth most populous country in the world, earlier reported that it has received the second tranche of COVID-19 vaccines from manufacturer Sinovac. This comes as the government ramps up its programme for a free vaccination. Health workers are first in line to receive vaccines, while authorities said the entire programme is expected to be completed within 12 months.
The government is also set to receive a fresh batch of 50 million doses of COVID-19 vaccines from manufacturers AstraZeneca and Pfizer.
The healthcare sector is one of the industries that the Indonesian government is striving to improve through the adoption of digital technology. In a report by OpenGov Asia, the government announced that several startups are receiving support from the government as part of initiatives to accelerate digital transformation. The latest Micro, Small and Medium Enterprise to receive financial assistance is a firm that has developed an innovative health application. This app offers contactless thermal screening that is fully integrated into an on-device artificial intelligence system.
More government agencies in Indonesia are basing their strategies with digitalisation in a bid to scale up existing programmes and provide enhanced services to the public. This year, the Ministry of Communication and Information Technology announced that it is focusing on frequency spectrum management to boost its services. The Ministry explained that this initiative is part of efforts to accelerate digital transformation not just within the department but in various sectors in the country as well.
According to Dr Ir. Ismail, the Ministry’s Director General of Resources and Equipment of Post and Information Technology, innovations in spectrum management are essential units that can help drive digital transformation. During a recent virtual meeting, he said: “[T]his frequency spectrum management is one of the backbones of national digital connectivity via mobile broadband.”
The Director General added that meticulous regulation by the government of frequency spectrums is a key step in amplifying innovative solutions. Frequency allocations must be done carefully and allotted to corporations based on their needs. Elaborating, he confirmed that the agency has adjusted frequencies during the past two years. Their basis for frequency allocation is the type of technology a frequency lessee is using. This way, the agency can be assured that the amount of frequency given to such a corporation will be the right fit based on its needs.
The aggressive initiative to adopt this new technology is reinforced by the multiple benefits that the government will reap once this innovation has been adopted. The Director General explained that “the presence of new technologies such as 5G is also a factor that encourages the agency to regulate frequency appropriately. So that, in the future, people all over the world can use quality telecommunication networks in their activities”.
He added that initiatives toward innovation have positive impacts in all sectors of the economy and the society in general. He said that technology can usher in more productive activities once they have been implemented. One of these activities is the development of Indonesia’s digital economy. When a 5G telecommunication network is adopted, the nation can improve its business and investment climate. The Indonesian government has been scaling up efforts in the past years to boost and roll out 5G technology in the country by tapping into its existing band and wave spectrum. The government has also announced that it has started its bidding for 5G internet services last year.
Apart from plans to integrate 5G technology, several key innovations have since been launched in Indonesia following government-led initiatives to adhere to digitalisation and the Making Indonesia 4.0 blueprint. Under this roadmap, the government aims to boost key industries in its economy to usher in an industrial era. It listed five sectors to be prioritised, namely: food and drinks, automotive, textile, chemicals and the electronics industries.
To accelerate improvements in these industries and boost economic growth in the long term, the government is banking on the adoption of digital technology. As earlier reported by OpenGov Asia, the Ministry of Industry announced that it is optimistic that economic growth will reach 5.5% in 2021, on the back of its strong digital economy programme.
To further spur economic growth, Indonesia is set to continue the implementation of various policies and legislations, including the Job Creation Law and the National Economic Recovery programme. The Indonesian government has also announced that tech giants have been expressing interest to invest in the country amid the impacts of the COVID-19 pandemic. It added that this interest to invest is due to ease in doing business in the country and because of its robust digital economic framework.
Indonesia is anticipating a rosy economic outlook this year on the back of reformed strategies and policies in digitalisation. Minister of Industry Agus Gumiwang Kartasasmita expressed optimism in his recent statement that the country will record economic growth of 5.5% in 2021, thanks to its digital economy development programme and other policy reforms set in place to mitigate the impact of the COVID-19 pandemic.
The Minister added: “With various combinations of policies and opportunities that we take advantage of optimally, it is hoped that the Indonesian economy can grow around or in the 4.5% to 5.5% range in 2021.”
The growth rate projected by the government this year is in line with earlier projections made by economic institutions. Estimates made by the Asian Development Bank for global economic growth was pegged at 5.3% while the International Monetary Fund sees the world economy growing by 5.2%. The World Bank, however, sees that economic growth will be at 4.4%.
