The digital industry in Indonesia' manufacturing sector has a potential to increase sharply and provide added-value to the national gross domestic product of US$150 billion by 2025 - Photo by Industry ministry office

JAKARTA (TheInsiderStories) – The digital industry in Indonesia’ manufacturing sector has a potential to increase sharply and provide added-value to the national gross domestic product (GDP) of US$150 billion by 2025, said industry minister today (04/15). Moreover, the development of this technology-based industry could contributer to economic growth by around 1-2 percent.

According to the Minister of Industry Airlangga Hartarto, the government continues to make efforts to make Indonesia enter the ranks of the top 10 countries with the strongest economy in the world by 2030 and enter 4th place in 2045.

The Chairperson of the Golongan Karya Party said the government was carrying out strategic steps to support the acceleration of industry adoption 4.0 in the manufacturing sector.

First, the launch of Indonesia Industry 4.0 Readiness Index (INDI 4.0). The initial phase of the INDI 4.0 assessment was attended by 326 industrial companies from the food and beverage, textile, chemical, automotive, electronics, metal, multifarious, and engineering, procurement, and construction (EPC) sectors.

The next step is to make Indonesia an official country partner at Hannover Messe 2020 which is the largest industrial technology exhibition in the world.

Another effort is to generate opportunities for startup companies that aim to explore innovative ideas from technology-based startup companies.

“We expect startups in the country to increasingly recognize the importance of digital infrastructure that characterizes the application of Industry 4.0 such as cloud computing to support its business,” said Hartarto at the opening of the 2019 Indonesia Industrial Summit (IIS) in Tangerang, West Java, on Monday (04/15).

In line with these efforts, the government continues to encourage the deepening of domestic industrial structures through increased investment, which also aims to substitute imported products.

In addition, Hartarto explained, the digital industry also demands readiness of human resources in mastering technology. This era will provide new employment opportunities in Indonesia of up to 18 million people, with 4.5 new workers absorbed by the industrial sector and another 12.5 million by the industrial support services sector.

“The development of industrial human resources is a form of the Government’s commitment in preparing HR in facing the era of industry 4.0,” he said.

The Ministry of Industry noted that the contribution of the Indonesian manufacturing industry as a pillar of the economy was still considered quite large. This can be seen through sector growth, increased investment, additional employment and foreign exchange earnings from exports.

The manufacturing industry’s contribution to the national Gross Domestic Product is at 20 percent. This condition makes Indonesia ranked 5th among G-20 countries, after China (29.3 percent), South Korea (27.6 percent), Japan (21 percent) and Germany (20.7 percent).

Investment in the manufacturing industry in 2014 amounted to Rp195.74 trillion, up to Rp226.18 trillion in 2018.

This gives a chain effect to the growth of both large and medium and small scale industrial sectors. In the 2014-2017 period, there was an increase in the population of large and medium industries, from 2014 as many as 25,094 business units to 30,992 business units, which grew 5,898 business units.

In the small industry sector, it also experienced an increase, from 2014 as many as 3.52 million business units to 4.49 million business units in 2017. This means that it grew to 970 thousand small industries during the four years.

In addition, the manufacturing industry consistently provides the largest contribution to the national export value of up to 73 percent.

Written by Daniel Deha, Email: daniel@theinsiderstories.com

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