Titled “Making Indonesia 4.0”, the roadmap focuses on five manufacturing industries, namely food and beverages, textiles, automotives, electronics and chemicals.

President Joko “Jokowi” Widodo himself would officially launch the new industrial development roadmap, said Industry Minister Airlangga Hartarto.

“This is one of the policies that will be launched at the Industrial Summit on April 4,” he said during a recent discussion.

Airlangga said his ministry had started the initiative through a “link-and-match program” that involved the country’s vocational high schools and industries.

Under the program, educational institutions cooperate with industries to provide students with work experience based on subjects they focus on at their educational institutions.

To create reliable broadband infrastructure and increase internet connectivity, which is a prerequisite to adopting the technology-based approach, the government is currently building a nationwide fiber-optic network, the Palapa Ring.

“The government is also working on fiscal incentive packages, especially tax deduction for R&D [research and development] and research of industries as well as tax holidays,” Airlangga said.

The head of the ministry’s industrial research and development agency (BPPI), Ngakan Timur Antara, said his side had proposed tax breaks for companies building vocational training and R&D centers. He added that it had also requested tax holidays for the oil and gas as well as for coal and chemical industries, apart from simplified business permit application procedures to lure investors, as these sectors would support the establishment of Industry 4.0 in Indonesia.

The Finance Ministry is currently revising a Finance Ministry decree on tax holidays and government regulations on tax allowances, income tax for small and medium enterprises as well as tax deduction, which it expects to announce by the end of March.

In the ASEAN region, Thailand has introduced an economic model called Thailand 4.0 to promote innovative and value-based industry as the main engine of economic growth.

Industry associations said some industries had actually begun to implement Industry 4.0 elements in their internal operations, although the government had yet to begin the program.

Indonesian Textile Association (API) chairman Ade Sudrajat said a number of garment factories had begun to use automation in some of their activities to reduce dependency on manual labor. The textile and garment industries are traditionally labor-intensive industries.

Indonesian Food and Beverage Producers Association (Gapmmi) chairman Adhi S Lukman said major food producers were the most prepared companies to ride the Industry 4.0 wave.

“Machines can be designed to customize production,” Adhi said, adding that the online marketplace could become an important marketing channel for food and beverage producers in the next industrial revolution.

Indonesian Automotive Manufacturers Association (Gaikindo) secretary-general Kukuh Kumara acknowledged that automation and the internet of things had been widely applied by major companies in industrialized countries and that this was also the case in the automotive industry. The world’s main automotive producers, for instance, had mostly utilized automatization to improve efficiency, productivity and quality, he added.

Kukuh did not elaborate on whether the local automotive industry would follow in the footsteps of its foreign peers. (ami)

Popular

RI, Australia strengthen partnership on taxing crypto assets

Analysis: Indonesia denies normalization with Israel to enter OECD

Citroen to produce electric cars in Indonesia