The Indonesian government has been at the fore of improving its digital landscape. Aside from infrastructure development, the country’s digital economy is at the priority list of the government in creating a shared economy and in boosting consumption. Several tech startups have been put up and internet connectivity in the country is forecast to drive the internet economy to be worth more than $100 billion by 2025. The growing young middle-class is likewise expected to be more adaptive to technology and entrepreneurship.
In a recent report by OpenGov Asia, the Indonesian government announced that there are now several tech giants that are expressing interest to invest in the economy, due to an improved digital economy framework and business climate in the country. The government has been scaling up efforts to transform its digital economy as it seeks to fast-track economic recovery due to impacts brought by the pandemic.
Aside from building on existing digital transformation initiatives, the Minister stated that to reach its economic target, the government will focus on the continued implementation of the Job Creation Law and the adoption of the National Economic Recovery (NER) programme.
The NER is an economic stimulus programme issued by the government in the first half of 2020. It helps buffer economic setbacks caused by the pandemic through the introduction of tax breaks, capital injection for state-owned enterprises, subsidies for Micro, Small and Medium Enterprises (MSMEs) and financial assistance to households.
To further bolster economic recovery, the Indonesian government will continue to provide assistance to MSMEs. It is also lining up a new array of investments for 2021. The Minister noted: “[T]he government will compile a list of investment priorities and form an investment management institution or LPI.”
The government is likewise banking on other key areas that can leverage economic growth. These include the food security programme, industrial estate development and other labour-centred policies.
The Minister added that the government’s optimism is due to its extensive portfolio of recovery strategies that it has formulated to soften the blow of major economic setbacks. One of these strategies is maintaining an open collaboration with key players in various sectors. He explained: “[S]ynergising with all stakeholders is an absolute must so that national economic growth will revive more quickly in 2021.”
On top of this, the Minister emphasised that the economy has sufficient capital for the implementation of new and existing policies that can further accelerate economic recovery this year.
To explain further, the Minister of Industry said that in the manufacturing sector alone, there was a steady expansion recorded driven by industrial differentiation. This, he said, shows continued optimism in the business sector.
Government agencies in Indonesia are shifting towards the utilisation of the e-commerce platform to be able to streamline operations and cater to a wider citizen base. One of these departments is the Ministry of Trade which strives to boost the competitiveness of public markets by launching a People’s Market Digitalisation programme under a partnership with the private sector.
In a statement, the Ministry described the digital platform as a tool that allows startups and small business owners to compete with bigger, more modern shopping establishments. By being more competitive, these small market players can help drive and sustain economic growth.
The project will be jointly implemented by the Ministry and PT Tokopedia under a memorandum of understanding (MoU) and a Cooperation Agreement signed in Bandung, Java. The signing of the agreement was attended by officials of the Ministry and those of the private firm.
The MoU shall be valid for three years and can be extended upon a new agreement between the parties. It is expected to aid MSMEs in terms of product promotion, information and utilisation of their market accounts. It shall also provide training to community market managers of these small businesses.
Encouraging participation of more market players
The Ministry expressed confidence that this innovative undertaking will further give market traders room for growth. Deputy Minister of Trade Jerry Sambuaga emphasised: “With this synergy, PT Tokopedia will provide promotional space facilities [by] opening people’s market accounts on the platform. This cooperation is expected to help the traditional market traders in increasing their sales online.”
This latest venture of the Ministry is part of a rollout of services to encourage more government agencies in supporting the nation’s digital transformation amid the onset of the COVID-19 pandemic. The Trade Ministry added that making the transition to digitalisation must be prioritised “so that the wheels of the economy keep turning”.
Data released by the Ministry of Communication and Informatics show that product sales through social media and e-commerce platforms reached IDR 446.75 trillion (US$ 31.7 billion) in 2020. This figure shows a significant increase from numbers plotted in 2017. The Ministry explained that this is due to online shopping becoming a viable alternative to physical shopping after the pandemic set in.
The Ministry of Trade also reiterated its call for local government units to continue to step up their game by adopting innovation.
Minister of Law and Human Rights Yasonna H. Laoly echoed this statement. In a separate media release, he said that innovation is key in providing improved public service. To emphasise, the Minister noted that they had introduced a number of innovations to support their operations during the new normal.
He added: “In the field of immigration, the Ministry of Law and Human Rights issued regulations on prohibiting the traffic of foreigners, as well as implementing health protocols for everyone entering and leaving Indonesian territory, extending online residence permits, online visas and Eazy Passport innovations.”
