October 21, 2020

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Indonesia’s Ministry of Industry Launches Startup4industry 2020

The Ministry of Industry has launched the Startup4industry programme as another concrete step to implementing the Making Indonesia 4.0 roadmap. The nation is confident that this strategic initiative will bridge the needs of industry and the community with the role of startups as technology providers.

“Cooperation with startup players is expected to provide benefits to priority industrial sectors contained in the roadmap for Making Indonesia 4.0. To be able to excel in competition, innovation and technology are important investments that can be presented by the industry, one of which is the role of startups,” said Minister of Industry Agus Gumiwang Kartasasmita at the Startup4industry 2020 launch event.

Since the launch of Making Indonesia 4.0 by President Joko Widodo in 2018, the roadmap has guided efforts to revitalise the industrial sector using digital technology. The main objective is to increase productivity and quality more efficiently to compete in the global arena.

The overarching theme of Startup4industry 2020 is “Indonesia Is Confident in Domestic Technology”. Utilising modern technology, the initiative has two main aims: positive social impact on citizens and mitigating the impact of the pandemic in the industrial sector. The Minister of Industry said they have identified seven sectors that would be pioneers in the implementation of industry 4.0 in the country. These sectors are food and beverages, textiles and clothing, automotive, chemical, electronics, pharmaceuticals and medical devices.

The Ministry of Industry is determined not only to encourage efforts to substitute imports but also to use technology. This is expected to accelerate the national economic recovery from the COVID-19 pandemic. As an important first step, the government has set a target for an import substitution program of 35% by 2022.

Furthermore, the new normal requires social restrictions, remote and dispersed working, a transition to faceless transactions and increased online activity overall –  essentially all parts of the nation – life, work, economy – will rely heavily on technology.

As such, the industry is expected to exploit the new market potential that will emerge from the impact of the pandemic. This is in line with digital transformation efforts, where the need for technological innovation in society and industry will increase.

Indonesia has emerged as a potential market for digital technology development built on good coordination between the government, the private sector and the academic community. According to the 2020 Global Startup Ecosystem Report (GSER), Indonesia is ranked second in the Top 100 Emerging Ecosystem – a firm indication that the startup ecosystem in Indonesia has been well established. This means that Indonesia is one of the countries that investors are interested in investing in the startup sector.

The startup industry is dominated by players in the early stages primarily Medium and Small Enterprises (MSEs). This is in line with the Job Creation Law which has been designed to provide convenience for business actors with a scale of UMKM.

In line with Making Indonesia 4.0, the Ministry of Industry has carried out various strategies to encourage the application of 4.0 technology in the country, including pilot projects for the implementation of industry 4.0, training for industry 4.0 transformation managers, socialisation and seminars on industry 4.0, assessment and assistance for INDI 4.0 (Indonesia Industry 4.0 Readiness Index), e-Smart IKM, and the Startup4industry program.

Director-General of Small, Medium and Miscellaneous Industry (IKMA) Gati Wibawaningsih explained that the Startup4Industry 2020 programme has a series of activities that will last until December 2020 including a problem-solving competition using industrial technology 4.0 to handle the impact of COVID-19.

The implementation of the Startup4industry program in 2018 and 2019 had several achievements, including 220 startup players, 15 implementation projects in the IKM sector and as many as 26 IKM using technology solutions from the startups.

Furthermore,  a finalist of 2018 Startup4industry competition went on to win the 2020 Hermes Startup Award, an international competition that was first organised by Deutsche Messe, organiser of the Hannover Messe.