He also said that the Ministry is currently using information technology in handling case trials. In addition, it has launched online registration for intellectual property through the application Virtual Loket or Lokvit. This application was reported to have contributed to an increase in Non-Tax State Revenues or PNBP.
Aside from immigration and law enforcement, the government is also ramping up innovations in other industries. According to a report by OpenGov Asia, the government, in collaboration with a state-owned firm, recently put up 4 additional General Electric Vehicle Charge points. The additional infrastructure is seen to encourage wide adoption of electric vehicles like electric cars and motorbikes by consumers.
This innovation comes on the heels of an announcement by the Indonesian government that it is anticipating to have 2.1 million e-motorcycles and 400,000 e-cars on the roads by 2025.
Several major global tech giants actively exploring investment in Indonesia digital economy and specifically its electric vehicle industry.
Indonesia has been actively trying to attract more foreign companies to set up shop in Indonesia, as part of these companies’ relocation strategies away from traditional locations like China.
A local e-commerce giant has already received significant funding, while another major cloud and web services company has agreed to develop data centres in the country. Further, a stalwart and pioneer of electric vehicles has been personally invited by the nation’s president to establish a plant for electric vehicle manufacturing, as well as to take advantage of Indonesia’s vast deposits of nickel for its lithium batteries.
To make relocation and establishment in Indonesia more attractive, about 4,000 hectares in Central Java province has been allocated in the Batang Industrial Park for interested firms, with a focus on businesses in the pharmaceutical sector.
Indonesia has also taken significant steps to make its investment environment favourable through strong regulatory reform. The Indonesian House of Representative ratified the Jobs Creation Bill (widely known as the “Omnibus Law”) that encompasses amendments to labour laws that have a bone of contention for foreign investors. The Omnibus Law streamlines Indonesia’s notoriously convoluted business licensing regime into four risk categories, and relaxes licensing requirements for businesses in all but the highest category of risk. Seventy-six laws are being amended under the Omnibus Law which is aimed to boost investments and create more jobs in Indonesia. Among others, the Omnibus Law introduces provisions to simplify business licensing procedures and changes to the existing manpower law.
As part of the government’s efforts to promote job creation under the Omnibus Law, a high-level team met with electric vehicle giant executives in early November 2020. As the company showing potential interest in building a plant in Central Java province, Indonesia is confident that it can become an integral part of the global supply chain for the flourishing electric vehicle industry,
In fact, the government aims to make Indonesia the biggest producer of lithium batteries with such global partnerships. The country has the world’s largest reserves of nickel and is also the world’s largest producer of nickel – a key component of lithium-based batteries for EVs.
OpenGov Asia recently reported on the nation’s initiatives to expand its charging station network for electric vehicles and the Mining Industry Indonesia plans to form a venture to make batteries to power electric vehicles.
Another tech giant will invest US$2.85 billion to build three data centres in Indonesia’s West Java between 2021 and 2022. This investment represents the biggest influx in Indonesia’s information and technology sector. With the deployment of these centres and associated web services, the government is hopeful that there will be accelerated digitisation of the country’s SMEs who make up 99% of businesses in the nation.
After a US$350 million injection of funds, an Indonesian e-commerce company is set to expand and capitalise on the wave of online transactions due to the pandemic. With 100 million monthly users and over 9 million Indonesian e-commerce retailers, the platform is available in 98% of districts across the archipelago.
Indonesia’s digital economy is projected to be US$130 billion by 2025 and will contribute massively to the national economy as well as drive the nation’s startup ecosystem. Withing this digital sector, there is a vibrant and flourishing e-commerce sector which is expected to be worth US$83 billion by 2025. To strengthen the sector, the government has released its needed e-commerce law, that establishes the legal guidelines and framework for the industry.
In order to enhance the convenience and experience of electric vehicle users as well as to encourage their wider adoption, PLN added 4 General Electric Vehicle Charges points (Stasiun Pengisian Kendaraan Listrik Umum – (SPKLU). An electric energy charging station (SPKLU) is an infrastructure that facilitates charging of electric vehicles, including electric cars, electric motorbikes and the like.
Perusahaan Listrik Negara (PLN), the Indonesian state-owned company tasked with supplying the electricity needs of the Indonesian people has collaborated with Jasa Marga to add these stations on the Surabaya – Jakarta toll road. With the launch of the 4 new SPKLUs on the Trans Java toll road, it will make it easier for people to travel long distances using electric cars.
“The SPKLU facilities at these 4 points are provided by PLN to provide comfort to electric car users and to accommodate battery charging needs when travelling from Jakarta to Surabaya,” said Director of Commerce and Customer Management of PLN, Bob Saril.
These latest SPKLU additions are part of PLN’s commitment to supporting the implementation of Presidential Decree No. 55 of 2019 concerning the Acceleration of the Battery-Based Electric Motor Vehicle Program for Road Transportation.
Indonesia continues to move towards battery-based electric vehicles and PLN is eager to assists everyone in the nation who is looking to use who use Battery-Based Electric Motorised Vehicles (KBLBB).
On 17 December 2020, the Ministry of Energy and Mineral Resources (ESDM) had a public launching of Battery-Based Electric Motorised Vehicles (KBLBB) as an environmentally friendly future vehicle. This formal launch aims to disseminate programmes of the Central and Regional Government and stakeholders in supporting the implementation of Presidential Regulation.
The programme has ambitious targets, aiming to have around 19,000 4-wheeled vehicles and 750,000 2-wheeled vehicles by 2025 in order to reduce greenhouse gas emissions by 283,000 tons CO2-e.
The KBLBB programme also aims to improve National Energy Security by reducing dependence on imported fuel. The Head of the Communication Bureau, Public Information Services and Cooperation of the Ministry of Energy and Mineral Resources, Agung Pribadi, revealed that Indonesia’s current fuel consumption is around 1.2 million barrels of oil per day (bopd) with most of the fuel needs being fulfilled through imports.
“With the high growth of motorised vehicles, dependence on imported fuels will continue to increase. It is necessary to use local energy sources, especially new renewable energy and gas, which is used for electricity generation as a provider of electricity for KBLBB. The goal is to improve air quality and support the achievement of emission reduction targets. National Greenhouse Gas,” added Agung.
The shorter distances that electric vehicles can travel and the lack of infrastructure for charging electricity have always been the obstacles to using electric vehicles across the country and, therefore, electric cars are only predominantly used in cities. PLN plans to build 2,400 Public Electric Vehicle Charging Stations (SPKLU) by 2025.
Ensuring the provision of charging infrastructure through the construction of Public Electric Vehicle Charging Stations will go a long way in encouraging people to explore the use of electric vehicles. It is imperative to ensure convenience for those who wish to use such environmentally-friendly transportation options.
Earlier in October this year, the Mining Industry Indonesia (MIND ID) revealed that a group of Indonesian state-owned companies will form a venture to make batteries to power electric vehicles. The new venture, called Indonesia Battery Holding, would be formed by state miners MIND ID and Aneka Tambang (ANTAM).
Indonesia, the world’s biggest producer of nickel ore, a key component of EV batteries, wants to build an integrated EV industry that will eventually include building the vehicles.
More enterprise startups in Indonesia are on the receiving end of support from the government as the country continues to move towards a new era of digital innovation.
The latest Micro, Small and Medium Enterprise (MSME) to receive government funding is one of the winners of the agency’s Startup4Industry competition held earlier this year, Gati Wibawaningsih, the Director-General of Small, Medium and Multifarious Industries of the Ministry of Industry, announced in a statement.
The Minister said: “PT DycodeX Teknologi Nusantara is part of the five best Indonesian startups that graduated from [the competition], with a work called HeatraX.”
The HeatraX application is the latest venture of the firm in digital technology. The app was deemed to be another useful technology that can be used in the healthcare industry amid the COVID-19 pandemic.
The HeatraX is an upgraded variant of thermal scanners. One of the application’s primary features is a contactless thermal screening that runs on an on-device artificial intelligence or AI. It also comes equipped with face recognition and a real-time warning feature that measures a person’s temperature.
What sets HeatraX apart from other health and safety monitoring apps in the market today is its capacity for data sharing and integration. PT DycodeX explained: “HeatraX not just a device, but a platform that is enriched with a web-based dashboard and mobile app, and allows the system to integrate with third parties.”
In terms of market potential, the Ministry added that it sees big potential in the HeatraX application as most establishments need to invest in thermal scanning equipment as part of strict safety and health protocols.
However, the Ministry’s Director General was quick to add that HeatraX does not merely serve its purpose in thermal scanning. In the long run, the agency anticipates that the platform can be used in data analytics with the capability to track, trace and be customised based on AI.
A digital future in Indonesia
The Ministry renewed calls on startups and other enterprises to contribute to growth in the industrial sector and the country’s overall economic stability. Companies can likewise contribute to healthcare as the government looks forward to an integrated and automated smart screening system that can prevent the spread of the COVID-19 virus.
The Ministry likewise said that it sees the MSME industry as a viable market. Through a series of activities, it explained that it is supporting what it called an “economic rebooting” by sustaining the momentum of MSMEs during the pandemic. This initiative is in line with the provisions of the Job Creation Law.
In a separate statement, Minister of Industry Agus stated that his agency will continue to implement the e-Smart programme. The system, up and running since 2017, encourages a collaboration between the government and the private sector to support small enterprises in the industrial sector.
There are currently 516 MSME players in the market that have been included in the e-Smart catalogue. The Minister also said: “In 2020, a total of 3,958 IKM registered for the e-Smart IKM programme and 2,014 of them successfully passed the curation and have attended the training.”
The Indonesian government has been ramping up its adoption of innovative technology to scale up its operations and existing organisational frameworks. According to an earlier report by OpenGov Asia, the government announced that supporting MSMEs sits on top of its priority list as it plans to hit its goals under the Making Indonesia 4.0 roadmap. Under this blueprint, the government shall undertake to improve several areas in its economy, including the manufacturing sector. To do this, government departments strive to create a healthy ecosystem where key players, including startups, can thrive and contribute to the nation’s digital transformation.
As the government continues to make strides in the adoption of new technology in the healthcare and manufacturing sectors, the agriculture industry remains a thriving growth area for digitalisation.
As the year comes to a close, Minister of Agriculture Syahrul Yasin Limpo expressed confidence that the overall 2021 outlook will be bright for the farming industry on the back of steady adoption and integration of digital technology in the whole agriculture ecosystem.
To further support the growth in technology, he urged all offices under the Ministry to continue to sport the same innovative mindset in the coming year. He also emphasised the need to scale up the implementation of modern agricultural methods across all areas. He added that technology in agriculture has significantly improved existing procedures. This turnaround increased agricultural productivity. The introduction of tech into an otherwise traditional sector of the economy has been a driving force to hit production targets.
Aside from adopting modern technology, the Minister also noted that there is power in research. He said that to continue to improve, players in the agriculture sector must “use the results of research and development to boost improvements”. He also said that “the milestones and glorious achievements of 2020” will be the Ministry’s starting point next year.
According to a report, the spending that Indonesia will allow for research and development funding will have a significant impact on its growth trajectory. To spur economic growth that would allow it to have more value added on products and services, the government must focus on being innovative. Hence, it is a necessity for agencies to continuously adopt and build on projects that will accelerate their digital transformation.
Sustaining performance and hitting targets
In the same statement, Secretary General of the Ministry of Agriculture Momon Rusmono stated that the Ministry has hit its objectives this year by increasing its production, implementing low costs and expanding agricultural projects.
These goals include increasing improving access to quality food and enhancing the added value of employment. The Secretary General also noted that ramping up investments in the real estate sector and improving industrialisation is also one of the targets of the Ministry this year.
For its 2021 outlook, the Ministry said that it is banking on its achievements this year as an essential stepping point for the coming year. It said it undertakes to foster economic resilience and recovery amid the effects of the COVID-19 pandemic.
According to a separate speech delivered during the National Conference of Indonesia Agricultural Scholars Association, the Minister of Agriculture encouraged organisations, members of the academe and other stakeholders in the industry to contribute to food sustainability.
He likewise expressed gratitude for the commitment among members of the private and public sectors in order to hurdle challenges in agriculture. The Minister said: “The ministry cannot move alone, and we must jointly face challenges from time to time in accordance with the development and progress of the existing era. I hope this National Conference will become a consolidation for all of us.”
The agricultural sector has been at the fore of integrating digital innovation into its existing and new ventures. In an earlier report by OpenGov Asia, the Agriculture Minister noted that several smart projects have been put up in an attempt to avoid food crises and mitigate dependence on food imports.
Among these programmes is a technology that aims to enhance food estate development processes in farming growth centres in the country. Such food estate ventures form part of the government’s National Strategic Programmes slated until 2024. This plan covers developments in irrigated as well as in non-irrigated areas and several supporting infrastructure like the construction of new roads.
